Narrator: This is what most people consider a salad.
It costs about $1 to make, and it's not very exciting.
But this is a salad from Sweetgreen.
It's packed full of ingredients
and it costs a whopping $12.50.
If you buy this every week...
Claire Banderas: My 365-day total is $613.
Narrator: So, how did we get from here to there?
In the past two decades, salad has gone from a side dish
to something you brag about on Instagram.
And the biggest player, Sweetgreen,
is valued at $1.6 billion.
That's a lot of salad.
Its popularity means more people might be making the choice
to eat healthier. But at an average of over $10 per meal,
the healthy revolution could be leaving millions
of Americans behind.
Let's talk salad history.
Salad has actually had a ton of different phases,
from Jell-O salads to salad bars
and of course, the classic Caesar salad.
The idea of salad began to take off
in the early 20th century. But salad was often associated
with refinement and wealth because you needed
to own a fridge to chill your Jell-O salad.
Salads of that era included things like lime cheese salad,
Perfection salad, and an egg cream cheese salad.
But a couple of decades later,
salad had gained a pretty bad reputation.
Seinfeld Clip: Jerry, I'm thrilled you like my mutton.
I was afraid you only ate salad.
Jerry Seinfeld: Hey, salad's got nothing on this mutton.
Narrator: For a long time,
it was only thought of as diet food.
Archive Clip: Those who are reducing learn
to include many vegetables and fruits in their diet.
Narrator: Salad at that time just wasn't a full meal.
One of the first salad-focused restaurants actually opened
back in 1986, over 20 years before Sweetgreen.
In an interview with the Atlantic, CEO Paul Steck said:
"We didn't have a single competitor that we could identify
in the country, and now I could probably identify 50."
Hans Taparia: For the longest time,
salads were simply boring.
Greens are central to our diets,
and yet we haven't been consuming very much of it.
Narrator: But in the early 2000s,
the way that people thought about food started to change.
Adult obesity rates had nearly doubled in just two decades.
And in 1997 obesity was declared an epidemic.
One contributor to a poor diet is consuming a lot
of food away from home where the most convenient options
are often the least nutritious.
As consumers became more health-conscious,
salad chains offered a healthy food option away from home.
In 2001, Chopt the self-titled "Creative Salad Company",
opened its first location in New York City.
Chopt prioritized high-quality ingredients at a time
when consumers were seeking out more nutritious options.
It wasn't the first to experiment with salad,
but since then, many companies have followed
the customized salad production model.
Like Just Salad in 2006 and Sweetgreen in 2007.
Taparia: The big change has been
around the types of ingredients
and the flavors we're using in salads.
Falafel, and tofu, and lentils. Plus a combination
of interesting flavors, and that's made it possible
for a salad to become a complete meal.
Narrator: All of these innovations fought back
against the boring salad label, and they appealed
to career-focused millennials who wanted a quick,
healthy lunch. By offering mobile orders and the ability
to have salad delivered right inside your office.
In fact, Sweetgreen has almost 700 of these pickup outposts.
But it's not just salad chain versus burger joint.
Salad chains differentiated themselves
from other fast-casual restaurants
by focusing on fresh ingredients.
Taparia: Fresh is key.
Narrator: There's also a focus
on local and seasonal ingredients.
Fresh & Co and Dig Inn, for example,
both bought a farm to source ingredients.
Sweetgreen works with over 300 farms.
These chains pride themselves on transparency
and want customers to know where their ingredients come
from. Putting everything on display right
in front of the customer.
No more mystery meat.
Many of these chains have also adopted a Chipotle-like
production model. Giving customers the option
to customize their order exactly the way they want.
Taparia: That innovation is what's driving this growth.
Narrator: And it's paid off in a big way.
Taparia: Walk through midtown Manhattan, throw a stone,
and chances are you'll hit a salad chain.
Narrator: Sweetgreen now has over 100 locations
and over 1.5 million app users.
