It’s hard to figure out how to run a successful restaurant in this era of rapidly changing technology and evolving consumer habits, but Jonathan Neman seems to have cracked the code.
As CEO of Sweetgreen — the fast-casual salad chain that he founded in 2007 with his partners and former Georgetown University classmates Nicolas Jammet and Nathaniel Ru — Neman has led the fast-casual salad brand’s growth to around 100 locations, plus about 600 “Outposts,” or drop-off zones in corporate headquarters and other large office buildings where customers can pick up orders that they placed digitally.
The restaurants serve a familiar mix of seasonal salads, grain bowls and healthful beverages in a fast-casual setting, but to classify Sweetgreen simply as another healthful chain belies its larger mission.
“We’re building a new type of food company to challenge how we think about real food and elevate the customer experience,” Neman said last fall.
For Sweetgreen that means heavily incorporating digital technology and logistics to streamline the customer experience and make the brand more accessible to the community.
For a glimpse of where the company is headed, look no further than the new “3.0” prototype store that opened last October in New York City — an attempt at a more frictionless experience. The restaurant ditches the assembly line for a reimagined, fully digital service model. Customers order via app or on in-store tablets. While they wait, they can sample new menu items, and shop a small market featuring produce, sauces and cookbooks. Once their names appear on a display screen, guests can pick up their meals, which are prepared in a kitchen out of view, from a designated shelving unit.
Sweetgreen has also been aggressively expanding its Outpost program. These drop-off zones — shelving units in office building common spaces where customers can retrieve their orders — streamline delivery service, as one trip can serve multiple customers. Outpost pick-up areas are in the offices of such companies as Vice, Refinery29, Nike and Headspace.
These models have helped drive digital sales and engagement for the brand. More than 50% of the brand’s sales come through digital channels. And as of last October, its app had more than 1 million users, a 70% increase year over year, the company said.
Sweetgreen further enhanced its digital infrastructure last summer with the purchase of Galley Foods, a Washington, D.C.-based meal delivery service.
“We’re like-minded in our mission and in our commitment to our customers to better understand them and meet them wherever they are,” Neman said of Galley when the deal was announced.
Since its founding in 2007, the brand has been growing fast and constantly adapting to the changing business conditions. In that time, it has attracted some significant investments, most notably, a $200 million infusion from AOL co-founder Steve Case’s venture capital firm in 2013.
Most recently, it received a $150 million investment round last fall, co-led by Lone Pine Capital and D1 Capital Partners, to invest further in technology.
The latest funding round values the brand at $1.6 billion.
Looking ahead, watch for Sweetgreen to continue dramatically expanding its reach in pursuit of its ambitious mission.
“We can’t stop now,” Neman told The New York Times this month. “Because this doesn’t work at 100 restaurants. The next stop is 1,000.”
Contact Bret Thorn at [email protected]
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