Dutch Bros. Coffee: Travis Boersma

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You know, we talk a lot about hustle on how I built this. And recently I spoke to Jason Sudegis, who shared some amazing stories about starting out in comedy. He put in a lot of reps. He played small houses in Vegas, he played in Amsterdam night after night for years. But during that grind, he got an idea for a character who would go on to become one of the greatest leading men on TV. Ted Lasso. Check out my conversation with Jason Sudekis on my other podcast. It's called The Great Creators.

Just search for the great creators with Guy Raz wherever you listen to podcasts or go to thegreatcreators dot com. And now On to today's show. We opened our first day downtown Grands Pass next to the post office and Dane was like

I don't know if I could do it, man. He's kinda hiding out in the back and What do you mean he couldn't do it? Why? He he just I think uh all of a sudden it just kinda all like Oh my god, this is real, we're doing it. Yeah. And

I'm like, hang on, dude. I'm gonna go make you a... A little eight ounce mocha. Yeah. And I'm gonna put some tunes on. Yeah. And so I put on some Led Zeppelin going to California. Mm-hmm.

And I got him a coffee. I said hey man. It's on. Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements.

they built. I'm Guy Roz and on the show today, how two brothers sold espresso drinks out of a push cart in Grants Pass, Oregon. built Dutch Bros into a billion dollar business with over 700 stores. I'm sure you found yourself in a situation like this. It's late at night.

year with a close friend. And you start talking about all the things you could do together. And you ask. What if we try that one thing and Just go for it.

And sometimes that conversation can power you to do Great things together. Travis Borsma had that special connection with his older brother Dane. They would often talk about all sorts of crazy business ideas. But the one that really worked started out as an espresso car in a grocery store parking lot.

Okay. They called it Dutch Brothers, or rather Dutch Bros, but And today that former coffee cart is a billion dollar beverage business with more than seven hundred locations across the United States. To get there was a wild ride, often joyful, but also at times

Painful. And even tragic. And what is now a hugely popular brand started in the small town of Grants Pass in Oregon. Travis grew up in the 70s on his family's dairy farm in Grand's Pass. And he spent a lot of time with his brother Dane, even though Dane was seventeen years older than Travis.

Yeah, he so you know, I mean I remember being two, three, four years old and going on dates with Dane. Go go tagging along on his dates. Yeah, yeah. And he was he was like a second father, but But he treated me like a brother and uh we had such a a great relationship

We were really family oriented being on a on a dairy farm and And growing up in a in a small community it was a really cool way of life. So you grew up basically working on the farm. Yeah, I did. You know, and I mean

Have a motorcycle to rip around on and a dog to chase you around and Hard cattle and and go uh into the creek and version.

And All sorts of stuff, and back then we had hop yards next to us. And uh that was an incredible playground for me. And hop yards like grew growing hops. Yeah. Which was fed to the cattle.

No. The two the beer drinkers. Okay. So so did you I mean that's a tough It's a tough business. Even harder arguably today because fewer people are drinking milk than ever in the United States. Um And so your dad he had this dairy farm. What did that mean for

For money. I mean was money tight or did you not really have a sense of that or was You know was it? He did okay with with the dairy. Well you know, I think uh

It is a tough way of life and And you learn a lot about work ethic and You know, we were third generation dairy farmers as far as Dan and I go, and my dad was second generation and quite honestly I I think my dad had a desire and ended up opening uh an R V business in the eighties because he

He always wanted to do something different than the grind. Hm. All right. So you you grew up and you go to college of eventually you wind up at Southern Oregon University. And meanwhile Dane, who's is way older than you. I mean he's he's already married and and raising a family.

And I think both of you were pretty entrepreneurial, right? Like you you would talk a lot about business ideas. Yeah. I would have a lot of dialogue with my brother while he was milking cows. I'd go down, hang out, we'd talk about life. Yeah. possibilities and

And he would cast a vision with the dairy farm that was incredible. He was like, Man, if we had like purebred Holsteins and And we fed him really well and we had And we're really mindful of He wanted to turn it into like a like a high end like organic dairy or something like that.

Yeah, and it was organic before organic was organic. Yeah. And so we could dream about that and have some fun with it. And then we could go down different paths of like well Maybe we should think about opening like baseball batting cages or Like you know

We would talk about business. A lot. Yeah. And I think one thing that's noteworthy is Dane had a Dairy Queen franchise at the age of twenty two. Wow, he he bought a franchise? Yeah.

And at that time I think Derry Queen It was still in its younger years. I mean they had It was before the blizzard. Yep. And so uh he was doing well with it and and having a ton of fun and making a lot of money and

He ended up selling it and taking a sixty thousand dollar profit. And I think he reinvested that money in cows. on the dairy farm and and began to take the lead role and run the farm. Wow.

The R V business. So There's something that happened on the farm in the in the early nineties. I guess it started to struggle a bit. And You guys had to let

Go a lot of the people who worked on the farm, um, because you couldn't afford to pay What was what was going on? Why why did the farm run into trouble? Well You know as we had this creek running through the property, there were some environmental regulations with the DQ.

And they give us a certain time line to become compliant with it. Yeah. If you didn't adhere to that timeline you'd have a fine monthly that you'd have to pay and And we couldn't afford that and we got to the place. We had very little confidence in our ability to do that, so we made the decision that we needed to sell the cows.

And my dad was well off. My mom was well off, but You know, this was Dane's way of life more so than anything else, and he had three kids at the time. Hm. Alright, so it sounds like uh in the early nineties this was the beginning of the end of tr kind of transitioning

out of the dairy business. So as Dan assessed his situation He was kinda like, Wow man. I need to go get a job.

And maybe I need to go to Walmart or I need to go to Fred Meyer. Get a job and And I was like Hold up, dude. Time out.

We've talked about it. All these different business ideas. You and I have gambled on football games, we've taken risk, we do all this crazy stuff at the horse races. Like Why don't we pursue one of the business ventures that we've talked about?

Mm. And he's like, What are you thinking? And I said yeah. When I was over at sock. I was, you know, sometimes uh A late night with too much beer or too many

parties and need a little pick me up in the morning and a hangover recovery. I was drinking espresso and mocha's and lattes and And I said you know, I think We could maybe delve into something like an espresso. business and Can you guys I don't?

I don't even know what espresso is. Yeah. You know and I said we'll. Dude, you gotta you gotta check it out. And we kinda left the conversation and And he went.

called the Bistro is an Italian restaurant here in Grands Pass. And they had espresso on the menu, so we ordered it after dinner and they brought it out in a little short demitassi cup with a Lyric crema on it. Yeah and he took a nip off it and he was like Holy this is so bitter and strong and it tastes terrible like nobody would buy that.

Yeah. And I said, Okay, hold up. Get in the car. I'm taking you down to this little place that I've been frequenting and I'm gonna get you a vanilla latte. So we head down. uh this little drive thru here in Grants Pass, believe it or not, at that time in nineteen ninety

And it was called Western Expresso with an X. Express. Yeah. And this little lady named Bonnie worked there and she was probably the coolest. Most friendly in Grant's past. She was kinda oaky barefoot.

