When I Try to Imagine the Best Investment Opportunity for the Next 10 Years, I Keep Coming Back to This Stock

Whenever I try to picture where the biggest long-term gains might come from, my mind does not land on a flashy artificial intelligence (AI) chip or a rocket company. It lands on a drive-thru coffee stand that much of the country has never visited.

I remember the first time I visited Dutch Bros (NYSE: BROS). Today the company has around 1,200 shops, mostly in the western United States, and I think the next decade could see it become a household name from coast to coast. That is exactly the kind of runway that turns a good stock into a great one.

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A store count that could grow sixfold

The heart of the Dutch Bros story is simple math. The company has about 1,200 locations now, plans to reach more than 2,000 by 2029, and has talked about an eventual footprint of 7,000 shops nationwide. That would be roughly six times its current size.

Because its stores are small drive-thru and walk-up stands rather than sprawling cafes, each one is cheap to build and quick to open, which makes stamping out hundreds a year realistic rather than fanciful. When a company can profitably replicate a small, proven format thousands of times, its growth can compound for a very long time.

More than one lever to pull

What makes me more confident is that Dutch Bros is not relying on new stores alone. It's rolling out food, which historically it has barely offered; early results show food locations getting a lift of about 4% in comparable sales, with the rollout nearly complete. That's a meaningful bump layered on top of unit growth.

Mobile ordering, another recent addition, is speeding up the company's famously long drive-thru lines and pulling in more visits. Sales at established shops have been climbing on genuine traffic gains, not just price hikes. Several engines are firing at once, and most are still early.

The secret sauce is the brand

Here is the part that numbers alone miss. Dutch Bros has built something rare: a coffee brand that people are loyal to in the same way they're loyal to a favorite band.

Employees, called "broistas," treat pickup service like a conversation. And a menu of customizable energy drinks and sweet, colorful concoctions has made the company a favorite of younger customers. Those customers are forming habits now that could last decades, and the Dutch Rewards program keeps them coming back while handing the company a direct line to its fans.

Even as competition in coffee and energy drinks intensifies, Dutch Bros keeps winning traffic. It behaves less like a coffee seller and more like a lifestyle brand that happens to serve caffeine.

I would not call this a safe stock. It trades at a rich valuation, so a lot of that growth is already priced in, and any stumble could hit the shares hard. Expanding nationally means entering unfamiliar markets where the brand is unproven, and protecting its beloved culture while opening shops at a breakneck pace will be a genuine challenge. Weaker consumer sentiment could also slow discretionary coffee runs.

This is a growth stock, with all the volatility that label implies.

Micah Zimmerman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Dutch Bros. The Motley Fool has a disclosure policy.