(CNN) 鈥� A new coffee chain may be headed to a town near you, and it鈥檚 not Starbucks or Dunkin鈥�.
Many Americans likely haven鈥檛 heard of 7 Brew, which has only been around since 2017 when it opened its first location in Rogers, Arkansas. The chain has since grown to over 700 locations in 38 states, with about 340 more on the way, but can鈥檛 be found in airports, indoor shopping malls or busy street corners in major US cities. Instead, it operates through drive-thrus and walk-up windows in parts of the country with little-to-no coffee competition.
The growth of 7 Brew and other rapidly expanding beverage chains, including competitors like Dutch Bros and soda-focused Swig, shows that Americans are perhaps unwilling to give up quick treats during hard times.
Budget-conscious Americans have balked at rising fast food prices in recent years, leading to pullback at businesses like and . Meanwhile, 7 Brew has performed well in this economy: Sales jumped from $502 million in 2024 to nearly $1.2 billion last year.
鈥淐offee is perfectly an affordable luxury, because it offers that daily indulgence,鈥� said Sharaya Jones, a marketing professor at George Mason University. 鈥淪ome coffee shops are expensive, but usually it鈥檚 under $10 to have this really special moment.鈥�
Pricing and menu variety
7 Brew鈥檚 small non-dining spaces help limit operating costs, making up for smaller profit margins on drinks compared to chains like Starbucks.
Jones notes that coffee, particularly for younger consumers, is 鈥渁 category where consumers are increasingly price-sensitive鈥� being perceived as more affordable than Starbucks, or other local coffee shops, can help drive repeat visits and build loyalty quickly.鈥�
As 7 Brew expanded, it has also broadened its customizable drinks 鈥� it started out with seven drinks, hence the name 7 Brew. It now has more than 20,000 drink combinations. And 7 Brew doesn鈥檛 charge for most customizations, such as extra flavors, milk alternatives, whipped cream and drizzles.
When Charlese Mitchell ordered a blondie drink with caramel and funnel cake and her friend Sydney Richardson bought a coconut, strawberry and cupcake-flavored soda at a 7 Brew in Abingdon, Maryland, in April, the pair were taken aback. They paid $5 for each of their drinks 鈥� half what they expected.
鈥淔ive dollars is crazy,鈥� said Richardson.
7 Brew鈥檚 loyalty program may also be appealing due to how straightforward it is to earn a free drink, according to Robert Byrne, senior director of consumer research at food industry research firm Technomic. That鈥檚 great for Americans, who Byrne says want to spend at restaurants whenever they have extra cash.
鈥淲e need those treats, those little miniature food service serotonin hits,鈥� he said.
The chain also lures customers with free t-shirts and drinks at , and discounts for first responders.
At a Starbucks near San Antonio, a 24-ounce iced blonde vanilla latte costs about $6.55 when ordering through the app. A nearby Dunkin鈥� sold a medium iced latte for $5.49, while a nearby Dutch Bros charged $4.95, according to online ordering. At 7 Brew, a 24-ounce iced blondie 鈥� a vanilla and caramel breve mixture 鈥� can cost as little as $5.15, while a medium iced latte may cost as little as $4.75, according to the company.
Mayra Okechukwu, an influencer in Utah, told CNN she goes to 7 Brew about three times a week, and now prefers the drive-thru chain over Starbucks due to its lower prices.
鈥淲hen I had to pay (at 7 Brew), I was really surprised. I was like, 鈥極h, that鈥檚 way cheaper for such a good amount of coffee,鈥欌�� Okechukwu said. A standard medium iced latte at 7 Brew is the same size as the largest iced coffee at Starbucks stores.
Rapid competition growth
7 Brew鈥檚 drive-thru format largely borrows from established chains like Dutch Bros, which opened in 1992 as a pushcart in Oregon, and Scooter鈥檚 Coffee, which opened its first Nebraska kiosk in 1998.
Not only has 7 Brew replicated their small stand formats, it also sells muffin tops, similarly to Dutch Bros. And its energy drinks, soda, smoothies and other drinks can also be found at Dutch Bros and Scooter鈥檚, which each have more than 20 flavors.
Such chains are positioned as more convenient than stand-alone cafes and largely appeal to commuters and families going to and from school.
Those chains are still larger than 7 Brew: Dutch Bros has over 1,000 locations in 25 states and Scooter鈥檚 Coffee has over 850 locations.
7 Brew鈥檚 rapid expansion this year is largely made possible by Blackstone, which made a growth equity investment in the company in 2024, and Franchise Equity Partners, which acquired a majority stake in the chain鈥檚 second largest franchisee to open more than 200 new stands. The brand has also gone viral on social media.
But at the same time, franchises are 鈥渘ot going to be able to implement the changes that are necessary to keep up with trends, customer demands, keep the uniformity of the system,鈥� said to Nick Setyan, a Mizuho Group analyst.
A competitive industry
Traditional coffeehouses still have their appeal as sit-down cafes, potentially offering remote workspaces and room to socialize. That appeal of a 鈥渢hird space鈥� is a large part of why people buy coffee, Jones, the GMU professor, said.
Starbucks last year announced a plan to win back customers that focused on the brand鈥檚 coffeehouse culture. The leading coffee chain had reported weaker sales in recent years, in part due to increased competition and customers who were exhausted by high prices.
That new plan seems to be paying off. Comparable store sales in the US rose about 7% during the second quarter of this year.
It鈥檚 hard for 7 Brew to compete with coffeeshops that serve as 鈥渢hird spaces.鈥�
鈥�(7 Brew has) baristas who come up to your car, and it is interactive 鈥� but there鈥檚 just the loss of the experience, the atmosphere,鈥� Jones told CNN.
Still, Okechukwu, the Utah-based influencer, says she would occasionally skip Starbucks because of its long wait times, while 7 Brew is convenient for work commutes.
Customers are typically in and out of 7 Brew faster than other chains: time spent at 7 Brew stands averaged 8.7 minutes during the third quarter last year, according to Placer.ai. That鈥檚 less than the 10 minutes at Dutch Bros and the 13.8 minutes at Starbucks.
Jesslynne Mann, a 23-year-old graduate student and mother in Kentucky, told CNN that there are few other options for coffee in her town, aside from expensive locally owned specialty shops and Dunkin鈥�, which lacks consistent quality. A mom-and-pop shop typically charges about $9, she said.
Meanwhile, she racks up free drinks with 7 Brew鈥檚 loyalty program and often uses 7 Brew as a 鈥渄ate night鈥� with her partner. The couple take time to rate the orders in their notes app.
鈥淧eople enjoy being able to build memories around something, and it just breaks up a long stressful day,鈥� she said.
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