Kind of a hippie lady. And I pulled up, she goes, Hey Trav, how are you? So I'm great. Yeah, actually I need two vanilla lattes today. I got my brother Dan with him. Oh hey Dan, you know And it was a single head little electra machine, so And it was organic Peruvian coffee, which was like, I didn't even know that that was, but it sounded cool and And so I hand it over to Dane and I start to pull away and I look over and Dane has taken lid off.

Of the cup. And he's licking the milk foam and he's like, This is unbelievable, man. You were like roughly twenty one, he was about thirty eight. around this time and You have this idea'cause you'd seen

Espresso carts. Like you saw them in Portland, right? Yeah. Yeah, I remember being a kid and and being up there in Pioneer Square And seeing this cart with these colorful bottles and

Steam rising up in the air and And I remember saying to my mom, Hey We should go over there and check the and he says, She'd be like that's coffee, it'll stunt your growth, don't worry about it. I'm like, Okay. And then being at school. You know, that's where I I really started to

consume coffee for the first time in my life. So I mean coffee culture in America, this is still like some of the f so called first wave, right? It's like before The sort of Starbucks. kind of revolution happens. But you are starting to drink some of these drinks and you like them.

And you thought Hey, why don't we do it? a coffee cart, like make espresso drinks from a cart. And you pitch this to your brother. After you get him to try vanilla latte.

And he says what? Well, he's kinda like, Well, this is really good. This is kind of a mind blow. He goes, What W how do we find more out about it? And I said, Well, I remember up in Valley River Mall in Eugene They used to have a cart. at Nordstrom's and Nordstroms would serve up these coffee in the mall. And I said

I don't know what they ever did with the car, but You know, maybe I should give him a call and and see if I can chase it down and And so I ended up making a phone call and They said, Oh yeah, you know, we still have that car, believe it or not. It's in storage. And uh

I asked them if they had it. And they said. You know, yeah, we do. And and if you want to come take a look at it, you're more than welcome. Wow. You know I had a I had

You know, friends that were going up. to school in Eugene and they're in a fraternity, so I it gave me a great reason to go up and party and Go check this this card out. I was excited about it. I got there. And they pulled it out of storage and it it was just dilapidated beat to hell and

And they said they wanted five thousand dollars for it and I wouldn't have given'em five hundred for it. Okay. So Uh so you knew that you wanna b get in a a espresso cart. This was not gonna be the one. So did you go did w what did you do next? So I came home.

Told Dan, I said, look, man. That's not it. We gotta figure out a new path. And he goes, You know what? One of the guys that I graduated high school with Works up at Boyd's Coffee up in Portland. And his name was Larry Winkler. Mm-hmm and Larry

told Danny, he goes, We sell espresso machines, we sell carts, we've We've got packages and and we wholesale coffee to And And we provide coffee to different people who Have push carts, believe it or not, and

He goes, you know, you guys should come up, check it out. So we did. We made a trip. Yeah. We decided to to not just go to boids, but to hit Any coffee establishment that we could.

through the I five corridor all the way up to Seattle and back. So you you would just basically g you've located Roasters. along the IFI corridor, which is obviously the main sort of north south highway that connects Canada to to Mexico.

And you what, you got off the freeway and we just stop and pop in and and just ask like how they do it. Yeah, and and think about this, man. We didn't have Google Maps or anything like that. We had Maps. Yeah. I mean we didn't we didn't have cell phones. We had to go like to a payphone. Yeah. And so there was three different places in Eugene that we went to. One was the Coffee Corner and the Fifth Street Public Market.

And we had a great experience there and so You know, then we we made the trek up to Boyd's and we sat down. with Larry and he introduced us to a guy named Gary Jacobs and And Gary came over and he said, Well, this is be perfect for you and he shows us they have this fancy showroom floor and And they have this little tiny car with like an ice chest.

And an umbrella and a single head espresso machine and And j'm just curious, b so Boyd's not only roasted coffee, But they also sold coffee carts? Yeah. That's just we that's unbelievable. That was their business? Well, they were you know, they were selling coffee carts because There was a lot of people at that time.

doing these carts and putting them in like Fred Meyer or the Pacific Northwest. Yeah, we're going to different fairs or different events and festivals and serving coffee. Wow. It was In its infancy and boys

was ahead of the game. It just m blows my mind that you could like go to go there and like Yeah, here's Here's a model uh the X five hundred. It's the it's the state of the art coffee cart. Or you may wanna do the uh X seven fifty. Like it's amazing to me that there was a company that had off the shelf coffee carts that you could buy. Yeah, and and But

That experience was a turn off for us at that stage. We we felt like we were being sold like here's Here's your bundle and this is what you should do. And And we were looking for something A little bit higher end, a little bit Better equipped.

And we really anticipated doing We wanted to be able to handle volume. What did that mean? You needed like multiple espresso like You need to be able to make like three espresso at the same time. I mean, I knew that we needed to be able to do

Two at the same time rather than one. because of the time that it would take and for customers if you had Five people that came up. And wanted to get a beverage apiece, then the timing would double.

If you only had one. Yeah. What what was the idea? Where were we gonna put the cart? Did you have like a vision like, oh, we'll just put it here and then we'll haul it. On a trailer.

Here. Or was it like it'll be in a permanent spot. Like what was the idea you guys had in mind? You know, the idea that we had in mind to begin with was Let's put it at Fred Meyer. We knew that in the Portland market there had been carts placed at Fred Myers and they were doing well.

Inside the store or outside. Alright, let me ask you a dumb question, because we're still couple months before you're gonna actually do this. I can make an espresso now because they're commercially available machines are affordable, I know how to do it. But in 1992, This was a different proposition. Espresso machine was like hugely expensive, learning how to pull an espr proper espresso, like You didn't know how to do any of that.

Was that a barrier in any way? Was was this gonna be a a problem? That was part of our our thing. Like how are we gonna learn how to do this? I mean, what do we And what we knew was is that We weren't gonna open unless we had it dialed. Yeah.

And so when we talk to these roaster wholesalers, That would be part of our questions, like How can you help us to learn what we need to do here and We ended up Finding a place called Niswanger and we thought that that was the one they had a la Pavoni espresso machine.

Mm. They had these fancy carts that were better than what Boyd sold. Yeah. And We could buy a package from them for like$15,000 and we were like, Alright, I think we got it. Yeah.

It felt like we were buying a new car off a lot. And we didn't feel like we had somebody that could help us. And teach us. Mm. And so we made the trip back down the i and

The common bond that Dane and I had that was so cool is music. You know, so We're rocking Beatles, Led Zeppelin, Jimmy. C C R I mean Cat Stevens, Chicago, the list went on and on and Yeah.