In an interview with Recode,
Sweetgreen cofounder Jonathan Neman said:
"We see us as the McDonald's of our generation."
But it's not just Sweetgreen.
Other chains are growing too.
Chopt now has 65 locations and Just Salad has over 40.
But they're not just successful businesses.
A huge affinity has grown around these brands.
Even thought fast-food chains have tried offering
"healthy" options for a while, they're still associated
with an unhealthy brand.
In 2013, McDonald's told investors
that salad made up only 2% to 3% of sales in the US.
Taparia: Brands like McDonald's and Burger King
are having great difficulty being credible
with healthy food.
Narrator: Sweetgreen isn't just a restaurant.
It's associated with a trendy lifestyle.
Taparia: And they pulled a marketing chapter out
of brands like Warby Parker or Lululemon
to create impact brands that are aspirational.
They've turned them into lifestyle brands
and very hip lifestyle brands.
Narrator: Even its bags are trendy.
But it's not a lifestyle that's accessible to everyone.
In New York City, the cheapest salad
at Sweetgreen cost over $11.
Lisa Paradise: My typical order at Sweetgreen costs
probably $14 to $17.
Grant Tyler: Around $14.50.
Irene Kim: $18 to $20.
Paradise: I'm apologizing to my wallet.
Narrator: But it's not just Sweetgreen.
The average price at Chopt and Just Salad is over $10
which makes fast food way more affordable
than any of these salads.
These chains are also usually located
in higher-income neighborhoods
and areas with a lot of office workers.
Like in Manhattan, most are concentrated in midtown
and lower Manhattan. Where several neighborhoods
have a median income of over $100,000.
Sam Polk: Healthy food has also become a luxury product
that only a few can afford.
Narrator: That's Sam Polk.
He started a salad chain called Everytable.
Instead of having one price for its food,
Everytable sets its prices based
on the area it's selling in.
Polk: Our meals cost $7 to $8 and some communities
in locations like Compton and Watts and South LA,
which are communities that have basically been left out
of a functioning food system, we'll sell the same meals
for $5 or $6.
Narrator: Which is a lot closer to fast food prices.
Everytable is able to offer these lower prices
by premaking its meals in centralized kitchens instead
of assembling them at each Everytable location.
It hopes that by providing nutritious food
in previously underserved areas,
it can help with the problem of food deserts.
But Sam doesn't vilify his competitors.
Polk: A lot of that is unfair on some level.
It's not like Sweetgreen is selling a salad for $15
and they're making it for four
and they're just taking all this profit.
Sweetgreen's restaurants are very complicated,
and very expensive, and there's a ton of people in them.
So when they're selling a salad for $15,
it's basically costing them $12 to make it
and they're making their little spread on it.
Taparia: In the case of chains like Sweetgreen and Chopt,
they are opening in very high-income neighborhoods.
They have very high rent costs, they're very labor-intensive
and they have high build-out costs.
That's one of the big drivers behind their high price point.
Narrator: We reached out to Sweetgreen about its prices,
but it hasn't returned Insider's request for comment.
But price is a huge deciding factor when buying food.
A $12 salad simply isn't an option for a lot of people.
Just like its predecessor, a bowl from Sweetgreen
is often associated with wealth or disposable income.
One study found that between 1999 and 2012,
diets had improved more for wealthy Americans
than those with lower incomes.
As more brands try to follow Sweetgreen's success,
this problem could get worse.
But Sweetgreen is still only a fraction of the size
of McDonald's, Starbucks, or even Chipotle.
Right now, there are a lot of competing salad chains.
Over time, smaller brands might have a harder time
standing out. And some analysts think
that all these chains will likely face challenges
when expanding outside of cities.
The salad trend is likely to keep growing, and ultimately,
that's a good thing if it means more people
are choosing vegetables over fast food.
But if Sweetgreen really wants to be the next McDonald's,
it's going to have to make its food a lot more accessible.