Sweetgreen: Live the Sweetlife

Sweetgreen: a Winner

Despite its young owners, Sweetgreen has developed a strong alignment between its operating and business models [1]. Started in 2007 by three Georgetown college graduates, Sweetgreen is a fast-casual restaurant that serves farm-to-table salads and wraps [1, 2]. In 2014, Sweetgreen operated 31 stores with revenues of $50 million [3]. In 2015, it opened 10 new restaurants and drove 50% growth in revenues [3]. While innovation leaders accused salad bars of being “passe” [3], Sweetgreen developed a lifestyle brand beyond its basic food business. It cultivated mass “cool” appeal through its focus on convenience, health, and sustainability, each deeply evident in its stores, ingredients, and marketing [4]. 

Business Model

Sweetgreen seeks to address the gap between fast, convenient restaurants and healthy food options [5]. It partners with local farms to provide every ingredient offered in its salads and wraps [3]. Consumers can stand in a fast-moving line to order customized or signature salads or pre-order online or the Sweetgreen app [3]. Instead of traditional sodas, customers can only select from bottled water, teas, and juices as well as house-made teas and lemonades [4]. Sweetgreen’s focus on health is deeply linked to sustainability, which is echoed throughout the whole store. All utensils, bowls, napkins, and cups are compostable [1, 5]; the stores’ tables and chairs are all made from local, reclaimed wood [1]; and even storefronts are designed to match the look and feel of each neighborhood [4].

Sweetgreen is more than a traditional food option; it embodies a lifestyle that appeals to its educated, health-conscience and social customer-base [4]. As such, it does no traditional marketing and focuses on offering great customer experiences [4]. This encompasses store experience, but also through its close association with well-known chefs and music artists [1]. It lures customers to new stores by blasting music outside [4]; its motto of “Beets don’t kale my vibe” is inspired by the rapper Kendrick Lamar; and it attracts new customers at its annual music festival, Sweetlife [1]. 

Operating Model:

  1. Structure: Product and Community
    1. Sweetgreen owns and operates each of its stores with no plans to franchise. It believes that its core asset is its partnerships with farms, which would be complicated under franchising agreements [4]. As mentioned above, its product is fresh, organic, local vegetables and humanely-raised livestock as well as healthy drink options. It creates a community through its non-traditional marketing campaigns, which is largely grown through word of mouth and its annual Sweetlife Festival [4]. Concert-goers get healthy meals while learning about energy, composting, and other sustainability issues [4].
  2. Processes: Service and Innovation
    1. Because of its mission to provide great customer experience and convenience, Sweetgreen has committed to keeping at the forefront of technology. It was one of the first to partner with LevelUp, a mobile payment app [4]. It also has its own app, which accounts for 25% of the orders, that allows customers to skip the line and pick up their order at an appointed time [4]. In addition, it aggressively searches for locations that provide convenience for customers, particularly during the lunchtime [4].
  3. Assets & Capabilities: HR and People
    1. Similarly, Sweetgreen carries out its mission of great customer experience through a rigorous hiring process. Frontline employees are the face of the brand and interact the most with customers, so Sweetgreen seeks out passionate, energetic people who embody the brand. To retain these employees, Sweetgreen provides clear career path growth. Additionally, it offers employee perks in keeping with the brand’s support for a balanced and healthy lifestyle [2].
Alignment and Future Success
The business and operating models align and support each other in every vertical. The focus on the health-conscience consumer is reflected in Sweetgreen’s decision to source ingredients from local farmers. This focus permeates every aspect of Sweetgreen’s business. Its menu has some signature items but changes seasonally as the weather shifts in the NE and California, where its stores are located [1, 3]. Stores also prominently display chalkboards to identify the farms that have sourced the store’s ingredients that day [1]. All ingredients are displayed in front of the consumer to visually verify the quality, while efficient assembly lines and technology quickly process approximately 160,000 salads annually [3] as a result of long lines that flow outside the store and down the block [1]. While these tech options keep Sweetgreen “cool,” they more importantly accomplish Sweetgreen’s mission to be easy and accessible to customers [1].
Sweetgreen creates and sustains competitive advantage through its mission: it isn’t just a food option, but rather a healthy lifestyle. The vibe of the company resonates with customers who want to leave a gentle footprint. Signage around the store identifies the Sweetgreen mission and values that focus on balance, sustainability, and impact. In addition, a percent of each order is donated to FoodCorps, a nonprofit that brings healthy meals to underprivileged kids [1].
As a result of its alignment success, Sweetgreen is positioned to maintain its strong competitive position and rapid growth rate as it moves into new markets.

