Every day people around the world consume 1.4 billion cups of coffee, and the drink is the second largest export in the world behind oil. The United States guzzles more coffee than any other nation, and the demand for the brew is high, especially among sleep-deprived college students on the go and short on cash. When they need a quick pick me up, or for some, even a new job, many turn to Dutch Bros., a company that started locally and is fast growing into a national phenomenon.
Dane and Travis Boersma, the Dutch brothers from Grants Pass, Ore., saw coffee as more than just a drink, to them the bean provided a whole new world of opportunities. Their family dairy farm was facing closure as government violations and expensive mandatory upgrades dried up any future profit hopes and the daily chore of milking cows was utterly boring.
“The brothers have this joke that one day they were milking cows when one turned to the other and said ‘anything is better than this,’ they agreed and decided to move on,” Jeremy Webber said. Webber has worked at the 311 E. 11th Ave. stand for the past three years, but also worked with the Boersma brothers in Grants Pass during 1995.
Leaving the dairy farm, the brothers purchased a pushcart, loaded it with a few coffee urns and a one-head coffee machine, and strolled through downtown Grants Pass operating as small-time coffee peddlers. Working with a wholesale coffee roaster in Eugene, the brothers perfected their three-bean private reserve blend using customers as their guinea pigs. They handed out free coffee to anyone walking by, and with customer feedback the roast was eventually up to par with their expectations. The brothers blared music from their coffee junction and turned the G Street and 6th Street corner into a Java party. Eventually coffee prices soared to $1 per cup, and the Boersmas were in business.
Their amiable attitude and easy access by walking or driving up to order caught on quickly, and proved to be the foundation of success for the company that started with a pushcart and now serves coffee in cups adorned with windmills and flowers at 115 drive-up stands in six states and grossed $30 million in 2005.
Dutch Bros. success rests not only on how it caters to each of its brew-needy customers, but its unorthodox marketing ideas.
“The way they do business is dangerous and they’ve made a lot of mistakes, but they have always been great guys and that’s where the success has been,” Webber said.
One of those dangerous practices is giving away coffee for free. It may be a jovial small town Oregon attitude or an ingenious marketing scheme, but each new stand is opened with a ceremony of two free days of coffee and bumper stickers for everyone who shows up. Customers can choose between the Dutch Freeze, Almond Joy, Double Torture, Kahlua Kicker, or any other menu item, including the ER-911 – six shots of espresso with Irish cream and their special kick-me-mix. Charity donations and free coffee days are part of a community give-back program in which one percent of gross sales are given through donations or coffee handouts such as free coffee for any female on Mother’s Day.
“Our biggest advertising is our free days and our promotional days. You get more name recognition and people coming to your business by giving away free products than any type of television spot or other traditional advertising,” Kenny Stromer, the zone manager for Eugene said. “We’ve kept that style of marketing and it’s what made us who we are today.”
Employees have a goal each day that is not based on sales or volume, but quality, customer service and speed. Long-time employee Ron Watkins says the success is bred from great customer service because the employees truly enjoy their jobs.
“They treat their employees really well and it’s like a big family,” Watkins said. “They do whatever they can to make you happy and that transfers to how we treat our customers.”
Watkins routinely calls customers by their first names and he creates an atmosphere more like a friendly gathering than a place of business. The outgoing Watkins recounts a time when a lady came to his stand on 110 W. 7th Ave., after her car broke down in the parking lot. He abandoned his coffee post and tried to jump-start the lady’s car with his own truck. When that failed he tried his girlfriend’s truck, which didn’t work either, and eventually called AAA. Watkins said the insurance company helped her and, “she has been back every day since, she even invited me to a barbecue at her house.”
The company’s creed states it is “all about being positive and lovin’ life,” and “to be too large for worry, too noble for anger, too strong for fear, and too happy to permit the presence of trouble.” The company is taking this creed with it as expansion throughout the Pacific Northwest and beyond. It’s outpacing even its Web site which lists 112 locations instead of the total 115 now opened from as far south as Arizona, up to Washington and out to Idaho and Nevada.
The Pacific Northwest is also home to Starbucks, the coffee chain that fired up the coffee house revolution decades ago. It too started from humble beginnings, and grew from a small coffee shop in the frenzied tourist haven of Pike Place Market in Seattle into a corporate giant. What once was a small coffee roast has evolved into a trendy hangout that is so successful it has a number of investing how-to books dedicated to it.
The Starbucks on the corner of 13th Avenue and Alder Street, nearest to the University, has a visibly different marketing strategy than Dutch Bros. Coffee. The large building is painted inside with dark wooden colors and artsy designs that make you feel like a trendy, hip coffee bean in a bag of other trendy, hip coffee beans. The items they sell are on the edge of mainstream, but not so alternative to be unprofitable. A $1,500 DeLonghi espresso machine sits gathering dust and surrounded by 18 different styles of coffee mugs and 15 kinds of thermoses. Metal mermaids with steaming oversized cups of coffee adorn the room as the company’s mascot.
The store is a gathering place for students, working professionals, and parents with their children who meet for relaxing conversations and order coffee from employees who operate with military formation and robotic commands.
One of those students stood in line and asked for a tall espresso.
“Tall espresso,” the expressionless cashier ordered.
“Tall espresso,” an automaton barista repeated, confirming the order like it came from a drill sergeant.
The customer forgot to tell the cashier he wanted fat-free milk.
“Recall,” the cashier instructed her soldier at the espresso machine. “I need a tall non-fat espresso.”
“Tall non-fat espresso,” her barista obediently retorted.
The scene was robotic and dry, just another transaction and nothing more. Cash was exchanged and the customer was herded over with the others waiting in the corner by the sandwich shop.
“They’re not really selling coffee, they’re selling a type of culture and a different type of vibe,” Webber said. “I’m not bashing them or anything, it’s just a different attitude than ours that’s all.”
The Dutch Bros. coffee stands like the one Webber works at are more informal with less emphasis on appearance and more on customer interaction. The drive-up stands don’t have any French presses, CDs, or flavored breath mints, just drinks. In front of the walk-up window is a blue, metal-mesh table for customers to sit down and a lawn where two women lay with their dog sipping on a frozen coffee. In line stand three middle-aged women in work attire, an old man hunched over, and a homeless man in busted leather boots. Both car lanes are full of autos that extend out to the street. One drive-up window has an old taxi van idling and the other a new BMW. Watkins talks to the customers he knows so well he calls them by first name and has memorized their drink orders. He asks how they are and they chat about life in gener
al. No one in line looks impatient and soon the next car is pulling forward and Watkins greets the customer inside by first name again.
Eugene has seven Dutch Bros. stands and the newest one is on 2145 W. 7th Ave. In 2000 the 2115 Franklin Blvd. stand became the first to settle in Eugene, and now another one is planned to open on Coburg Road in the near future. Springfield has four and there are 10 Starbucks in the area.
So while Starbucks may have the edge when it comes to total sales and it best takes advantage of the booming coffee market, the Dutch Bros. owners would probably be the ones encouraging their employees to go out with the pushcart and give away free coffee to people walking down the street.
“If you go into a Starbucks and you don’t like your coffee or you have a problem with your order then they have to call over a manager, and it’s a big hassle,” Webber said. “Here there’s none of that. If you’re not happy with your drink we’ll make you 10 others for free. If you’re in the parking lot and trip or having a bad day we can give you a free coffee to cheer you up.”
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