Welcome to the annual meeting for Dutch Bros. At this time, all participants will be in a listen-only mode. I would now like to turn the call over to our host for today's call, Ms. Victoria Tullett, Chief Legal Officer and Corporate Secretary. Please go ahead, ma'am.
Thank you and good afternoon. I'm very happy to welcome you to the Dutch Bros Inc 2026 annual stockholders meeting. Before we begin, please note that our prepared remarks and discussion today may include forward-looking statements. For example, information and expectations regarding Dutch Bros possible or assumed future results of operations, new shop openings, business strategies, and potential growth opportunities, which are subject to risks, uncertainties, and assumptions that may cause actual results to differ materially. They are qualified by the cautionary statements and risk factors in our most recent annual report on Form 10-K and quarterly report on Form 10-Q. We may also reference non-GAAP financial measures today. As a reminder, non-GAAP measures are neither a substitute for nor superior to measures that are prepared under GAAP. Please review the reconciliation of non-GAAP measures to comparable GAAP results in our most recent quarterly report on Form 10-Q.
With that, I'd like to introduce Christine Barone, Chief Executive Officer and President, and a member of the company's Board of Directors.
Thank you, Victoria. Good afternoon. As I shared last week on our Q1 2026 earnings call, Dutch Bros continues to operate in a category of its own, anchored by a people-led culture that creates authentic customer connection. With disciplined growth and continued investment in our people, the long-term outlook remains incredibly bright. Our first quarter results meaningfully exceeded expectations, driven by the passion of our Broistas, the strength of our all-day beverage platform, category-leading innovation, and our idiosyncratic transaction drivers, including the rollout of food. Our transaction-driving efforts maintain momentum from Q4, translating to seven consecutive quarters of transaction growth. Our customers continue to choose us for our customization, innovation, and incredible customer service. Our Q1 2026 shop openings were ahead of schedule, with 41 system shop openings in Q1. Our path to 2029 shops in 2029 remains very clear.
This reflects the positive impact of our disciplined real estate pipeline work. Moving forward, we remain confident we can continue to accelerate our long-term shop openings as our market planning and real estate investments pay off. Our AUVs are at record levels and new shop productivity remains in line with system averages as momentum behind our stepped up brand awareness remains strong and our customers continue to respond to our focus on speed, quality, and service. Our foundation is incredibly strong. Our focus on speed to market with best-in-class innovation, a hyper-customizable menu, and unmatched customer service play a critical role in delighting customers and building an everyday routine. It's clear we are poised to continue shaping and commanding a leadership position in the large and growing beverage category. In fact, we are consistently rated the top beverage chain for service.
At the center of that performance and what truly sets Dutch Bros apart is our people. Our commitment to a company-operated model allows us to consistently invest in culture, development, and leadership, and that's what enables us to build strong teams at scale. We're a great place to work and to grow. We create a fun, high energy environment for our Broistas while also providing clear and compelling futures through internal growth and leadership development. That investment drives strong engagement and retention, and it allows us to develop leaders who build connected, high-performing teams. When our crews are engaged and connected, customers feel it through the energy, the conversation, and the genuine care in every interaction. Turning to real estate, our line of sight to 2,029 shops in 2029 remains very clear, and we're energized by our progress so far.
We continue to strengthen our development pipeline. Our market planning team has a robust plan to continue executing our strategy of densifying markets while we expand into new. The buzz and excitement around the Dutch Bros brand remains strong. We have no shortage of potential sites for new builds and a healthy pipeline of attractive conversion opportunities. These include sites from limited service operators, smaller emerging growth concepts, and legacy beverage brands. Let me share how we are continuing to widen our competitive moat through a focused set of transaction growth drivers we've introduced over the past several years. Our new food rollout continues to perform exceptionally well, and as of Q1, we have completed the food rollout across 485 system shops, including 11 franchise shops.
