Guess where we're going?
Not that hard to guess.
Sweetgreen. Wooo!
Sweetgreen.
Worshipped by Millennials and Gen Z'ers
About to get me a Hollywood Bowl.
who dutifully wait in lines around the block for
their locally-grown, celebrity chef inspired,
premium priced salads.
Is salad a hot trendy growing category?
Absolutely not.
When you take one of those big, established
things that everybody already eats and you
elevate or you innovate around that category, it
can create growth in what is otherwise a pretty
flat marketplace.
Gwyneth Paltrow's company Goop and Martha Stewart
have endorsed the brand, and Selena Gomez,
Katharine McPhee, Kendall Jenner, Cory Booker and Malia Obama are all customers.
There's a big movement of people connecting more deeply with their food.
We were at the right place at the right time.
In the ever-competitive, fast-casual dining
category, Sweetgreen's become a unicorn, valued
at over $1 billion.
If I had told you 25 years ago when Starbucks only
had a few locations that someday it would be a
global phenomenon or Chipotle, nobody would
have believed that Starbucks would now be worth
$60 billion or Chipotle worth $16 billion.
But that's what's happened and so that's
what we feel with Sweetgreen.
So has Sweetgreen found the new sweet spot in America's palate?
And will it become the next big thing?
Sweetgreen was started 11 years ago by three
seniors at Georgetown University who met in an
entrepreneurship class.
We were sick of eating at the same places.
None of them made us feel that good.
The most delicious food, the coolest food was all the least healthy.
And we wanted to solve that problem.
Live the sweet life with us, you know?
The one thing they all had in common: They were
the children of immigrant entrepreneurs, and like
their parents, they wanted to run their own businesses.
The very first menu we actually made in my
co-founder Nick's dorm room.
And we even had these little anonymous
surveys people could fill out.
The group raised $300,000 from 50 investors,
mainly family and friends.
And in 2007, three months after graduating, they
opened the first Sweetgreen.
It was a 560-square-foot shack near the
Georgetown University campus.
And the team had to install everything from scratch.
It had no plumbing.
It had no electricity.
We really had no idea what we were doing.
But people kept coming back.
Within a year and a half, Sweetgreen opened two
more locations in D.C. and Maryland.
By the time they made it to New York with store
number 20 in 2013, they had raised over $35 million.
We think there is a real chance to build
Sweetgreen into a national brand and maybe someday a global brand.
And that's exactly what started happening.
Core to Sweetgreen's business model has always been its direct relationship with farmers.
The first thing we do when we do come to a new
city is connect with the local farmers and
producers and build that supply chain.
So every city has its own set of different farmers, producers and growers.
It's no easy task and was a risky goal for such a large scale.
Many but not all are organic.
Consumer packaging is compostable and foods like steelhead, while less known, are offered in lieu
of less sustainable ones, like salmon.
The menu changes seasonally and varies slightly by region.
Sweetgreen has been criticized for its prices,
and for attracting a less-than-diverse crowd.
The company says prices have gone up over the
years to increase wages and benefits for its employees.
So I think I'm gonna go get some Sweetgreen for
dinner because I'm on my own for dinner.
In yesterday-land, consumers might have wanted a
Rolex watch or some other badge product.
Now food is a new badge product, the new rage if you will.
It used to be generations spent a fair amount of
money on apparel and that was sort of a badge.
And today food is a badge.
For six years, Sweetgreen put on an annual music
festival called The Sweet Life Festival with a lineup that included Kendrick Lamar, Solange, The Weekend and Haim.
But the company called it quits in 2017 due in
part to festival fatigue and declining customer
numbers. Sweetgreen also teamed up with Kendrick
Lamar on a shirt and salad in honor of his song.
(B**** don't kill my vibe, b*** don't kill my vibe.)
The company collaborates with celebrity chefs
including David Chang, Nancy Silverton, Mark Bittman and Dan Barber to develop new menu items.
The key to attracting and maintaining a customer
base is a combination of consistency and spontaneity.
Consistency means I deliver an
exceptional product, and I do it again and again and again.
Spontaneity means I'm changing things up.
The challenge for brands is making the
spontaneity mixed up somewhat so that it's not predictable.
Otherwise the high user, the one
who is highly frequent gets bored with it.
Sweetgreen now has 91 restaurants in eight states,
in addition to a corporate delivery program
called Outpost, currently at 25 WeWorks and 75 other companies.
In November 2018, Sweetgreen became the first ever restaurant unicorn.
The $1 billion valuation.
After receiving a $200 million seed H financing round led by Fidelity Investments.
Other investors include restaurateurs Danny Meyer
and Daniel Boulud, former Whole Foods CEO Walter
Robb and former AOL executive Steve Case and Ted Leonsis.
The total equity raised now is $365 million.
The company says it plans to eventually go beyond
just salads and bowls and plans to add more
cities and locations to its roster.
The key will be can they make that supply chain
transparency story work in the U.S.
and internationally without growing so quick that
they outrun the supply chain.
Today over 50% of Sweetgreen's business happens digitally.
You know the things that we do see creating growth
is the fast-casual space in general, you know,
digital ordering, delivery as more and more
consumers actually want to consume the food at home.
The company plans to go further with blockchain.
By leveraging blockchain, we will know at any
given moment exactly where our food came from,
when it was picked and when it got to us.
And not only will we know, we'll be able to
surface that information to our customers.
This technology, which is set to grow rapidly in
the agriculture sector over the next five years,
could help prevent outbreaks like the romaine
lettuce E. coli outbreak in California in 2018.
Tonight the head of the FDA says the romaine
lettuce responsible for that outbreak that has
sickened dozens of people likely started in California.
Sweetgreen is now cashless nationwide.
The company made the switch in 2017 for both efficiency and robbery prevention.
But the concept of cashless stores has sparked
debate and even been banned in some states.
The company also hopes that technology will give
consumers a more personalized experience.
Over time as we start to get to know you and
you're able to share information, whether that be
your 23andMe or other sort of microbiome data
with us, we're able to then curate menus based off of your preferences.
Time will tell whether this technology will put
Sweetgreen ahead of the pack or whether that's
even what consumers want or need.
While other things will change like our
restaurants, the way in which we serve food, our
mission will never change. As
we get bigger, the opportunity also gets bigger,
and we're just getting started.