Oh man. Yeah. You know, and and I listened to the music with Dan from Great great music. I mean I'm I'm just imagining you on the road. Well I left my happy home to see what I could find out. You guys are driving down the I five. Right. Yeah. Yeah, right? Okay. I'm with you, I'm in the car with you. Okay. Yeah.

You know, I mean at this stage we're like we're asking ourselves, how are we gonna make this work? What do we need? How do we you know, and while we're kinda cruising, I mean we're high As hell on coffee. We've had more caffeine than you could ever imagine it did. We're on our way back down. I said, You know what, let's pop back into that Fifth Street public marketplace. That we liked. That was so cool. It had the good vibes, man. Okay. We didn't go see the roasting plant or

Or talk to the guy who owns it. Let's see if we can connect with him. And so on our way down we called We found out where it was. It was right across the street. It was called the coffee corner. Okay.

Yeah, and they have All these locations and all these varietals. And from what we can see it looks like they're Like crushing it and they got They've got like this great energy that's real hospitable about'em.

Yeah. But the magic For us. was meeting Paul Leighton. Who was the owner and he was the roaster.

And when we went in to the little roasting area that they had and it was small. I wanna say it was fifteen hundred square feet. But he had burlap sacks of green coffee everywhere throughout it. And it was like a mad scientist lab.

And that was the was that the first time you saw green coffee beans? Yeah. So cool. Yeah. Yeah. And this guy's like Hey, come on in.

Let me get you a cup. I knew you were coming, so I I brewed some Kenya double A. And this is a really spicy kind of coffee that's got a nuttiness to it and And Dana are looking at each other like What the hell did we just walk into here, man? Because you know, Cat Stevens was cool, but this guy's like, he's got this big beard, he's wearing Birken stocks. So he goes, This is the thing, man. I can help you out with everything you need and I can teach you how to.

pull shots and steam milk and make a cappuccino and This is a passion of mine and I care deeply about the qual I'm I'm pursuing the perfect cup. And I'm like, what the I d I didn't even know to the extent what all these varietals were. It reminded me of like

Wine and all the different areas where you grow these you know different Well I mean I I was like This is just a unique wild. Endeavor that has more depth than I could have ever imagined. Mm.

So his idea so the idea was he would teach you how to do this, but of course with the hope that you would buy his coffee. That was the idea. Yeah, yeah. And does he also have things to sell you? Coffee cart equipment? He had it all. In fact, he asked us a bunch of questions. He was like, so Give me a real idea of what you want to do here.

Yeah. And so Dan and I were like, Well, you know, we wanna do this. mobile push card. And we do have a fixed location that we want to do at Fred Meyer. And he was like, okay, yeah, I in order to do that, he goes, you should do like a manual pull machine. Because there's some art to pulling shots manually rather than like a push button. You wanna you wanna be able to show people and talk to people about what you're doing and

And how that's important to you and Yeah. Alright, so you So he basically says, I've got everything you need. How much I mean, your brother was He was in his late thirties at that point and had already run a Dairy Queen, so he's coming to the table with some

you know, some experience and you were a young guy, but How much money did you guys have to invest in? c you know, uh machine was gonna cost money, the the cart was gonna cost money What did you guys have to put into this? Oh man. I so I had very little and and Dane had, you know

Dane was frugal, man. I mean I think he had maybe sixty thousand dollars, but our first car all in. Was twelve grand. All right. And you made an agreement with Paul that you would buy beans from him? Well so we when we left

From that experience with Paul. We were ecstatic. We were like we found our guy. This is it, man. We're over the moon. And when we got back to Grants Pass, it was like Within a week.

He was down with the equipment. The cart was being built. And We set it up on a an old living room table. And we're in our old milk house.

And You know, we brought our stereo in with a Couch and And he brought with him Ten.

ten pound bags. And he said, You know what? I think the best thing for you guys to do is once I teach you how to pull these shots. And steam milk. It's just have fun with it and try to come up with what you think would be best. Mm.

I mean it was back to let's Let's throw some Some music on and let's I remember making A hazelnut latte and

Sipping that thing, man, and going. Dude. This is unbelievable, man. Well now let's try it with a Mocha Java bean and let's try it with a Colombian bean and What about that blend that he had that was dark and what about that French roast stuff, man? That's Yeah.

And between the time that you took delivery of this push cart, And the time that you actually set up and started to sell copy ha ha do you remember how long that took? I wanna say it took us about uh Three months. Mm-hmm. Before we finally were open.

And There's there's a little story to tell there. Okay. So we kinda got to this place where we had made our simple menu. The mocha, we both knew was gonna be our top seller and the thing that was most popular because there was gonna be a learning curve, especially in Grants Fast, for people that had never had an espresso coffee before, never had a latte before. So

We tried all sorts of different stuff like Mrs. Richards Hot Fudge to Nestle's Quick to Hershey's Syrup to Giardelli's and We were just pulling our hair out because you'd have challenges with either powdery or syrupy and settlement and it just wasn't meeting our expectation. And so Dan finally looked at me and he goes, I'm gonna go down the street. To Valorde Dairy. Ah, who the Zotola family had been doing this for years.

And they had a chocolate milk that was so rich and creamy. A couple of quarts of that and bring it back and let's steam it up and see how how it holds up. And he did? And we both looked at each other and we're like That's it, man. Wow. Steaming the chocolate milk and putting in a steamer, yeah. It was already blended, it already held true.

And when we steam it was faster, it was it was more consistent. It was amazing. Huh. So We got our menu dialed. We had our logo, we had our name. And your name you came up with a name. We came up with the name Dutch Bros because we're brothers and we're Dutch. Dutch bros. You're like third generation, like your great grandparents came from the old grandparents came from the old country. Yeah. Okay. And you can say Dutch Bros, you don't say Dutch brothers.

I say Dutch bros, yeah. Like um What's that coffee brand? It was like an old coffee browser like Hills Brothers. Hills Brothers, yeah. Yeah, they I think everybody else went brothers and we were like, you know what? Fuck tradition, we're going bros.

You guys are bros. Yeah. So all right, so when you are ready to actually put this out there and start selling coffee, where did you where did you go? Where was it? Where did you put it?

So We drew up this nice proposal and had visited with the Fred Meyer store manager and we s sent it in and and they said, Yeah, you know, we got your application and it looks great. But we haven't got to it yet. You know, hang in there and we'll get back to you.

Huh. And Another week passes. And uh Dane says, You know, he says I wonder if We shouldn't maybe

look for a second location. Maybe maybe there's a better location for us to go to. Yeah. And then all of a sudden there was like this flash and I was like there used to be a shaved ice place. Right next to the post office, next to the railroad tracks. Downtown Grants Pass.

Mm. Was there foot traffic there? I mean w was there A lot of people who would pass by. So It's a main thoroughfare that

goes to the coast, so you have a ton of cars that drive by and then you have a lot of people The park. And walk over the post office to get their mail. Right.

