The drive-thru coffee business has quietly taken off in recent years, a trend that was injected with a dose of caffeine during the pandemic. Chains such as Dutch Bros and Scooters are expanding quickly with their drive-thru locations, providing a jolt of competition to existing coffee chains Starbucks and Dunkin’.
Into this market has stepped Seven Brew. The Fayetteville, Ark.-based chain operates just nine units, mostly in Northwest Arkansas, and hopes to have 20 by the end of this year. It also announced plans to start franchising the brand, which could quickly take the brand to other parts of the country.
Evan Grisham, the company’s president and head of franchising, understands the competition Seven Brew faces, but said its experience—something not typically mentioned with drive-thru concepts—gives it a big differentiator. Music, chosen by the chain’s “brewistas,” blares from speakers in the drive-thru.
“We have some elements unique from the traditional way drive-thru was done,” Grisham said. “There’s a fun, exciting upbeat experience consumers have when they visit us.”
“It’s high energy,” he added.
Drive-thru has become a major industry battleground post-pandemic, but it’s particularly notable in the coffee space, where the vast majority of occasions are takeout, anyway—and more of the market has shifted away from the sit-and-drink-coffee-all-day model that emerged in the early 2000s.
Starbucks, the country’s largest coffee chain and the second biggest concept of any kind in the U.S., has shifted more completely toward developing drive-thru locations in the suburbs. Dunkin’, meanwhile, has eaten into its rival’s lead thanks in part to its already-developed drive-thru locations.
Meanwhile, concepts such as the 400-unit Dutch Bros and the 300-unit Scooter’s Coffee add a generation of upstarts to this market, not unlike the growth of drive-thru burger chains in the 1980s and 1990s. Both have quietly grown quickly going into the pandemic.
Seven Brew was founded in 2016 and has gradually added locations since then. As the new kid on the block, Seven Brew has some distance to go. But it’s now armed with some investment cash from Drink House Holdings, an investment partnership from Jimmy John’s founder Jimmy John Liautaud and Lone Star Steak House founder Jamie Coulter.
The group should provide some expertise to Seven Brew—Coulter is a longtime Pizza Hut franchisee, for instance.
“We’ve been laying the foundation, putting in needed systems,” Grisham said. “At the point we’re at now, the foundation is there and it’s sturdy. We’re ready and able to go out and partner with the right people who can see Seven Brew through a similar lens.”
One of the major draws for drive-thru-only concepts is their buildout costs, given their generally small footprint—a fact that could be handy at a time when just about everybody is on the lookout for sites that can be converted into a drive-thru.
Existing locations generated between $1.3 million and $2.2 million in sales last year, according to the company’s franchise documents—provided after we pressed them for initial investment figures. Cost to build a location ranges from just over $500,000 to just more than $1.1 million.
“The model we operate is one that, when done correctly, can be a very efficient model,” Grisham said.
The company does understand the competition it faces in the market. But Grisham noted that there is plenty of space out there for Seven Brew’s offering. “We look at the coffee landscape, the beverage landscape, and see there is plenty of white space for another competitor,” he said.
“We offer a unique experience, something they hadn’t had an opportunity to experience before,” Grisham added. We’re confident we have the right brand and the right operations to compete with anyone in the space.”
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