SINCE 1988

How Sweetgreen Turned Itself into a Restaurant that’s Known for Food Quality Instead of a Technology Startup that Happens to Sell Food

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It wasn’t long ago that fast-casual restaurant chain Sweetgreen was perceived to be tech-first and food second. The Los Angeles-based chain was famous for its extensive technology usage, and its food naturally came second in people’s minds.

“We’ve always acted more like a tech company than a food one,” Sweetgreen’s team wrote in a Medium post in 2016. At the time, the company had an in-house technology team.

As much as the brand wanted to be known for its flashy tech, it also cared deeply about the food, something that was often lost in the shine of the technologically-advanced brand that Sweetgreen was.

“We’ve always been enthusiastic about innovation, but we’ve been cautious about introducing technology [that] might undermine the in-store Sweetgreen experience that’s so core to our brand: the music, the art, the food, the people-watching, the team,” the Medium post continued.

Things shifted during the pandemic, for the entire industry.

Soon, every company had to rely heavily on technology, and, to Sweetgreen’s benefit, the tools were already in place for success at the chain.

In 2021, while the pandemic was still in full swing, Sweetgreen acquired Spyce, a robotics automation company. That led to the creation of the chain’s automated Infinite Kitchen units.

During the company’s Q1 2024 earnings call in May, executives said that the two Infinite Kitchens saw a 10% increase in average checks and a 7% margin improvement.

Although Sweetgreen is still a leader in technology and automated makelines in the restaurant industry, the brand is not considered tech-first as it once was.

As consumers’ tastes have changed and Gen Z (people born between 1997 and 2013) has become the generation with the most spending power, brands like Sweetgreen have emerged from the pack for health-focused menus and innovative flavors.

“I think technology needs to start to flow into the background and just make a really good seamless experience where our food can really shine,” said Michael Kotick, VP, head of marketing at Sweetgreen. “Food has always been the backbone of who we are and why we get up every day.”

There has been a flurry of menu moves from Sweetgreen over the past year culminating in the introduction of steak, which was officially launched nationwide in May after a successful test in Boston.

Approximately 75% of Sweetgreen customers were interested specifically in protein variety, said Kotick.

But there’s also the price piece.

The gamble with a protein like steak during these economic times where customers are looking for value around every corner is high. Sweetgreen, however, feels like customers think the product is worth the price.

Kotick said that it’s not just that the protein is a higher-level protein than most other fast-casual chains offer, but the way the meat is both treated and seasoned gives the Sweetgreen customer more value than they’d get elsewhere.

“This is sourced differently and sourced to a different quality standard than I think a lot of the rest of the industry, and that is really part of our selling proposition,” he said. “Guests are now coming in saying, ‘I can get grass-fed steak that is crafted with delicious flavor profiles that is tender and served with a hearty portion.’”

This value proposition was put into action during the test in Boston. Despite the higher price, customers chose the caramelized garlic steak as a protein option every one in five transactions.

It should be noted that Sweetgreen started in Washington D.C. and first spread to other urban areas where the median income is above the country average. As it spread to suburbs, that’s remained true.

“I think that we are part of our focus, as we look at the evolution of our menu, starts with people and starts with occasions,” Kotick said. “If you’re a New York City guest you have a very, very different use case for Sweetgreen then perhaps someone in suburban Texas.”

The focus on food sourcing at Sweetgreen, while not new, is more prevalent in the chain’s marketing than ever before.

“Right now, when people are looking at that value through two dimensions, whether it’s price or meaning or brand equity, I think how we source — how we prepare and how we kind of serve things fresh — is an honest differentiator,” said Kotick.

That was bolstered by the introduction of “plates” in 2020, and that platform’s expansion in 2023.

These dishes, which are heartier and served on a flat surface, were meant to increase the dinner occasion for Sweetgreen’s customers.

Kotick said that the steak has been a popular option for the occasion as well.

Now that the chain has another protein and a new lucrative daypart, the focus is on adding more options for customers.

“I think variety overall is something that really brings people in at higher frequency,” he said.

Kotick noted that customers often “eat their way through the menu” rather than having a go-to meal as they have at competitors.

 

Original Article:
[H/T] RestaurantBusinessOnline.com