Got it. And uh Dane said we'll Bill Rosnick, one of my buddies is the manager for that whole shopping complex. Let me give him a call. So

We showed him what we'd give to Fred Meyer and And he looked at it and he said I'm completely down. If you guys want to put it here, it's a hundred and fifty bucks a month.

There's power on this Billboard sign there that you can probably use. That's what they used and And uh We got everything ready and So we need a a little storage shed to build to put the card in to leave it there overnight and Yeah,'cause it was outdoors. You were outdoors. Yeah. Outdoors, man.

We opened our first day downtown Grands Pass next to the post office. Mm-hmm. Dane was like I don't know if I could do it, man. He's kinda hiding out in the back and what do you mean he couldn't do it? Why? He he just

I think uh all of a sudden it just can't it just kinda all like Oh my God, this is real. We're doing it. Yeah. And I'm like, hang on, dude. I'm gonna go make you a. A little eight ounce mocha.

Yeah. And I'm gonna put some tunes on. Yeah. And so I put on some Led Zeppelin going to California and I got him a coffee.

I said hey man. It's on. When we come back. in just a moment. Travis and Dane realized that pushcarts

Can only go so far. in the real business. Stay with us.

I'm Guy Raz and you're listening to how I built this. One more thing before we get back to the show, please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And it's totally free. Hey, welcome back to How I Built This. I'm Guy Raz. So it's 1992 and Travis and Dane are officially in business, selling espresso drinks from a push cart outside a shopping center in Grants Pass, Oregon. And the very first day

We ran into A real problem. The owner of the grocery store who is the anchor tenant in the shopping center. Came out. And he basically said

What? And uh Fuck are you doing? In my parking lot. And Dane and I are like

We talked to Bill Ross, he goes I don't care who you talk to. This is my parking lot. I lease this. I want you gone now. Mm-hmm. So one thing led to another man and

I end up heading over to his office. Mm-hmm. And it's Dev.

At least be polite and hear them out. Mm. And I was like oh Okay. And He had put chains up on these entrances.

it would come off a six street to access this parking lot because He wanted to restrict people from going to the post office parking in his lot. So I said well I can help maybe with

informing people that you'd rather not Have them park here and And he said, I I don't care, I want you gone. And his wife said, Well Dave Let me I'm gonna go talk.

to he and his brother for a moment and Yeah, I'll be back. Yeah, I'm I'm just curious why he was so mad. Yeah, I think what the deal was is is he felt like he should have We should have asked him for permission. Yeah.

So his wife She goes luck. You know, we've been under a lot of stress. This market is brand new for us. It's our whole life. We've invested our money into it and we have people that Own grocery outlet.

They're of like the brass and And you know, we've got to answer to them and I said listen. I I get it, and I'm sorry. And if we could be of benefit, we'd be happy to

furnish you guys, your crew, everybody who works for you. We can give you free coffees. All we ask is that You give us an opportunity to stay here for the month. We We paid the rent. And so

The next day she came in and she said, Okay. That's the deal. It's a month. And Then once that month's up.

You're well on your way. Said deal, done deal, we're cool. Very first day. We did sixty five dollars. It's not bad.

And we were slapping high fives, man. I mean We profited, we figured like thirty bucks. Yeah. And And that was more than we were doing on the dairy farm in the darkest days.

Yeah, I mean the beauty of that cart was I mean you knew there was a price you paid for it, and then you could measure how quickly it would take to pay recover the cost of the cart. And then after that everything's gravy. I mean, obviously you've got the expense of g bringing the coffee in, but like

That was the big initial investment. Yeah, I mean we had low overhead and we knew what we had to We started earning customers one at a time and it was word of mouth and And it was us promoting the product and now

Customers. We're starting to walk by and get their mail and they're kinda looking at us like What the hell is that? And so I started to just say hey uh

If you're going to get your mail, I'll make you up a coffee and I'll have it ready when you come back by you can check it out. And they'd be like what? Oh no, I I'm not interested. And I'm like no no, it's okay. I'm just gonna give it to you. And they go get their mail and they come back by and I'd I'd hand'em one and they're like, Oh

Wow, this is That's really good. Hm. Alright, so you're out there running this Coffee push car. outside this grocery store, this um grocery outlet.

And when your one month agreement was up, did the couple who had the store parking lot Uh let you guys stay there. Yeah. So as we're cruising through two, three weeks into the gig There's this SUV that pulls up.

into the parking lot of Grocery Outlet. Guys with suits. Hop out of it. Couple of'em light up a cigarette and start strolling over to the push car. Mm-hmm.

And Dane and I see him coming and I'm like I think that's the brass for Crochet. You know, we're kinda like on pens and needles. Mm-hmm. And so they come over and one of them orders a cappuccino. Which

let me know like, you know, okay, these guys are sophisticated coffee drinkers. And they look over to us and they're like, Wow, this is really good, you know, nice job. They left a five dollar tip and they were on their way over to grocery outlet then to talk to Dave and And Jill.

And they complimented Dave and Jill on us being there. And how that made it. A more welcoming environment for customers too. Come to Grocery Al the'cause Grocery Allah, like for people who don't know it, it's like a like a discount grocery store. Yeah, it is. Yeah. And and it changed the trajectory for us. So that you know, now we're clipping along.

And as long as we stayed in good graces with Grocery Allah, we knew that we were there for as long as we wanted to be there. Yeah. From there. Fred Meyer calls. And they say, Hey man.

You're approved. Huh. And we're like Oh my god. What do we do?

And Dan said wood. Maybe we should do the second location. Maybe we should buy another car. And I said, Yep, let's do it. So you guys

Basically took Whatever cash mostly was his cash, probably. Yep. And bought a second card. From that same guy from Paul and Eugene. Yep, and it was exactly the same. Did that mean you have to hire somebody or did would you man one and he man the other? However.

Fred Meyer wasn't doing nearly the volume. And It never would. No.

Um I I guess one of the things that your brother was into were were books by Tony Robbins, the the life coach. And one of the things he was into is this idea of like unlimited um limitless possibilities, right? Like thinking about what you could possibly

do and I guess the two of you, you and Dane Even in those early days. And then like map out what you wanted the business to be like in a year, five years, ten years.

Tell me what you wrote down. I mean, what did you envision the Dutch Bros being in five years at that point? This is nineteen ninety Three. So w where did you think it was gonna be ninety eight and then in two thousand five? You know. Three and The process was I mean, it was really incredible. I mean it was like

Dane When we sat down on the living room floor of his mobile home And did the school setting workshop. In the process in itself is like I mean I'm writing like

become a helicopter pilot. Build a A home on the river above Savage Rapids Dam. Oh, these are these are like personal goals. These are not goals for the company. It's anything. It's okay. It's personal, it's professional, it's everything. It's Open locations of Dutch Bros within the state of Oregon and the eleven Western United States have locations. Yep. It's have a drive through

It's build a coffee house, it's roast our own coffee. It's just Anything you could ever think of. Yeah. And what did that do for you? I mean there are lots of people write goals down.

