Tossed-salad star Sweetgreen gives Inc. an exclusive, in-depth look at its secret weapon: the small farms and food suppliers that fill its hip, healthy bowls
The fast-growing Sweetgreen gives Inc. an exclusive look inside its secret weapon: the farms and food businesses that make up its national supply chain.
IN 2007, KEANY PRODUCE CO., a family-run produce distributor in Hyattsville, Maryland, received a call: Three entrepreneurs were starting a salad restaurant in Washington, D.C., and needed to set up a regional supply chain for fresh greens and vegetables. Like most potential customers, the aspiring restaurateurs wanted to try the product before they bought it. So Keany packed up some arugula samples and sent them straight to the entrepreneurs’ personal residences—the undergraduate dorms at Georgetown University.
“We had an industrious sales lady,” says Ted Keany, the distributor’s vice president of sales. “She believed in everybody.”
It didn’t take long for that initial leap of faith to look like a very smart bet on Sweetgreen, the fast-growing, healthy-hipster salad chain started by Nicolas Jammet, Jonathan Neman, and Nathaniel Ru. By the time Keany and his brother Kevin met the co-founders and co- CEOs, Sweetgreen had opened its first storefront, in the Georgetown
neighborhood— one that regularly had lines down the block.
Fast-forward a decade: Sweetgreen is slinging salad in 70 locations across the country, with plans to expand to 90 by the end of this year. Jammet, Neman, and Ru are selling an aspirational lifestyle along with their kale caesar salads and quinoa-stuffed grain bowls, a savvy package that appeals to food-world celebrities as much as to nutrition- conscious consumers. Each Sweetgreen location proudly proclaims its transparent, farm-to-table bona fides, with seasonally tweaked menus and chalkboards listing the local farms that supply many of its salad ingredients.
“They’ve done a very impressive job,” says R.J. Hottovy, senior retail and restaurant analyst at Chicago-based investment research firm Morningstar (with which Inc. shares an owner). “It’s not easy building out a local and regional supply chain while building a national brand.”
It’s a huge, ongoing challenge—one that will only intensify with the company’s expansion. While Sweetgreen won’t discuss revenue or profitability (sales were last estimated to be $50 million in 2014, with the company unprofitable), in the past several months it gave Inc. an unprecedented, extensive peek inside its national farm-to-bowl operation. The lessons Sweetgreen and its partners have learned along the way can apply whether your business is a supplier to bigger companies or one that’s trying to set up its own supply chain.
Sweetgreen readily acknowledges that it’s impossible to find, say, fresh arugula in Chicago in the middle of January. But when it can’t source locally, it tells customers where their salad ingredients were shipped from. “I think that level of transparency is admirable,” says Mark Bittman, the longtime food writer and sustainability advocate, who co-created a salad for Sweetgreen in 2014 and now considers Jammet a friend. “Offhand, I can’t think of a better way to make this work. And you can’t argue with their success.”
Sweetgreen’s supply chain counts hundreds of regional growers, producers, and distributors, and has played a major role in its race to achieve national scale. Food-world connections also help: Sweetgreen has raised $135 million from investors including Shake Shack co-founder Danny Meyer, Momofuku overlord David Chang, and prolific French restaurateur Daniel Boulud. Jammet, whose parents owned high-end New York City eatery La Caravelle, grew up in this world and now oversees Sweetgreen’s food operations: “One of the reasons why we’re building this business is to create a different kind of relationship with food,” he says.
Still, in the race to become the king of sustainable salads, Sweetgreen is facing mounting competition from other fastcasual startups, including Dig Inn and Tender Greens (another Meyer-backed salad chain). But its biggest challenge might be growth itself. As Sweetgreen tries to do for bowl-based vegetables what Chipotle did for burritos, the younger company is also trying to avoid its elder’s stumbles. Chipotle, one of the first national brands to market where its ingredients come from, has faced supply-chain issues and food-borne-illness outbreaks as its restaurants have grown in number to more than 2,300. Jammet is hoping that Sweetgreen’s slower growth plans, which restrict it to markets that can support at least five to 10 restaurants at a time in a region, will prevent similar problems.
The other question: Can Sweetgreen’s suppliers keep up with its growth, and its demands for sustainable raw ingredients? “You can’t convert land to organic in less than three years,” as Bittman says. “You can’t create farmers when land is so expensive. It’s not instantaneous, obviously.”
As shown on these pages, Sweetgreen has already worked with some of its suppliers to increase their capacities or improve the efficiency of their operations. But the salad chain’s growth has also yielded some complications for its farmers, cheesemongers, and other local food suppliers. Now, as more companies try to tell stories around where their products come from to meet increasingly informed consumer tastes, you can learn a lot from how Sweetgreen and its suppliers went from begging a local distributor for arugula to selling Americans on steelhead trout.
SPRING MIX Workers at one of Jayleaf’s seven California ranches walk among rows of red mustard.