The program continues to maintain a high level of operational efficiency even as we launched a 9th SKU as part of the rollout in Q1. Based on the strength of results to date, we now expect the new food program rollout to be largely complete across our company-operated fleet by the end of Q3. Category-wide innovation across our menu continued in Q1. Earlier this month, we launched Myst Energy Refreshers, a new plant-powered energy platform designed to expand our reach. These beverages are carbonated, light, and refreshing with antioxidants, electrolytes, and fewer than 100 calories. During testing, Myst saw strong customer demand and notably similar customer retention to our first to market protein coffee offering, suggesting potential for this to be a part of our longer-term energy platform. Switching to Dutch Rewards, we ended Q1 at an all-time high of 74% of transactions flowing through the program.
Our continued success in acquiring new customers into Dutch Rewards has been supported by order ahead adoption continuing to climb, which reached approximately 15% of the total transaction mix in Q1. We are continuing to grow our segmentation capabilities, in Q1, we saw meaningful improvement in our in-app offer effectiveness and customer engagement as a result. When we segment our rewards program, transaction growth in Q1 continued to have momentum among Gen Z and millennials. Over the past three years, we've strategically increased our investment in paid working media with a clear objective: introduce more customers to the brand. Our unaided awareness has more than doubled in the past year and a half, a testament to the momentum that our investments in media, community-driven events, and our best-in-class social media program provide. CPG is our latest initiative to continue building brand awareness.
We just completed the first quarter with our CPG products in select retail outlets and are pacing ahead of expectations. Our efforts to improve throughput continue to gain traction. We've enhanced our labor deployment model by increasing our visibility into hourly and daily staffing levels to match customer demand. In closing, we are excited by what lies ahead. Dutch Bros remains a special brand, and our people continue to be at the heart of everything we do. We are growing our people and building compelling futures. Through investments in our teams and a tenured operator pipeline, our people remain at the forefront of how we grow. We are growing our occasions, building everyday routine, and naturally taking share. Transaction growth is consistently strong, and we are excited about our innovation roadmap. We are building our brand for the long term.
The strength of Dutch Bros was evident throughout Q1, with total revenues growing 31%. Our best-in-class value proposition continues to resonate, reflected in seven consecutive quarters of transaction growth. We are growing our development pipeline with a clear path to further densify existing markets while expanding into white space markets on our way to 2,029 shops in 2029. Lastly, we believe our foundational approach is purpose-built to lead the expanding customized beverage category. Dutch Bros is designed for how customers want to experience beverages. A platform optimized for to-go occasions, cold beverages, customization, and consistency. Our confidence to lead and command the category over the long term has never been stronger. With that, I will now turn the call back over to Victoria Tullett, our Chief Legal Officer and Corporate Secretary, to conduct the business of the meeting.
Thank you, Christine. The meeting will now officially come to order. The time is approximately 2:08 P.M. Pacific Time on May 13, 2026. The polls are now open for voting on all matters to be presented. As you know, we are hosting today's meeting through an online platform hosted by Broadridge Financial Solutions. This meeting is being recorded and will be available via webcast on our company website for the next 30 days at investors.dutchbros.com. In addition to Christine, we are joined today by Travis Boersma, our Co-founder and Executive Chairman, and our other director nominees and several members of our executive management team. Also in attendance are representatives from KPMG, the company's independent registered public accounting firm, and Cooley LLP, the company's outside legal counsel, who are available to respond to appropriate questions as needed.
We will proceed with the formal business of the meeting in the order set forth in the notice of annual meeting and proxy statement. We will first present the three proposals submitted for approval by our board. After all of the proposals have been presented, we will announce the preliminary results of the voting. As I mentioned, the polls are open for voting on all matters to be presented. Each share of Class A, Class C, and Class D common stock is entitled to 1 vote, and each share of Class B common stock is entitled to 10 votes. After I describe each item to be voted on, we will close the polls. We will not accept ballots, proxies, revocations, or changes after the polls close.
If you have already submitted your vote by proxy and do not wish to change your vote, you do not need to vote now, and your shares will be voted as previously instructed. If you intend to vote and have not already done so, you must submit your vote online now in order for it to be counted, and I encourage you to do so now. After the formal part of our meeting has concluded, we will have a Q&A session with our CEO, who will answer appropriate questions related to the purpose and business of this meeting in accordance with the rules of conduct. The rules of conduct have been posted on our annual meeting website. We ask that you abide by these rules so that we can conduct an orderly meeting.
