Sweetgreen made a splash last year with blockbuster menu additions like Maple Glazed Brussels Sprouts and Caramelized Garlic Steak. Backed by six weeks of heavy marketing, both items were a hit, driving strong comps and increased traffic.
Expect even more innovation in 2025.
Cofounder and CEO Jonathan Neman told investors on Wednesday that Sweetgreen will create a “steady drumbeat of newness” this year by ramping up the pace of innovation across multiple areas of the business. The goal is to drive frequency and broaden the customer base.
That will start next month with the nationwide launch of Ripple Fries, which Neman said reimagine a fast-food classic in a way that is “authentically Sweetgreen” and “complements our vibrant, produce-driven menu.” The new item is made with just five ingredients, cut daily in-restaurant, and air-fried in avocado oil. Each order comes with a side of new house-made pickled ketchup or garlic aioli. Sweetgreen started testing the item late last year.
“It’s the highest attach side that we’ve ever had and tested and totally incremental,” Neman said. “The feedback has been pretty amazing from consumers. It’s craveable. It’s a permissible indulgence, where you can have your salad and get the fries on the side. And not only are the fries amazing and done only with five ingredients, no seed oils, cooked in olive oil, baked and air fried—but also the price will be pretty attractive.”
Sweetgreen will keep the news rolling in April with the nationwide rollout of its new loyalty program, called SG Rewards, which lets members earn 10 points for every eligible dollar spent.
The fast casual previously introduced Sweetpass in 2023, a two-tiered loyalty program that included a free component as well as a $10 monthly membership option with additional perks. Early last year, Neman told investors the program hadn’t meaningfully moved the needle on overall transactions and foreshadowed “some pretty significant changes and optimizations” to come, including simpler rewards, a better in-app experience, and more one-to-one personalization. On Wednesday’s Q$ earnings call, he said insights from Sweetpass and Sweetpass+ users played a key role in shaping SG Rewards, with a focus on giving members more control over how they earn and redeem perks.
Neman teased more news to come in 2025, including a partnership with a Michelin-starred chef in May and three to four seasonal launches across summer and fall. This marks a return to Sweetgreen’s previous strategy of a seasonal menu with five annual menu changes. Last year, the company slowed to just two launches but is now ramping back up.
“I think one of the biggest lessons from 2024 was the importance of newness and creating that drumbeat specifically around new menu launches,” Neman said. “What we realized is that our frequent users really do love that newness and that seasonal menu. And so this year, we will be bringing back not only the seasonal menu but a number of other big launches.”
The increased pace of new menu launches will also enhance the value equation, he added, with the seasonal items introducing more mid-tier price options.
“The other thing that was important about the seasonals was it was a huge part of the story and brand positioning,” Neman said. “The fact that you’re supposed to eat food with the season, that’s a huge part of what the Sweetgreen brand stands for. In terms of the resonance and a reason to talk to consumers and a positioning of who we are and what makes us special, we believe that’s something that our consumers will really value and that will resonate.”
All of the “newness” with menu launches and the loyalty update could help Sweetgreen build momentum after a rocky start to 2025 shaped by external disruptions.
The company delivered solid Q4 results against a tough comparison, lapping last year’s highly successful protein plates launch. Revenue increased 5 percent to $160.9 million. Comps were up 4 percent versus Q4 of 2023, consisting of a 4 percent benefit from menu price increases and flat traffic and mix. Restaurant level profit margin expanded for the eighth consecutive quarter to 17.4 percent, a more than 100-basis-point improvement from 16.2 percent a year ago. But a few factors are making Q1 a challenging period.
“In the first two months of the year, we had a number of external factors that were honestly just much more severe than anything we’ve ever seen,” CFO Mitch Reback said, noting that it started off with the holiday week shift in the first week of the year.
Then there were the Los Angeles wildfires. They didn’t cause physical damage to any of the company’s locations but significantly disrupted operations in a market that represents nearly 15 percent of Sweetgreen’s revenue. To put things into perspective, Reback said comps in L.A. went from high single digits in 2024 to negative double-digits in Q1. Plus, extreme weather in January and February affected guest traffic across roughly 60 percent of the fleet.
“When we look at the pace of where we’re at through February, the business has comped negative 6 percent, and we believe 700 basis points of that is attributable to these three factors,” Reback said. “So, without any menu innovation or marketing, the business would have been positive around 1 percent through February. The business has improved considerably in February from January… and we see Q2, Q3, and Q4 continuing to strengthen as we get further away from these events.”
Turning back to fiscal 2024, sales grew over 15 percent to $676.8 million and restaurant level margin expanded more than 200 basis points year-over-year to 19.6 percent. Adjusted EBITDA of $18.7 million was a $21.5 million improvement over fiscal 2023, marking the first full year of positive adjusted EBITDA in the company’s history.
Sweetgreen opened 25 new restaurants and ended the year with 246 total units, 12 of which are equipped with the Infinite Kitchen.
Neman continues to be pleased with the financial and operational performance of restaurants with the automated assembly line. They‘re delivering at least seven percentage points in labor savings and one point in improved COGS compared to restaurants of similar age and volume. They’re also driving higher native digital sales due to their high throughput and consistency. And they’re only getting better as time goes on
“We’ve done a lot of work on the finishing station,” Neman said. “Every bowl has to be finished, and that’s really where sometimes the bottlenecks arrive. We’ve actually redone our finishing stations, thinking about the ergonomics of those and how we make it so we’re more accurate and faster on those, and we’ve seen some really great results.”
Sweetgreen also has been working to improve throughput and fine-tune operations in traditional stores that don’t have the automated assembly line. To that end, it is testing an initiative called Project Turbo, which aims to leverage both the digital makeline and the front line at different points in the day. That means using the front line to supplement digital orders in the morning when there’s less in-store traffic and using the digital makeline to help line-bust with handhelds during the lunch rush.
“Being able to take advantage of the double engines in all of our restaurants and efficiently route the orders to where it makes sense should allow us to capture more peak demand and do it in a more labor efficient way,” Neman said.
Additionally, Sweetgreen made significant improvements to its labor optimization and deployment practices in 2024 and sees further opportunities for improvement in 2025. A key part of this is a new AI powered workforce management system designed to optimize forecasting, scheduling, and overall efficiency. The system gives team members an optional, user-friendly mobile platform to manage their schedules.
By leveraging AI, Neman said the company is streamlining labor planning and improving shift coverage, freeing up head coaches to focus more on team development and the guest experience. It is on track to have the tool in every restaurant by the end of Q2.
“We’ve already deployed this system across nearly half our fleet and the early results are promising,” he said. “On average, team members receive 10 percent more hours per week while reducing overtime expenses.”
Sweetgreen plans to accelerate unit growth by at least 15 percent this year. New markets on the radar include Sacramento, Phoenix, and Cincinnati. The 2025 pipeline includes 40-plus new restaurants, half of which will have the automated production line. One to three Infinite Kitchen retrofits of existing restaurants are slated for the year, too.