But how how was that? I don't know, how is that actually useful in this case. Did it what what does it do for you? Well the crazy thing is Once you write all these goals down.

It's almost like inventory your dreams. And after he did that then we exchanged'em with each other and we read'em. out loud and we laughed because So many of them seem so far fetched. But the amazing thing is it was like

They're in our subconscious. It wasn't like we went and got tattoos of These goals. Wrote them on a mirror to look at every day. But

We started to drive toward'em. So you were basically trying to manifest these things that you you'd written down. In meantime you are you've got these push carts and and I think it like What a a good day would be what, like two hundred bucks? Yeah, so you know

I guess second year in our downtown location's doing, you know between two and three hundred dollars a day and Fred Meyer tips around the uh eighty to a hundred dollar mark every day and And we we opened Three more push cards. And we ended up going to Walmart and Grants Pass, R C C

In Grants Pass and then Walmart and Medford. And we have employees now and Trying to figure out like how do we get those other location to perform like our downtown one. We never really could and we kinda finally landed on the ultimate success formula that we learn in this Tony Robbins book and it was

Know your specific outcome. Take massive action toward it. Ask yourself if the action's working that you're taking and if it's not, change it until it does. And we started to look at the push card. Yeah, and we said, You know what?

I think we need to change it. I think we need to have our own environment. Bonnie who had Western Express. Had moved on and she'd giving it to her kids and they kinda ran it in the ground and they were it was dead and gone.

And we said, You know, that may be the best location for it. Let's pull these Carts out of Walmart's. That environment is not for us. They wanted us to monitor people smoking. They it was just a a weird environment. You couldn't play music. It it just wasn't us. You wanted your own Permanent location.

Yeah. And Bonnie's place was It was basically available. Yeah, she had a little trailer there and they had packed it up and they had Vacated the premises and it sat there for a year and And so

We ended up uh contacting the property owner and We decided that our customers that come downtown A lot of moms and dads with kids. And sometimes it's rainy and sometimes it's not the The best weather conditions, what if we did a drive-thru?

Was it already a drive thru? Bonniehead had a drive through. So Bonnie had a trailer. There.

Okay. When Bonnie left, she took her trailer that had the espresso machine in it with her. So it was just a pad site. Got it. So Dane and I decide to build our own custom trailer outfitted with the coffee equipment in it. Inside.

A unique custom trailer, like a Wells cargo trailer. and put the push card in it and we were able to have it all enclosed and have a drive through where it was you could drive through. And we could serve you from a window. or just an open air space just like any any drive thru would serve anybody But it was a mobile unit.

Got it. So, but like drive through coff I don't think they were drive through Starbucks I mean they were drive through McDonald's and get coffee there, but drive through espresso. Places it was not It was not a thing. No, it wasn't a thing. And I think um, you know, for us

When we figure out that that was gonna be the niche for us. It was a game changer. How did you once you converted this trailer into a you know

A drive through the Espresso bar. How did you I mean, was it just clear right away? It was obvious right away that that was how you were gonna sell coffee in the future?

So When we opened and we had that drive through experience, we also had our old school walk up experience that You could park your car, walk up. Sit on a bench underneath a tent. Have a cup of coffee, warm your hands by a Mr. Heater if you want to talk with us.

But the drive thru line that started to form was incredible. And once we Had the the location open for maybe a couple months, we realized like This is just where it's at. This is our niche.

And It started to exceed volumes of three to four hundred dollars a day. Hm. All right, so you've got this this drive through location. And I guess there was there was like a a customer who

who was going to the location, a guy named Marty McKenna who who loved it and was like, Hey, can I like do a version of this in Medford, which is which is like thirty miles away. And you guys agree to work with them. Tell me how that happened. Yeah, so Marty was coming in, um

And Marty was like man, this is so unbelievable. I would love to take this concept to Medford and and do it. Myself. Would you guys be interested in in sitting down talking about it and Legitimately he said, look I

I'd be willing to give you five hundred dollars a month. To use your name. And I'd sign a business license agreement if you want. If you guys teach me how to make everything, I'll use all the products and buy'em through you and Let's take the plunge and and see what pans out.

And how did it do? He started rocking. Wow. He got to a point, you know, we sent our Dust Bro Easter.

With him because this is what you call baristas, broista. Yeah. And the volume started to uh Really built. So the i the idea of kind of what was sort of a version of franchising really began with this guy just saying, Hey, can I open the location? Like you guys This was not something you were looking to do, but it because he

He sort of approached you about it. it sort of, I guess, triggered some thoughts about well, maybe we can open More locations beyond Grands Pass. Correct. And did he become a partner in a s in a sense? Yeah, I I think uh, you know, it wasn't too long into the gig. Maybe it was six months to a year into the gig.

We all sat down and talked about this idea of partnering up. And growing both Medford and Grants Pass. And we were all in like a third a third a third. Yeah. Yeah.

This seems kind of crazy to do. Like like this guy Marty, who I'm sure is a great guy, but like he barely knew him and He opens his location, then he becomes a partner, a third partner owner. Did that turn out to be a mistake? Or d did that work out well?

You know, when you have partners there's always compromises. Yeah. 'Cause it was you and your brother and your family, and so, you know, that's different. Yeah, it really was. Yeah.

You know, we cared so deeply about The product and how we did it. And so Marty was kind of in a different place. I mean He didn't have the commitment to

the way of living real frugal. Um you know, he wanted to take more money and we wanted to roll the money back into the organization. So there was some challenges in those years and We got to a place where like Okay, we've we've got to grow here. We wanna invest. We wanna go buy a coffee roaster and And we talked to Marty and you know, he didn't have the money to continue with expansion, let alone

grow and and invest into a roasting operation. So We decided well, you know, if we just do the roaster on our own. We can sell coffee to the business that the three of us are partnered in still and And then that created a little bit of a rub.

Hm. I mean, in a nutshell, you and Dane were disagreeing with Marty about some some pretty fundamental things. Uh I mean clearly you guys wanted to to use your revenue to grow the business, and and he didn't. And I guess all that all that got so challenging that you started talking about Ending.

Ending the partnership, right? Yeah. You know, Dane and I looked at each other and we said, You know what? This is a long play and and we're gonna grow and I think we can do it better if

Marty wasn't here and Maybe we should be buying Marty out. So finally we just said, You know what? Let's talk about that real number of what it would take. And he finally threw out

I'd do it for one point two. And had we had a financial advisor at that time, they would have said, No way, don't do it. It's I mean, how many years is that gonna take to get your money back? And But We took the plunge and we gave him he he carried the paper. One point two million at seven percent.

Mm. So you you bought him out. For one point two million, obviously you t could not pay that off right away. And that was I mean, this is nineteen ninety nine. I think at that point you had

Ten total locations. Yeah. and eight of them that you guys owned and then two that were licensed. So You were a small business. I mean I mean your rev I can't imagine what your revenue might have been, maybe five million at most a year. Ten, maybe ten million, I don't know.

