Dutch Bros Coffee, a company that has coffee stands across the west and south, started in Grants Pass Oregon by Dane and Travis Boersma who lived in the area.  This is not uncommon that people start their companies where they live.  It is hard enough to initially develop a business and these startups generally start either in someone’s house or garage, or get formulated in another business, school or incubator of some sort.

 

Along the was determined their business was not doing as well as it could with certain business operations staying in that area.  For businesses there are multiple reasons that this can occur.  Dutch Bros Coffee had mentioned three specific things, better access to growing southern US markets, talent acquisition, and proximity to a major airport.

 

Looking at the growth patterns of Dutch Bros, They started in Oregon, developed locations going to the south of Oregon down the west coast in California then heading east in the southern states.  Their growth path have and are following populations in larger areas as they head east.  As a comparison, if they did their initial expansions going west from Oregon, it is just a population fact that there is much land but not many people until you hit eastern Nebraska, Minnesota,  North and South Dakota then into Iowa, Wisconsin, and Illinois.  

 

The second concern is talent acquisition or people to work in key positions.  This reasoning has been used before.  Caterpillar Tractor moved certain executive functions from Peoria Illinois to Suburban Chicago, and then to Irving Texas for similar reasons.  It is a risk that when companies get to a certain size in relation to their population they seek to move.  However, it is necessary to look at the definition of “talent”.  The growing work at home and hybrid home and office economy makes this a more challenged reason, but it is up to the company culture to want to participate in these work styles.

 

The third reason given is proximity to airports.  Forty minutes from Grants Pass there is the Medford Oregon airport.  There is flight availability.  There is also a smaller airport by Grants Pass.  The question is, how much does the coffee business have a need for an airport?

 

Dutch Bros Coffee set up part of the operation in Tempe Arizona. Something interesting happened along the way in the decision to solve their problems.  Arizona also has a better business and tax climate. Arizona offered no special incentives. Arizona increased their state revenues while not needing to offer a bribe. Dutch Bros Coffee came and chose on their own.  Please note that the airport on a good travel time is about fifteen minutes from the Tempe headquarters (I have been in traffic in the Phoenix area and that trip can easily expand to forty five minutes).   

 

Oregon’s governor could not say much for risk of losing the rest of the Dutch Bros operation that stayed in the state.  While Oregon may have missed on the other points, we ask why Dutch Bros passed on San Francisco and Los Angeles on the way to Phoenix Arizona.  Tax, business climate and regulations are hampering California’s ability to attract and retain businesses.

 

It is an important lesson for government entities.  Be ready to be the best location.  Government entities need to be mart and frugal in their operations and directives. These entities must realize what is needed for the good of the citizens they represent.  They must realize what they cannot do and truly control. They must understand what the repercussions of promises really are!  Be the location that business and people want to come without bribing them.

 

It should be noted that Dutch Bros Coffee CEO Christine Barone is an Arizona native who assumed leadership in January 2024 had been instrumental in driving the company’s expansion and relocation strategy. To be fair, Microsoft started in Albuquerque, New Mexico and Bill Gates and Paul Allen moved it back to Redmond WA, a suburb of Seattle WA where they grew up. This has been a factor in a number of “Corporate” location moves.  Caterpillar Tractor had not thought about corporate location moves until their leadership hiring started coming from outside the company versus a work your way up approach.  Some companies do not move corporate headquarters but do appropriate obnoxious amounts of money to accommodate remote corporate leadership living arrangements.

 

Businesses will be looking for alternative locations.  My grandfather gave me good advice.  Always look for the next location the day you sign the current lease or close on the current location.  Not that there will be a better deal, but there may be a need to expand or go to another location.  I know this from multiple experiences. It is quite good advice not only for moving on, but also for staying.  It is good knowledge to have when companies in your community start hinting about corporate relocations.