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    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.

    melissa barnes photography
    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.

    On top of this, sweetgreen changes its seasonal menu five times a year so that it can ensure a fresh, sustainable lineup. Kelley says sweetgreen is going against the fast-casual grain in this way, noting that other fast casuals have standardized their sourcing practices. “We are about regionality, seasonality, authentic relationships with our farmers,” she says. “So when we talk about being a different kind of company, I would really point first to our food ethos and how we lead the brand [toward] that food ethos.”

    Recently, questions have been raised about how successful a chain can be serving fresh, locally sourced foods. Chipotle’s E. coli scare, in which hundreds of customers across the country became sick from contaminated food (the origination of which is still unknown), have led many to claim that scaling local sourcing practices—in which companies are forced to manage not just a handful of supply chain relationships but rather dozens if not hundreds—could be impossible.

    But Kelley doesn’t buy into those claims. She says sweetgreen can continue to reject sourcing standardization so long as it maintains solid quality assurance (QA) practices across the system.

    “I think the discipline is around execution, training at the store level, and brilliant QA practices, meaning ensuring that from the farm through the distributor through to our stores, there are implemented and evolving quality control check points that ensure that the right QA practices are in place,” she says. She adds that sweetgreen’s culinary director, Michael Stebner, works closely with stores not just on new menu launches, but also on food-safety and kitchen practices to eliminate any potential risks.

    Of course, healthy and locally sourced foods have become incredibly popular with Millennials, the important generation of younger consumers that sweetgreen is banking much of its future on. But Kelley says sweetgreen’s food ethos isn’t something that connects with customers at the demographic level; it’s something that connects instead at the psychographic level.

    “We describe our customer as a conscious achiever,” she says. “It’s really about … individuals that are about making better choices for themselves and making better choices that are about their lifestyle.”

    Creating value in the community

    While moving into the Midwest for the first time and splitting the brand’s leadership team into a more bicoastal model are both major strategies for 2016, one of sweetgreen’s most significant moves this year had nothing to do with growth and geography, but rather operations.

    In January, the fast casual rolled out its new and improved smartphone app, which allows customers to order on the go and then pick up at a specially designated station in the store. The app also serves as sweetgreen’s loyalty program, providing rewards for devoted fans (earn $9 off for every $99 spent) and even lets guests order an Uber to take them to their nearest location. The company believes it could soon see a day when more than 50 percent of sales are conducted through the app.

    Kelley says it’s important for brands to understand their consumers’ needs and their needs for the future, then innovate and execute against those things in order to stay relevant. That’s a major reason why sweetgreen has poured so much time and attention into its mobile-ordering platform. “That was really to meet the consumer where they lived,” she says. “We have a very on-the-go consumer. How do we create that access to our food and our product? With technology, there’s that solution, as well as getting our back of the house right to make it frictionless and seamless for the consumer.”

    The mobile platform comes back around to a title that has been attached to sweetgreen since its early days: lifestyle brand. It’s a popular term for other fast casuals and many retail brands, describing a company that doesn’t just serve a product, but also connects with consumers’ lives and values through multiple touch points.

    Kelley says sweetgreen uses a different term: impact brand. Rather than simply be a company that fits into a customer’s lifestyle, she says, sweetgreen strives to be one that makes an impact in communities and in customers’ lives.

    “We look at an impact brand through many different lenses, but it’s through how we source our food and our food ethos and our connection with the farmers,” she says. “It’s how we impact the people that work for us and how we build future leaders and our people pipeline and provide them experiences, then [how they] grow and have impact.”

    Two other programs reflect sweetgreen’s status as an impact brand: the annual Sweetlife music festival and the Sweetgreen in Schools program. The former is a festival that started as a simple live music event in the parking lot behind an early sweetgreen location, but has since grown into a $100-a-ticket concert with thousands of attendees, several premium food vendors, and a roster of hip music acts (which this year includes The 1975, Grimes, and Halsey).

    And through sweetgreen in schools, the fast casual hosts a series of wellness workshops in local schools, using hands-on activities to teach kids about healthy eating, fitness, and sustainability. Since the program’s launch in 2010, sweetgreen in schools has reached more than 5,000 students in sweetgreen communities.

    The two programs, along with the brand’s mobile app, are intertwined; sweetlife attendees have the option to donate $5 to sweetgreen in schools when they purchase their tickets, while on the app, 1 percent of sales from Green Status members (those who have spent more than $100) is donated to the program.

    One industry observer says sweetgreen’s position as a lifestyle or impact brand is reinforced by the fact that it strives to create social change at the core of its business, rather than simply through cause-marketing initiatives.

    “What we know is that Millennial consumers care a lot more about the values of the companies they do business with,” says Denise Lee Yohn, marketing consultant and author of the book What Great Brands Do (and former QSR columnist). “Having a company like sweetgreen that is so committed to creating value in the community and helping people live healthier lives and educating young people about eating right and how food is grown—all of that really resonates with Millennial consumers.”

    Yohn adds that while many upstart companies in the retail space are attempting to become lifestyle brands, it’s neither simple nor right for every company. But in sweetgreen’s case, it’s become essential to the concept’s success.

    Building intimacy at scale

    The last year has been an interesting season for the fast-casual industry. As competition has intensified and access to premium food has evolved from customization-friendly fast casuals to more chef-driven Fast Casual 2.0 concepts, the pressure has built for brands to perform at a high level to impress both investors and younger customers.

    And then, of course, the last year has witnessed Chipotle’s startling slide. Long the standard-bearer for the fast-casual industry, Chipotle has taken some serious blows after its food-safety scare, watching sales and customer enthusiasm both plummet. It’s been a cautionary tale for all the fast casuals founded and developed in Chipotle’s wake—especially those brands, like sweetgreen, that have been ushered forward as “the next Chipotle.”

    Kelley says she and the sweetgreen team empathize with Chipotle for what it’s been going through, adding that if anything, other fast casuals should learn from how the fast-casual Mexican leader navigates through the turmoil.

    “It’s hard to be compared to Chipotle because I think as a business leader you can’t just step back and look at the challenges they face and look at the many great things they did and say, ‘We’ve got it all figured out and they just didn’t,’” she says. “I think it’s important for us to say that, if anything, when you’re in the space, we all learn from each other, and I think this should be a lesson for every person who has a responsibility in the foodservice space to learn faster, innovate faster, and really make quality assurance a critical discipline and celebrated function within the organization.”

    Yohn, the industry consultant, says sweetgreen has enormous potential to revolutionize the fast-casual industry, but she adds that it has challenges yet to come. For example, now that sweetgreen is building its presence in California, it’s facing off against dozens of other fast-casual chains that have staked a claim in the fresh, healthy food space.

    “They’re going to go head to head a lot more than they’ve had to in the past,” Yohn says. “I think that’s where sweetgreen is going to have to continue to really build their brand around all of their values and their community involvement and the social value they’re creating.”

    There are plans to do just that. Kelley says she has two major goals for sweetgreen in the coming years, the first of which is to train and empower the future company leaders so they can understand the impact they can have on the brand and the communities in which it operates.

    It’s her second goal that might be the hardest to accomplish, but the one that could determine exactly what kind of legacy she develops as the leader of the most exciting foodservice brand in America.

    “It’s this idea of building intimacy at scale and building a company that’s based on personal and authentic connections with our farmers and our growers and our customers,” Kelley says. “I think that’s hard to do when you’re growing and scaling, and presents some unique challenges. But I think we have the team and the capability to figure it out.”