Oh man, yeah, it was it wasn't even that. But a million dollars a big amount of money and and and Well let's put it this way, it was a we wrote him a twelve thousand dollar check every month. Wow. And Dan and I were taken home. Just to live on. I think it was like

Three grand. Wow. But You know, we had kinda formed a belief like if you're not growing you're dying. So he's out of the picture in ninety nine.

And what I'm trying to figure out is so now it's back to you and your brother. And you've got These ten locations total. And Now you know you want to expand.

But over the next Four years. You would open Forty more locations, drive through locations. So

Help me understand how you did that. Did you Did you guys finance all these? Was it franchisees? Was it It was the same model, a trailer converted into a into a coffee place. Well so We had these

really cool buildings that Dane designed. And As we continue to grow the demand for wanting to franchise the business was there with friends and family customers that they wanted their own location. They were like, Man, how can I can we get in? Can we take this over to Roseburg? Can we take it to Climate Falls and and so Dane wrote the first franchise agreement.

And I wrote the operations manual. Wow. And you know, franchise owners would take all of their own money invest it into A fully equipped mobile unit. And That didn't require any capital from us.

And we would get a franchise fee. Of say like Thirty grand. And then we get royalties. And they'd buy the beans from us that had a profit margin built into'em.'Cause you were roasting your own beans. We're roasting our own beans and so

That really became a cash cow for us, and it became the lifeblood of the company for our own growth. Our own investments. And paying Marty off. Hm.

All right, two thousand four. You're you've got a lot of growth ahead of you, and it's it's a good place to be. You're Thirty four ish. And this is going to prove to be a really challenging time, actually. It's it's

Challenging as an understatement. This is gonna be a Rough. Did not yet know. But um I guess around that time.

you started to notice that your brother was slurring a speech. Wha w what do you remember? Well, um I remember the first time that It was brought to our attention. We're in this local Mexican restaurant that we love called Tacaria and Grants Pass and

And we were just having lunch and Tane's wife Sandy came in and We were talking and she goes, How much have you had to drink? I think it's just Nothing. And

She is full. Why are you slurring your speech? And I was like, Well that's weird. He is kinda slurring a speech. That was the beginning of something that we had no idea of what to imagine. Meantime.

that same year. There was a fire. At your warehouse. Yeah. I think it's

destroyed everything inside like Your inventory like what What happened? Well,

So a hundred and eight degrees out that day. Mm. And uh I'm over a my sister's house, Carly's house, with

Her husband Brian, who works with us at the stage and Or swimming in their pool and we're literally You know, maybe uh half a mile away from where our headquarters is located and

And my mom comes driving up the driveway. Uh A pace like that look dangerous and she slams the brakes on and jumps out there's a fire, we need to go. And we literally jumped out of the pool and board shorts and

Headed down to the warehouse and And when we got there What I saw was This giant trash dumpster that we had that's

Made out of plastic. Melted against the wall on fire. All of a sudden here came the fire department pulling in and they The one Chief came over to me and he was like Hey, listen, uh

You know, we're gonna do the best we can. Is there anything that we need to know and I said well the number one thing is to save the coffee roaster out of there if that's the only thing that made it out that That'd be the thing that's really important for us. And I said I'd like to go in and I'm not going to be able to Get that stu and he goes, i you cannot go in here. You're not allowed if you do

Your insurance could be voided. Trust me, do not even I know it's tempting, sit here, let us do our job. And I said, Okay, and so I ultimately still had confidence that They're just gonna put the fire out and everything will be cool and And the smoke was so dense and so much in there.

they couldn't get a hold on it and they it just got away from'em and And we literally lost everything including the roasters. Wow. All of it. When we come back in just a moment. Travis and Dane get through the fire.

and then face an even bigger blow. Stay with us, I'm Guy Roz, and you're listening. how I built this. Hey, welcome back to how I built this. So it's two thousand four.

And the beginning of what Travis calls The dark years for Dutch Bros. For starters, something is up with his brother Dane. He's not doing well, and he's slurring his speech.

And around the same time, a fire at the warehouse destroys everything. Including the coffee roasters. I'm just sitting there and I'm I'm like Once I realized that it was gone, gone. I call Paul.

Paul had been. our green bean boker and buyer. I said, Hey man, I don't know what to do here. And so he called me back and he said I talked to David Boyd up at Boyd's and They're willing to

roast coffee and and keep your guys product going. Oh wow so you know. I said that's amazing. Thank you. And literally the next

The next morning. Yeah. I was like We gotta figure out what we're gonna do. And people were coming up that

You may want to consider uh antidepressives at some point because this is gonna be a long road and And these were people that had actually had fires themselves. Listen, man.

All I want to do is get it behind me. And make sure that our stores are not impacted. Well. So um

That's going on. And Eventually. Your brother Dame gets a diagnosis. Well the diagnosis didn't come so easy and with

A L S or Lou Gehrig's it doesn't. And that's of course what what he was diagnosed with, ALS. Yeah, and and you can't diagnose it until you're well into it. What happens is You go through a process to rule out Hm.

You know, a tumor. Parkinson's or something else, yeah. And time. You know, when this fire happened, I was so concerned about him. I thought oh my gosh, he's so stressed out. I kept thinking maybe he's just overwhelmed and

You know, we're growing at a a rate that's, you know, maybe Excessive and And so I just I mean My heart hurt for him because I knew something was wrong. I just didn't know to what extent. And it took us a good

year and a half to figure out that He could have. ALS. And that was Brutal news to even entertain because we knew it was a death sense.

Well. And I think normally when people are diagnosed with ALS they live You should for another three, maybe up to five years, depending on

Yeah. Yeah. And the hard part is is is you You think How do we beat it? What can we do?

Yeah. You know, maybe there's a way, maybe we're the miracle and And then you're thinking, Well maybe it's something else still. Yeah. And so You know, we thought maybe it's Lyme's disease and he was getting treated and try flying to Colorado Springs, had a poor insert in his heart for Lyme's disease, and you're like, Well

You know, it could be that and maybe this will you know, and And he didn't really want to do that, but he asked me, he goes, Hey man, what do you think? And I said I go damn man I I think you should turn over every rock, man. Mm.

Tell me how you coped with I mean You were, you know Now you had to run this thing and he had to focus on his health, on getting better at or

Surviving Tell me about your Just like mental emotional state, you know, trying to be the leader and and a boss and This happening.

You know, not only was Dane my business partner, he was my My brother. He was my best friend. Yeah. What I now know is he was my mentor.

And uh For him to be going through this thing. It was horrific. And uh I was like

load it all on my back, I'll do everything that I possibly can to make sure that the business stays afloat and that it's working and that we go through this these storms and And literally um I was killing pan with booze and dope and It was tough.

You know, and and I was not healthy. The business was Doing okay. But I wasn't uh handling it well and it took its toll. It really truly did.

