Dutch Bros, a drive-thru coffee chain, has reached an agreement to acquire a competitor as part of its expansion strategy for the drive-thru coffee model.

Headquartered in Arizona, Dutch Bros operates 1081 stores across the US. The company has agreed to acquire North Carolina-based Clutch Coffee Bar for an undisclosed sum.

Under the agreement, all 20 Clutch Coffee Bar locations ceased operating under the current brand from January 16. The stores will close temporarily for renovation and reopen as Dutch Bros outlets next month.

“This was not a decision made lightly,” said Darren Spicer, founder and CEO of Clutch Coffee Bar.

“Rather, it comes from a place of deep pride in what we’ve built together, and a belief that this next step will allow the culture, energy and community-first spirit you helped create to continue to grow on an even bigger stage.”

In Texas, Dutch Bros has more than 200 stores. The acquisition will expand its presence on the East Coast, adding locations in North Carolina and South Carolina.

The acquisition marks a change in the US drive-thru coffee segment, which has mainly expanded through organic growth and franchising. Expansion has been concentrated in the southern US, supported by highway infrastructure, car dependence and demand for convenience.

The transaction indicates that US drive-thru coffee chains are exploring alternative approaches to expand market share, with Dutch Bros the first operator in the segment to acquire a direct competitor. 

The company targets 2029 stores by 2029 and has a longer-term target of 4000 locations.