Sweetgreen: the “food platform”

Sweetgreen
04 Jan 2019

Founded in 2007, Sweetgreen is an American chain of fast-casual restaurants that employs about 3,500 people and has ninety stores nationwide. It works with celebrity-chef recipe collaborators and has amassed a cult following among health-conscious millennials.

“We want to go beyond a food company and become a platform,” CEO Jonathan Neman explained to Forbes in an interview. The company has just raised $200 million in a round of funding and is now valued at around $1 billion.

The business model

Sweetgreen came to the industry’s attention because of its bold stance on digital disintermediation, and its direct consumer relationship is the secret to the brand’s success. A full vertically integrated food system, from supply chain to production, content creation and ordering.

“We establish relationships with the farmers and we actually build our menus based off of the supply,” Neman continued. “And that means our food will be different in different parts of the country, and different parts of the world eventually, and will be different at different times of the year.” With a special focus on food ethics, which has become a real hallmark of the new consumer trends.

Each of its locations puts a focus on localising dishes to ensure customisability and transparency. This means that its supply contracts for food are not with distributors but with growers directly so although there are national products available at Sweetgreen locations the menus change from city to city.

Diversification

Sweetgreen aims to double their store count over the next three years and wants to replace McDonald’s as the national iconic food brand. To achieve this they will also diversify the types of stores and kitchens they build. Neman says some might actually be ghost kitchens that are dedicated to pickup and delivery orders placed on the app, while others will look more like a traditional restaurant.

Technology

Noah Wintroub, a vice chairman at J.P. Morgan, which served as the placement agent on the fundraise, says that the value of Sweetgreen’s expanding its digital platforms cannot be understated. About half of the orders Sweetgreen fills per day are made via smartphone and the online ordering revenue has grown by 50% on 2017. More than a million people have downloaded its mobile app.

In addition to incorporating the best eCommerce trends, Sweetgreen is taking a decisive approach to backend infrastructure. Starting in January, it will adopt blockchain technology to improve the visibility and traceability of the supply chain, which also helps to avoid cases of food poisoning, like the outbreak which recently occurred.