Fast Casual | May 2016 | By Sam Oches

The Secret to Sweetgreen’s Success

If sweetgreen is going to be the next great American brand, then Karen Kelley might be its secret weapon.
Hip salad fast casual chain restaurant has woman business leader at helm.
Karen Kelley has earned a reputation helping grow hip startup brands, and now she’s tasked with doing the same at booming fast casual sweetgreen. melissa barnes photography

Walk into a sweetgreen and you see the restaurant of the future. You see a brightly lit dining room with modern wood finishes. You see a beverage station with house-made juices, teas, and sodas. You see a chalk-scrawled menuboard boasting of seasonal and local ingredients like beets, lentils, and bok choy, and a wall lined with crates that are packed to the brim with fresh greens.

And you see Millennials. Lots and lots of Millennials, squeezing in a healthy lunch before they head back to work, thumbing away at their smartphones, bobbing their heads to the latest alternative pop song careening through the dining room.

It’s easy to see why investors and media alike are rushing to christen sweetgreen the next great fast casual to redefine American dining. With demand for fresh, premium food at an all-time high—and with a certain burrito slinger out of Denver licking its wounds after a food-borne illness nightmare—the stage is set for sweetgreen to capture that “it factor” that could help it expand from its 40 units in major foodie hubs and become a national favorite of the younger generations (and generations to come).

While the story of how sweetgreen got here is well known—Georgetown buddies Nicolas Jammet, Nathaniel Ru, and Jonathan Neman founded the farm-to-table brand in Washington, D.C., upon

graduation in 2007—the story of where it goes from here is unfolding in significant ways in 2016. The company is in the midst of positioning itself operationally and geographically to better serve its customers, both those already loyal to sweetgreen and those across the U.S. who hunger for a farm-fresh fast casual in their own neighborhood.

At the center of this positioning is Karen Kelley, the industry veteran and startup whisperer who joined sweetgreen as president and chief operating officer in late 2013 after successful stints with fro-yo concept Pinkberry and salon chain Drybar. Kelley has been tasked with helping Jammet, Ru, and Neman scale their vision for sweetgreen while protecting the brand values at its foundation.

“It has been like a rocket ship ride, I can tell you—and, let me just say, in a very positive way,” Kelley says of her time at sweetgreen. “I think that my goal when I came into this company was to honor the brand … and really ensure that we can figure out how to grow and protect the brand, the food ethos, the values—all the important elements that were built here by our three brilliant founders—and figure out how to do that while we’re growing, while we’re scaling, while we’re introducing multiple new members to the team.”

Challenging the status quo

Kelley, 50, already has three decades of business experience under her belt, many of those years spent in the quick-service restaurant industry.

The executive didn’t plan for a career in foodservice—she received a political science degree from the University of Colorado Boulder—but a college job at Taco Bell led to an area director role with that brand and later to various gigs with both Boston Market and Jamba Juice. At the latter brand, she climbed to the position of senior vice president of operations, which she held until 2008.

It was her two stints before sweetgreen, though, that paved the way for Kelley to become one of the most powerful people at one of the most exciting foodservice brands in the country. First was her three years as senior vice president of operations and people at Pinkberry, the Southern California chain that drew celebrity cred and positioned itself as a lifestyle brand in the golden age of frozen yogurt. Then, in an interesting twist, Kelley left foodservice to become the president of startup salon chain Drybar, where she helped the founders raise capital and grow the company from seven locations to more than 40.

“I think I’ve had the great pleasure in my career to work with many different founders with vision and purpose and passion that see the world a little differently and challenge the status quo,” she says. “That benefits me very greatly here.”

Indeed, in Jammet, Ru, and Neman, sweetgreen has three founders who are passionate about the values underscoring the brand and who are committed to connecting those values with the Millennial lifestyle—after all, they’re Millennials themselves. The company promotes healthy eating and lifestyles, as well as positive relationships with customers, communities, and vendors. The corporate offices are called “Treehouses”; the staff has regular meditation sessions; the whole company read chef Dan Barber’s book The Third Plate about farmers and the food system.

“I learned very early on that they wanted to build a different type of company,” Kelley says of the founders. “Every year, we set intentions both as a company and as individuals, and last year my intention was to bring energy to every interaction, to create that kind of mindset for the organization that we’re creating a different kind of company that is committed to a broader purpose.”