Yeah. And I think that there is a pivotal moment in time and it's when When he finally This is the deal with ALS. You either get a limb onset or it starts with your speech and it goes to swallowing and then it goes to your breathing diaphragm. So it had gotten to the place where

his breathing diaphragm, he was really having a hard time breathing and he was On oxygen, which is The worst thing you could do because He wasn't having a hard time getting oxygen in, he was having a hard time getting the carbons out. Mm-hmm.

So At some point he couldn't do it anymore, and we had to go to the hospital and And at that stage. He had the choice to be put on a ventilator and The family chose.

to go down that path and From there, he's probably one of the few people that was able to still walk. Yeah. With a ventilator. But it doesn't adapt to your heart rate, man. I mean

It's Air in, air out, air in, air out, and so You know, you can maybe take a few steps and pause. Mm-hmm. his quality of life for the next two years, seeing grandkids born and those kind of things and

going over to visit with them and watch music videos and and football games and that kinda stuff was was still there, but but it was It was brutal. I wan I wanna get a sense of your internal world.'Cause obviously what he was going through is just unimaginable. How did you you you said you were self medicating? Right.

Alcohol. Smoking pot. Or whatever you're using to doll the How did you

manage the business while you were Also suffering. How did you do that? You know. The business was

A huge priority. I felt compelled. For Dan. And his family. to continue to perform well and make sure that we continue to grow and scale.

And that If we were gonna go down this road and Dan wasn't gonna be here, I was going to make sure that I was able to Provide for them. Yeah.

So that was also driving you. Yeah, it sure was. You know, and so I had the wherewithal and I had the leverage. Two.

perform to the best of my ability and I had to ratchet it up and There came a time in two thousand eight. Where We had grown into some markets. The brand wasn't well known. It needed to be pioneered in those markets and and we had franchise owners that were willing and able, but

It was a challenge and We were growing with people that maybe had business experience, but they didn't necessarily grow up in the company and they maybe didn't have the principles or values all the way that we did and You know, the real estate bubble is was about ready to burst if it hadn't already.'Cause this is two thousand eight now. Yeah. Yeah. Two thousand eight. was probably the time where we made the heaviest I made the heaviest decisions that I ever made in my life with the company.

And uh We decided to draw a line in the sand and stop our our growth with franchising and evaluate. how we best should grow and and that's like stopping a train because you've got a year and a half of locations to go still open. that you're committed to with franchise owners that are growing. But I'm not I I'm just I'm confused. If

I mean two thousand eight You're growing, their franchise is growing. Yes. When people said hey Travis, I want open a location. You said No, we're we're freezing it right now. And they said, Well why? Why are you freezing it? You're doing so great.

What was your answer? I think when when we got to two thousand eight and we were struggling in these new markets with Boise, with Fresno, with Tempe, Arizona. Th there was the stores were not performing to the level where they were profitable.

Mm. When you buy a franchise I think there's an expectation that you're gonna get A brand name with a system to execute by and it's gonna profit. Yeah.

Yeah. Right. When You don't profit. People start to

come up with creative ideas that they think are gonna help them to get the result. Right. Ar team was trying to teach culture. To people at business document. And we knew that

We really didn't want to sell. franchises anymore to people who just had business. We had people that wanted to open thirty locations in a state and give us millions of dollars and we're like nah that's really not what we want to do. So what did you guys do? Like h how did you start to change things?

So I remember going in and talking to Dane and I was like Man. I don't know in and at this stage. Then

couldn't ride anymore. He he had lost his mobility. He was bedridden. And Our communication was him smiling or his eyes. Well. And uh I said to him, I said, Amen, I

I'm burning the candle at both ends here. I don't know if I should sell the company. Or if I need to like go work on me. Or you know, what I should do and Maybe I should go to one of those Tony Robbins seminars.

Huh. And he smiled. And His smile. In his eyes.

Said a thousand words to me. And I went to Tony's uh life mastery, his wealth mastery, the date with destiny, the UPW all of it. And the thing that happened

that was really unbelievable is he'd developed this thing and it was it was a test and it was called business mastery and We went to the first one and it was like seventy five people and I brought our team and I think I was only supposed to bring two of us and And it was ideas around like where you're at in the life cycle that you're in of of the company and where is the industry and its life cycle and what business are you really in? And I'm thinking to myself,

We're in the coffee business. It's pretty self explanatory. I mean we're we're selling beverages. Yeah. And one of my team members that That is like a brother to me. Dave looked at me and goes.

You know what, man? Maybe maybe we're in the relationship business. We see customers that come in day in day out. We have franchise owners. Who are running these businesses. We're trying to make sure everybody's

Beaten to the drone the same way. We're kinda ruling with an iron fist right now, but He goes, and maybe the product is love. And and I was kinda like. Maybe, but what the hell are you saying?

And the five of us sat down. And reflected heavily. And kinda got to this place of like You know what? That's exactly

And We gotta grow from within and from within only with the people who understand the culture that have the fire in their belly. And it was game changer. So you made a decision that year. that you would only sell franchises to people

from the system. Essentially. The prerequisite to to start a franchise was you had to have worked as a barista. Or manager at a Dutch Brothers location. Yeah, and and then

They didn't have the money. Yeah. So you had to finance that. Well no, we didn't have to finance them and we didn't they you know, a lot of people would magically I mean when you when you have that burning desire you find a way to get the money. Yeah. a mom or a dad or a an uncle or an aunt or a a customer for that matter that

We're willing to take the risk and put the money up. Then we kinda got to the place later where we looked at it differently. We said, you know what, we've got to bring the barrier to entry down and we've got to really I mean we'd never closed a store.

Because it didn't perform. Yeah. But I'll tell ya. It was a whole new approach and all of a sudden we started building momentum and those markets started flourishing and And uh

And it wasn't Shortly thereafter, in two thousand nine, I lost Dane. Two thousand nine, um, your brother passed away. from ALS who's fifty five years old. And

You now But I mean you'd already pretty much been running the business by yourself. But you didn't have him as um Your guide and mentor.

anymore. It was like It's all you now. Yeah. But Dane's wisdom and Dane's guidance and the values and the principles and the culture

Those were things that were established. Throughout our partnership and the time that we had together and Man, had I not had him there.

You know, he was He was the catalyst. As a leader. And he he led by example. He was the most selfless tolerant man that I've ever known. Hm.

At this point You're trying to To go forward. um you know running this company without

Without Dane. And you have This new approach on franchising So what did you do in terms of like growth? Did you also have a a different view of what

that was gonna be. I mean that that year I think that the year he passed away you had Something like a hundred and thirty five stores. In seven states. Did you still feel like You know, let's slow this down, let's not go so fast.

No I think um Венви стоп. the train, if you will, it didn't take effect until twenty ten. Mm-hmm. We only open two locations. in twenty ten as a result of

Hitting the brakes and Two thousand eight. In two thousand nine we start we turned growth back on, but it was with our own people only. And so we opened I want to say twenty locations in twenty eleven. Tell me about

the people who are coming into the stores. I mean Did you notice Like Because it's not a bar, there's no alcohol, it's a safer place to hang out, especially for younger people. Did you just notice?

