Recently, there have been a series of American companies that have failed to successfully launch in Canada with the most recent failure being Target Canada. Target was thwarted in its movement across the border due to many tactical errors including opening too many stores too quickly at the higher Canadian prices , and failing to account for the smaller population size and different customer demands. Target’s inadequate first year sales scared many American chains from even attempting to cross the border.

However, I believe that Dutch Bros, a small drive through coffee franchise that started in Oregon, would be the ideal chain to capture Canadian interest. According to Matt Farrell on his blog, Dutch Bros breaks the standard of quiet, drowsy, artsy coffee shops with loud, vivacious, fast moving drive-through stands. The funky and hip nature of Dutch Bros combined with an open space in the Canadian drive through coffee market makes Dutch Bros the obvious choice for Canadian expansion.

But in order to successfully move from the States to the Great White North, Dutch Bros will have to overcome certain obstacles: retail space in Canada is limited and expensive compared to the US, and the cost of labour and doing business is higher in Canada. All of which might drive up their current low prices. Since Dutch Bros is purely drive-through, the retail space needed is much smaller and is more likely to be available in parking lots near  many malls and shopping centres. Also, even thought the costs of production and labour are higher, the current US price for a simple Dutch Bros blend coffee is $1.50. Therefore, the increased cost will not inflate the price so much that it will be above the current standard for a cup of coffee at Starbucks Canada (around $2.50).

These two strategies alone will not guarantee success for Dutch Bros. Yet, if they can start their expansion slowly, gauge the market responses and adapt quickly to change in demand, then the spunky, spirited, and satisfying coffee chain can take the espresso lane to success!