Dutch Bros vs. Hershey: Which Stock Is the Better Buy Before 2027?

Should you bet on a fast-growing coffee chain or a century-old candy titan? Choosing between Dutch Bros (NYSE:BROS) and Hershey(NYSE:HSY) requires balancing aggressive expansion against defensive stability.

Dutch Bros is a beverage specialist known for its drive-thru speed and custom energy drinks. Hershey is a global snacking leader with deep retail penetration. Both compete for consumer dollars in the discretionary and staple categories, making them a compelling comparison for growth-oriented and value-focused investors.

The case for Dutch Bros

Dutch Bros operates a rapidly growing network of drive-thru shops focused on hand-crafted coffee, teas, and its proprietary Rebel energy drinks. The company relies on a mix of company-operated locations and franchise partners to scale its brand across the United States. As of mid-2026, the company operated over 1,200 locations across 25 states.

In FY 2025, revenue reached nearly $1.6 billion, representing a significant growth rate of approximately 27.9% compared to the previous year. This expansion helped the company report a net income of roughly $79.8 million. As the company scales within the broader landscape of retail stocks, its ability to maintain this upward trajectory is a key part of the bullish thesis.

The case for Hershey

Hershey is a titan in the global snacking industry, managing a massive portfolio that includes Reese's, Twizzlers, and SkinnyPop. The company sells its products through wholesale distributors, grocery chains, and convenience stores worldwide. Its largest customer is McLane Co., which accounted for nearly 27% of consolidated net sales in 2025. This customer concentration adds a layer of risk to the business, though Hershey's brand power remains its primary competitive advantage.

In FY 2025, revenue reached approximately $11.7 billion, a 4.4% increase over the previous year. However, the company reported a net income of about $883.3 million, which was a sharp decline from the $2.2 billion earned in 2024. This contraction was largely due to rising costs for raw materials and integration efforts for new acquisitions.

Risk profile comparison

Dutch Bros faces significant risks from its aggressive expansion strategy and potential execution issues as it enters unfamiliar markets. Supply chain concentration is a primary concern, as the company relies on a limited number of co-packers for its proprietary beverages. It is also vulnerable to price changes for coffee and dairy, along with potential regulatory restrictions on drive-thru concepts. Furthermore, the company must manage rising labor costs and the integration of recent real estate acquisitions.

Hershey faces risks related to the high price volatility of key commodities like cocoa, sugar, and dairy. The heavy reliance on McLane creates a significant revenue concentration risk if that relationship were to change. The company also deals with intense competition in the snacking industry and must navigate environmental regulations like the EU Deforestation Regulation. Additionally, Hershey must successfully integrate recent acquisitions, such as LesserEvil, to realize their full value.

Valuation comparison

Hershey offers a more traditional value profile, while Dutch Bros commands a significant premium due to its rapid revenue growth.

Which stock would I buy in 2026?

While both companies are in the consumer goods space, they differ in the stages of their business operations. Dutch Bros is expanding aggressively, opening 48 new stores in the second quarter of 2026 alone. It isn't in every state yet so that it could have plenty of room for future expansion. In comparison, you can walk into almost any convenience store or grocery store across the United States, and you can find multiple different types of candy made by Hershey.
I do like Dutch Bros as an investment, and I still think it could have a spot in a portfolio as a high-growth stock worthy of a small, speculative stake. That said, between the two companies, I would rather own Hershey. The main reason is that, given the general uncertainty in the markets, I'd rather own a more mature company that generates hundreds of millions or billions of dollars in net income; Hershey generated $883.3 million in net income in 2025, while Dutch Bros generated less than $80 million.

Hershey is also able to pass on its earnings as dividends, which yield 3.4%, while Dutch Bros does not offer a dividend. Also, while the Hershey stock price is down 5.4% over the past 12 months, Dutch Bros' shares have dropped 27.1%. Hershey may be in a more defensive position, but with all the uncertainty swirling around, that currently gives it an edge over Dutch Bros as an investment.

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