Y certain groups of people Hanging out at the stores. High school and college students predominantly Hm. Part of that was

The service and Part of that was the music and part of that was rebel. Basically you guys just create it because You know, what started out as a coffee, hot coffee beverage place

really morphed into a cold beverage place and w and one of those things was was the rebel energy drink, which uh l let's talk about that for a moment,'cause that really began Earlier, right, you guys were serving Red Bull over ice. Yeah. And that was a popular option for some people. Yeah, it's it's hard to believe how the market in the industry has changed over the course of time, but

We ended up uh doing a a product. The was a frozen beverage like a granita, but better. We called it brain freeze in the early days and this was kinda the segue to colder beverages, blended beverages, and really um something that played a critical role in our growth and As we grew into Northern California, our franchisee down there.

Chris Rezer. He um We were offering Red Bull. And uh He started taking Red Bull. in putting different flavors from Tarani syrups in the Red Bull and pouring'em over ice.

And that was absolutely a game changer for our organization. And and back in the time that that we were serving Red Bull. They were adamant about their can. They wanted their product in their can to be served and you know at bars. If you were to go get a vodka Red Bull. bars would make you the drink and then they'd hand you the can with it to chase it.

Of Red Bull. Yeah, and that was like a requirement from Red Bull. Yeah, I mean they were so I mean they were like We don't like The idea that you're just serving it in a cup. Yeah. And you know, we're almost hesitant to continue to go forward with you guys, but you're doing so much volume.

And we're really interested in the volume that you're doing. So We went round and round and we were like well If we can't Come to a better agreement to where you guys Give us a better price point.

We do promos together, we figure out ways to work together here, then we're gonna probably need to do our own. Hm. And so We did and we were nervous about it and We didn't want it to be the same as as Red Bull. We wanted to uh

To have its own identity and And then when we we implemented it it was Dutch Pro's Blue Rebel and I mean we just started to explode. Did that become your biggest seller or one of your biggest sellers? It's one of our biggest sellers, yes. Yeah. Yeah.

If you go to the to the menu today, right, it's definitely different from where it began as a on that card. I mean it's like the drinks are very colorful. There's some coffee drinks, but there's mainly non coffee drinks. Sodas, lemonades, smoothies, Energy drinks, manganata. Really your your business is like

Sweet cold drinks. Well we have a nice Blend. And so You know, coffee is still the backbone of our business. Mm-hmm.

I think our number one drink as far as Hot beverages goes like a golden eagle. A latte like a like a Vanilla Carmel Mocha. Oh, okay, I got you right.

And I mean we serve a lot of iced Blended. frozen concoctions with coffee. Yeah.

What w you made a second sort of transition or pivot around franchising, I think around twenty fifteen or twenty sixteen. By that time you had about two hundred and sixty five locations. You were in seven states, still mainly on the West Coast. I mean you I think your your revenue is about two hundred and eighty million dollars in by twenty fifteen, but But you decided to stop franchising actually at that point. That the existing franchisees would

would still run their businesses. But that from that point forward All new locations would be corporate owned. Right.

Well Dan and I from the early stages always wrestled with Is it better to franchise? Is it better to be company owned? Yeah.

But Eventually it just made better sense to Morphe in the company owned stores and provide these regional operator opportunities to Uh

Farm league or the bench that we have that's developed. We've got three hundred and twenty Qualified. operators that aren't in those capacities yet that have more than four and a half years of experience today.

Yeah. I mean it's amazing'cause you started the the business in, you know, what Nineteen ninety two, yeah. Ninety two. And It was only in twenty eighteen When you brought in an outside investor.

T S G uh, which is a a huge um they they've got stakes and Big And they bought a minority steak. In

Dutch Bros in twenty eighteen. Correct. So they you know, once you bring out an outside investor, obviously the there's an end game, right? And it's either you sell it or you go public. And in your case. I mean you you eventually stepped down as a CEO in in twenty twenty one and the company went public.

Later that year. And you know, you raised five hundred million dollars that IPO. I mean it was it was a hugely successful I PO That

also turned you into a very, very rich I mean Probably Far beyond what you wrote down in a Tony Robbins, you know. Imagining your un limitless future when you were

Uh when you were twenty five or whatever with your brother I mean It it is kind of crazy, right? I mean the th that that you What started out as a coffee car turned into a billion dollar business.

And I still feel like we're small. Yeah. And for me Well, yes, there's this wealth and there's all this money and all that stuff.

You know, I'm just a regular dude, man. And I believe that You never arrive until you depart. Yeah. But the ambition

From what I understand is to grow to more than four thousand stores. That's like Starbucks level. Yeah and It comes back to providing opportunities for the people. I mean you can earn six digits on just one store when you get to a given community, drive your stake in the ground and

You know, so I love that we can Have Those opportunities for people to climb into those seats and we have an infrastructure to support'em with

It's really us. Doing the best we can with what we have, where we are, with everybody. Travis, when you think about this journey and and where do you you got to, I mean this is the biggest IPO in the history of any Oregon company, which includes Nike. just the biggest apparel brand of the world. Like you guys Yeah, did pretty well.

How much of of where you are now Do you attribute to To the grind to the work. to your skill and how much do you think has to do with Was getting lucky.

Let's put it this way, the struggle is real for all of us, no matter where you are and what you do and so The grind is part of it, but when Opportunity. And being prepared meat. That's where luck lives.

And You know This life. Isn't fair. And

You know, the loss of my brother I I probably learned the greatest lesson out of and Realizing that You know, I don't get to control everything. You know, I use this. Idea of like

Life has a destination, the river has a destination, it's the ocean if you look at it. You know, you can get a kayak and a helmet and an oar and and navigate your way, or you could be a log. fight it and swim upstream and exhaust yourself and If you're able to

Use the resources. that you've been given and you can step outside, walk downstream, see what lies ahead and try to plan for it the best of your ability. That's how I like to look at this life that we get to live and Hell, I'm the luckiest guy to ever live, I feel like. That's Travis Borsma.

Co founder along with his late brother Dane. Of Dutch bros. This is like a thought and I know there are gonna be people who might hunt me down for this. But could you make the argument that America is now a better espresso country, like better at espresso drinks.

Than Italy. Oh I know. I know. I'm gonna get I know. I'm just gonna say no to that.

Um And and you know what? I'm gonna go ahead and sit on the Italy side of it. Yeah, fair enough. Very safe. Very safe and diplomatic answer. Hey thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show and it's totally free. This episode was produced by Alex Chung with music composed by Ramteen Arablui. It was edited by Neva Grant with research help from Katherine Cypher and technical assistance from Gilly Moon. Our production staff also includes JC Howard, Casey Herman, Sam Paulsen, Liz Metzger, Carrie Thomson, Elaine Coates, John Isabella, Chris Massini, and Carla Esteves.

I'm Guy Raz, and you've been listening to how I built this.

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