While Kelley brings a new perspective to sweetgreen as a veteran of three other foodservice brands, she also brings her leadership style that she says “focuses on capturing momentum, harnessing people’s capability, and challenging people to grow beyond what they see as their own potential.”

She adds that she spends her days developing and coaching people to grow into their leadership potential—a useful resource for a company that could grow to hundreds of locations, and especially one that has no plans to franchise.

“It challenges my creative thinking every day. You come into a company where you have all these experiences, and you have all these things you’ve learned before, but you have to kind of connect that with the brand you’re working on and the type of company and the type of vision and mission the company has here,” she says. “I would say it’s challenged my creativity in a very positive way. It has helped me become a better leader, a better innovator. And I think we’re seeing the results as a brand.”

Disrupting fast food

Kelley arrived at sweetgreen just as the murmurs of the brand being the heir apparent to fast-casual titans like Chipotle and Panera Bread turned into a cacophony.

Shortly after she joined the team, AOL cofounder Steve Case and his Revolution Growth firm invested $22 million toward sweetgreen’s growth. A rush of investors followed suit; by mid-2015, a group of investors (including Shake Shack founder Danny Meyer) had contributed nearly $100 million to the company, which had by then expanded into New York, Philadelphia, and Boston.

“With sweetgreen, there are really two, maybe three, big trends that were driving them,” Case told QSR last year when explaining his firm’s decision to back the company. “One was the whole fast-casual segment starting to disrupt the fast-food segment, which we thought would continue over the next 10–20 years. The second was a push for healthier options that some have called ‘real food.’ And the third is the convenience that’s made possible by technology, including smartphones.”

The investments helped sweetgreen develop its systems and spark new store growth. Last summer, the company took the leap across the country and opened its first West Coast locations in Los Angeles. Then, in February, it doubled down on its West Coast commitment when it announced it would relocate its corporate office to L.A.

The move is a major foot forward for sweetgreen as it seeks to become a national brand. The company moved 30 employees from its original D.C. headquarters to the West Coast, leaving a regional office in the nation’s capital and another office in New York. Kelley, who was one of the employees to relocate, says a single corporate headquarters didn’t make sense for sweetgreen because the company wants to remain “flexible and mobile from market to market.”

“We really feel like this is important to our future growth, as part of our success is that our people operate close to the field and where the consumer is, so decisions can be more fluid,” she says.

Now that sweetgreen has a presence on both coasts, the goal is to fill out all of the white space in between, Kelley says. That will start this year, when the fast casual opens its first Midwest location in Chicago. In addition, sweetgreen plans to beef up its Southern California footprint while also opening new locations in the Bay Area.

Overall, the company hopes to open around 20 new stores in 2016.

“What’s really important to us is to grow in the markets more in the middle of the country, where we can really establish the brand [and] create access to healthier options with food, and then our real estate strategy is to get pulled into markets after we penetrate a certain market,” Kelley says, noting that, for example, a presence in San Francisco could hypothetically help sweetgreen expand to Portland, Oregon, and Seattle.

Standing for something bigger

As a salad brand dishing bowls of fresh produce, sweetgreen inherently carries the mantle as a healthy-eating concept. But the company isn’t interested in letting its wholesome menu be all that represents what it considers to be a broader food ethos.

Kelley says the concept of being a “healthy” brand extends beyond serving nutritious food and into the ways in which sweetgreen can “be a catalyst to building healthier communities.” That includes educating customers and providing access to locally sourced foods.

“I think sweetgreen’s responsibility, first and foremost, is to be an incredibly transparent and authentic brand and to ensure that the consumer has as much information available to them as they can about the food they’re eating,” she says. “I also think our responsibility is to constantly look at what’s going on in the food space and make sure that we are evaluating our product.”

In this way, sweetgreen’s food ethos extends to its sourcing practices. The company is committed to local sourcing, obtaining as much as 70 percent of its ingredients at peak season from local food partners. Its partnerships with farmers across the country have become integral to its success, and as the company grows into new markets, Kelley says, the relationships with local farmers have become as important as the real estate decisions.

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