John Ballard, The Motley Fool

Sat, May 17, 2025, 8:33 AM4 min read

• Dutch Bros stock soared over the past year, but the company is just getting started on expanding its locations around the U.S.

• On's CloudTec cushioning technology has made it one of the most popular footwear brands, with sales surging 43% year-over-year last quarter.

• 10 stocks we like better than Dutch Bros ›

Identifying up-and-coming brands can be a profitable investment strategy. There are promising new businesses starting to gain the attention on Wall Street in the restaurant and athletic wear industries.

Dutch Bros (NYSE: BROS) and On Holding (NYSE: ONON) are reporting tremendous demand for their products, and it's reflected in their share price performance, as both stocks roughly doubled in value over the past year.

Here's why these stocks are poised to deliver monster returns for investors over the long term.

Dutch Bros' unique brand focusing on specialty beverages and friendly service is driving incredible growth. Finding new restaurant brands early in their growth journey can make rewarding stocks to hold for the long term, and this one is very promising.

Revenue has consistently grown around 30% year-over-year over the last few years. This is driven by a combination of single-digit same-shop sales growth at existing locations, with the balance driven by new Dutch Bros shops. It reported a 29% year-over-year revenue increase in the most recent quarter, and management plans to maintain a steady pace of expansion, with 160 new shop openings planned for 2025.

One thing that makes Dutch Bros an attractive investment is that the business has only just gotten started in tapping into opportunities to drive sales at existing locations. It is having success introducing new flavors to its coffee and energy-focused menu, with recent creations like cereal-flavored lattes and brownie batter mochas.

Management credited its new flavors for strengthening its brand and driving outstanding financial results in the quarter. There's an infinite number of ways it can flavor and mix up its beverage menu to drive demand over the long term. This doesn't even count its food testing at some locations to potentially expand the menu into new sales opportunities.

Dutch Bros just opened shop No. 1,000 in Orlando, Florida. It aims to have 2,029 shops open by 2,029. It should be able to expand to several thousand over the next decade and fuel multibagger returns for investors.

Discovering Nike stock in the 1980s would have delivered wealth-building returns. On Holding might give investors another chance. This up-and-coming footwear brand is growing sales at high rates and already achieving a higher profit margin than Nike.