Dutch Bros reported beverage, food and packaging costs at 27% of company-operated shop revenues, up 160 basis points year-over-year. Labor costs improved to 26.2% of revenues, down 90 basis points, and occupancy costs fell to 17.2%, a 30 basis-point improvement, while preopening expenses rose to 2% of revenues.

For full-year 2026, Dutch Bros projects 80 basis points of total cost-of-goods-sold pressure, with 200 basis points in the first quarter expected to step down later. The outlook also includes an additional 70 basis points of adjusted SG&A leverage following the 140 basis points generated in 2025.

Build-to-suit leases accounted for approximately 45% of the portfolio in 2025, and continued progress toward the targeted mix will push occupancy costs higher as the year progresses. The shift is anticipated to support long-term store-level productivity despite near-term cost increases.

Unlike Starbucks and McDonald’s, Dutch Bros faces concentrated coffee-cost exposure and inventory lags that delay commodity price pass-through by two to three quarters. Competitors leverage global procurement scale and menu diversification, while Dutch Bros will rely on pricing, throughput and cost discipline to manage margin stability.