Dutch Bros or Starbucks: Which Coffee Stock Has More Growth?

Key Points

• Starbucks and Dutch Bros stocks are under pressure as weather-related damage and tariff concerns are driving coffee prices to record highs.
• Starbucks is the category leader but is going through a tough transition; Dutch Bros is the relative newcomer but is trading at an eye-popping valuation.
• For growth-focused investors, BROS stock appears to have more upside, though waiting for a better entry point may be wise.

Just when investors were getting a nice buzz from soaring stock price of Starbucks Corp. NASDAQ: SBUX and Dutch Bros Inc. NYSE: BROS, both stocks were whacked by rising coffee prices. Starbucks is down over 4% in the last 30 days and Dutch Bros is down over 12%.

The threat of tariffs and a possible recession isn’t helping matters and makes investors wonder if these stocks are approaching fair value or if they’re falling knives. Both companies offer solid baseline fundamentals, but at a time when investors are thirsting for growth, should investors consider sipping on either of these two retail stocks?

Two Different Stories

Both Starbucks and Dutch Bros are in the retail stocks sector, but they also have characteristics of consumer discretionary stocks. That is, consumers may choose to forego their regular beverage routine when discretionary dollars get tight. However, both companies have a passionate customer base that makes them

Starbucks is the category leader and is an international phenomenon with nearly 17,000 stores in the United States as of February 2025. Although the idea of a local coffee shop existed before Starbucks, the company has changed how many consumers think about coffee.

The company’s category leadership shows up in its financials. Starbucks generated $3.10 in earnings per share on $36.1 billion in revenue in 2024. Both numbers were lower year-over-year (YoY). That was one reason that the company is in the middle of a transformation led by former Chipotle Mexican Grill chief executive officer (CEO) Brian Nichol.

Dutch Bros is a relatively new kid on the block as far as investors are concerned.

Although the company has only been publicly traded since 2021, it has a devoted customer base that’s attracted to the taste of its drinks and its commitment to making a difference in the communities in which it operates.

Speaking of that, Dutch Bros has a smaller footprint than Starbucks. The company opened its 1,000th location in Orlando, Florida, in February 2025.

BROS stock was one of the best-performing stocks of 2024, and that trend continued in 2025. Even with the sell-off, it’s still up 11% in 2025 and 92.6% in the last 12 months.

Your Daily Fix Is Getting More Expensive

Coffee prices are climbing, a trend evident to regular visitors of popular coffee spots. What may be less known is that Arabica coffee prices have surged over 70% since November 2024, reaching an all-time high in February—levels unseen since 1977.

The knee-jerk reaction would be to blame the increase in tariffs. And the threat of tariffs (real or imagined) is playing a role. Coffee futures soared in January due to the Trump administration’s threat of a 25% tariff on the country, which is responsible for 30% of U.S. coffee imports. However, as of this writing, the bigger concern about tariffs is the uncertainty regarding when or if they will be put in place.

But there are other issues at play. One of the most significant is what’s called the “black frost” in Brazil, which impacts the productivity of the coffee plant. The frost is coming while the country is still in the midst of a severe drought.

This is significant because Brazil, Colombia and El Salvador are the three countries from which Dutch Bros purchases the 100% Arabic beans that make up the company’s signature Private Reserve Blend.

By contrast, Starbucks sources its coffee from more than 30 countries. While it has heavy exposure to Latin America, it also sources some of its unique roasts from Africa and Asia/Pacific. That said, Starbucks buys approximately 3% of the world’s total coffee supply, so even its geographic diversity doesn’t shield it from pricing pressures.

If You Had to Pick One

With both stocks trading at premium valuations, it’s tough to make a recommendation for one over the other. BROS stock trades at over 111x forward earnings, which makes SBUX stock look comparatively cheap at 35x forward earnings.

No matter how it’s viewed, investors are paying a premium for growth, with both stocks still trading well above their 200-day simple moving averages despite recent declines.

For those focused on growth, valuation concerns may need to be set aside. A move below the 200-day moving average could present a buying opportunity for BROS stock, which, while still highly valued, benefits from earnings growth and expansion while being less affected by coffee price fluctuations.