By Evie Liu

America's fast-growing specialty beverage chains are locked in a land grab. The winner may not be the brand with the strongest name, but the one that gets to the market first and builds enough stores to keep rivals out, one analyst says.

Over the past five years, while total visits to beverage chains has risen 4% annually across major markets, visits per store have declined as new stores entered the market. Total store counts in the category have increased at a fast annual pace of 6%, Stifel analyst Chris O'Cull wrote in a research report published on Wednesday.

Emerging chains like Dutch Bros and 7 Brew Coffee -- which focus on fast, customizable beverages -- have taken market share from legacy brands like Starbucks and Dunkin' Brands Group. Dutch Bros stock is up 30% over the past five years, while Starbucks shares lost 14%. 7 Brew is a privately held company.

But branding isn't the decisive factor in the battle, O'Cull wrote. The frequency patterns of customer visits are nearly identical across Dutch Bros and 7 Brew Coffee regardless of their competitive position. That means consumption habits aren't shaped by loyalty to a specific brand.

Instead, first-to-market advantage is key. When one brand establishes an early and dense presence, it tends to maintain stable traffic levels even as competitors enter, the analyst wrote after analyzing store traffic for Dutch Bros and 7 Brew in newly entered markets.

"Across these competitive scenarios, whether Dutch Bros or 7 Brew is defending, the entrenched leader typically maintains stable visitation, while challenger units experience an initial trial spike before settling at levels below the incumbent's average," O'Cull says.

Both chains are aware of this. 7 Brew is growing through a franchise-heavy model, aiming to establish a presence in as many markets as possible before competitors arrive. Dutch Bros, by contrast, is building dense clusters of stores in existing markets to strengthen its dominance and block out challengers.

The biggest risk ahead is oversaturation. With store growth outpacing demand, unit-level returns could decline as markets become too crowded. This raises the likelihood of consolidation as a path to continue grabbing market share without overdevelopment. Dutch Bros, for example, recently acquired a smaller regional chain called Clutch Coffee Bar.

"It's unlikely brand prestige will displace a first-to-market incumbent, " wrote O'Cull, "So if you can't out-brand a competitor, your only options are to overbuild or buy them."

Larger national chains aren't sitting still: McDonald's is expanding its beverage offerings to include energy drinks, while Starbucks is working to regain its strength with high-quality coffee drinks and other menu innovations such as protein foam.

Write to Evie Liu at evie.liu@barrons.com

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April 09, 2026 15:40 ET (19:40 GMT)

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