Stockholders who are attending this meeting with a valid 16-digit control number may submit questions or comments for the Q&A portion of this meeting through the text box located on the virtual meeting screen. We will try to answer questions submitted that are germane to this meeting as time allows within the 30-minute meeting time limit. We will review all incoming questions, and appropriate questions will be read out loud during the Q&A portion of the meeting. Please submit your questions now to make sure they are received in a timely fashion for our review and response. I have a complete list of the holders of record of the company's Class A, B, C, and D common stock as of March 20th, 2026, the record date for this meeting. These lists have been available for the past 10 days at our headquarters for inspection by the stockholders of record.
I also have an affidavit of distribution certifying that commencing on or about March 31, 2026, Broadridge Financial Solutions, the company's mailing agent for this meeting, mailed a notice of Internet availability of proxy materials or a notice of this annual meeting, a proxy statement, and an annual report to each of the holders of record of the company's Class A, B, C, and D common stock as of the record date. A copy of the certified list of stockholders, notice of meeting, and affidavit of distribution will be included with the minutes of this meeting. At this time, I'd like to introduce Stephen Tollefson of Broadridge Financial Solutions. I have appointed Mr. Tollefson to act as Inspector of Election at this meeting. Mr. Tollefson has taken and subscribed the customary oath of office to execute his duties with strict impartiality.
We will file this oath with the records of the meeting. His function is to decide upon the qualification of voters, accept their votes, and when voting on all matters is complete, to tally the final votes. I have been informed by the Inspector of Election that proxies have been received for a majority of the voting power of the 164,783,414 shares of Class A, B, C, and D common stock outstanding on the record date. On the basis of the affidavit and the report of the Inspector of Election, I find that proper notice has been given and that a quorum is present. Accordingly, this meeting has been properly convened and is open for business. There are three proposals to be considered by the stockholders at this meeting.
Please note the polls will close after the proposals have been read. The first item of business is the election of nine directors to be elected by holders of Class A, B, C, and D common stock to serve until the 2027 annual meeting and until their successors are elected, or if sooner, until the director's death, resignation, or removal. In accordance with our bylaws, stockholders must provide advance notice of their intent to nominate candidates for directors. No stockholders submitted such notice. Therefore, I declare the nominations for directors closed. The nominees for director are Travis Boersma, Christine Barone, C. David Cone, Stephen Gillett, G.J. Hart, Kory Marchisotto, Scott Maw, Ann Miller, and Todd Penegor. The second item of business today is the ratification of the appointment of KPMG LLP as the company's independent registered public accounting firm for the year ending December thirty-first, 2026.
The third item of business today is the approval on a non-binding advisory basis of the compensation of our named executive officers as described in the proxy statement. The stockholders have been asked to vote on a non-binding advisory basis on the following resolution. Resolved that the compensation paid to the company's named executive officers, as disclosed pursuant to Item 402 of Regulation S-K, including the executive compensation discussion above compensation tables and narrative discussion, is hereby approved. It is approximately 2:18 P.M. Pacific Time on May 13, 2026, and the polls are now closed. The report of the inspection of election covering preliminary results of voting for the proposals presented at this meeting is as follows. Number one, the proposals to elect the nominees for director are carried.
The directors elected by the holders of Class A, B, C, and D common stock, voting together as a single class are Travis Boersma, Christine Barone, C. David Cone, Stephen Gillett, G.J. Hart, Kory Marchisotto, Scott Maw, Ann Miller, and Todd Penegor. Number two, the appointment of KPMG LLP as the company's independent registered public accounting firm for the year ending December 31, 2026, is ratified. Number three, the resolution concerning the non-binding advisory vote on the compensation of our named executive officers was approved. We expect to report our preliminary voting results, or if available to us on a timely basis, our final voting results on a current report form on Form 8-K to be filed with the SEC within four business days after the end of this meeting.
If the final voting results are not earlier reported, we expect to report our final results in an amendment to our Form 8-K within four business days after the final results are known to us. This concludes the formal portion of today's meeting, and the annual meeting is now adjourned. We did not receive any questions germane to the meeting. Thank you again for your attendance at today's meeting and your continued support of Dutch Bros.
The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.