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11 thoughts on “Sweetgreen: Live the Sweetlife

  1. I loved reading about how the business not only promotes healthy eating, but also treats its employees and suppliers well. I also think the fact that customers are okay with the menu changing seasonally will help keep costs low in the future and lessens the impact on the environment. My only questions center around the depth of their supplier base – as other companies are shifting to this model and big retailers follow the “localization” trend, will they struggle to retain these farmers at current prices? Will this supply get tight and prices go up, hurting their operating model?

  2. I went to Sweet Greens yesterday and was shocked at how packed it was at 2 PM. While waiting in line and making the requisite TOM jokes, it did occur to me that cycle time creating a salad was less than 5 minutes!

    Given the efficiency of the salad assembly process, how could Sweet Greens shorten the wait time?

    I think the reducing the product mix (number of salads to choose from) and eliminating custom salads.

  3. I’m a big Sweetgreen fan as well – I used to live near the one on Boylston and went all the time. One thing that has surprised me about their operations, is how slowly they have expanded. As Ally mentioned above, it’s almost always packed, regardless of the time of day, and yet until recently there were only 2 locations in Boston (apparently they just opened a third location in the Pru). Given the demand, I’m surprised they haven’t added more stores sooner – perhaps they are deliberately expanding slowly, given sourcing from local farms?

  4. It strikes me that consistency and quality are two of the reasons that customers return again and again to their favorite food chains. I lived in Manhattan for a number years, and nearly every single day I purchased lunch at one of the many fast-casual restaurant chains: Pret a Manger, Hale & Hearty, Fresh & Co., etc. At Chopt and Just Salad, two popular salad chains, my experience of the food varied nearly every time and eventually, I stopped eating there. As Sweetgreen expands, how does management ensure the highest quality standards at every location? Aside from hiring enthusiastic and committed employees, what types of quality control checks could they implement?

  5. Agree with the above – love Sweetgreens, which they could expand faster. I know they recently raised a large round with the plans to fund an expansion.

    I wonder how quickly scalable their model is given that they have to build up their supplier network from scratch in each new market they enter. Not that its a bad thing they can’t scale quickly, they have clearly demonstrated demand. It may make more sense for them to saturate markets such as Boston with as many locations as possible so they can leverage already established suppliers.

  6. Nice post, Brian! Along the lines of Claire’s comment, I’m wondering what the investment community thinks of models like Sweetgreen’s. There seems to be tension between delivering on the promise of the founders’ vision and scaling the business. What can Sweetgreen do to expand more quickly while not losing much of their quality/brand?

  7. Great post! Given that a big part of sweetgreen’s ability to source fresh ingredients is its partnership with farms, do you think this stunts its growth at all? Is there a point where it can’t necessarily add more stores due to lack of proximity to suppliers

  8. Fascinating post! I’ve only eaten at sweetgreen a few times, but always really enjoyed the food and experience.

    I really admire the way they partner with local farms to bring the freshest ingredients to their customers, but after learning more about supply chain dynamics in TOM I really wonder how they manage theirs. How do they ensure they have enough supply to cover each days demand? And how do they manage shortages? I could imagine that could be very problematic if it’s one of their staples, like lettuce or tomatoes.

    I also wonder how they select and imagine their suppliers – I imagine it takes quite a bit more work than placing an order from Sysco. Do you think those costs get passed along to consumers?

    As mentioned in several previous comments it will also be interesting to see how they scale this model!

  9. I think Sweetgreen does a great job of managing the balance between healthy, inexpensive, and tasty in food. I could see this success leading to long lines as a customer pain point. The app is definitely a step in the right direction, but I wonder how many customer still view a long line as a deterrent.

    Additionally, while they seem to be executing well, the business seems to have few competitive barriers. Could other similar firms also easily compete in this space and winnow away profits?

  10. Great post, Brian! I went to Sweetgreen this Saturday for the first time, and had a great experience.
    It seems like the speed of their growth is a key discussion topic on this post. I am curious to learn that they think franchising would make them have less control over the company’s core values and business model. I have worked with a few franchise-model companies and have learned that if the model is well designed, the franchisor can have a lot of control on how the franchisees manage the business and its operations. I wonder how Sweetgreen would do if they explored growing through franchises.
    Do you see any other challenge for the company if they decide to start adopting a franchise model?

  11. Nice post Brian. Never been to Sweetgreen, but I’ll definitely check it out after reading this. My question is how differentiated they are from other salad places (e.g. Chop’d). I’ve seen quite a few of these chains (even though I don’t remember all of their names), and I wonder what makes Sweetgreen stand out when compared to its competitors? Is the market just so big that competition isn’t really a big problem yet (demand much greater than supply?) or is Sweetgreen renowned as a leader among other chains and steals their business?

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