sweetgreen CMO talks future of restaurants

The future of restaurants is digital, said Daniel Shlossman, chief marketing officer at sweetgreen, during his opening keynote address at the Fast Casual Executive Summit in Indianapolis, Indiana taking place Oct. 9-11. Shlossman said sweetgreen invested in digital early on, making it an attractive workspace.

The brand has 170 locations in the U.S. and will open three units in the next few weeks in Indianapolis, Detroit and Minneapolis, and "we're rapidly growing, Shlossman said. "Everything is done with sustainability in our mission of connecting people with real food."

The brand prides itself on its fast casual operations, "but to me it's all about creating a connection with our customers," Shlossman said. "Everything is done with sustainability in our mission of connecting people to real food in mind, predominantly salads (and) warm bowls, but we think about sustainability in everything, from the ingredients that make it on our menu to how they're farmed and the farmers that we work with to even decisions on how we run our business."

The brand was launched in 2008 but initially had a slow growth period. It is rapidly expanding, with 40 units expected to open this year.

Employees

Labor issues abound in the restaurant industry, and Shlossman said it all starts with the people. First, sweetgreen has coaches, and general managers review what's going at the store level in what's known as a "sweet talk."

"Our team member at the store level, if they're not happy, healthy and excited, they're not going to give the right experience for the customer and the business isn't going to work," Shlossman said.

Second, the brand has built a number of proprietary apps that help employees do their jobs in the back of the house.

Innovations

The company is known for its innovations.

"From a willingness perspective, it's a willingness to invest and test," Shlossman said. "I wouldn't have ended up at sweetgreen if I hadn't gotten that feeling from our founders that this was a company that one, wanted to see what else we could build … Catering, delivery (and) pick-up -- how can we create a channel that was a little bit of a mixture of all of those and that became our 'outpost' business.

"From an unwillingness perspective, it was an unwillingness even in good times to be ok with the status quo."

Shlossman said sweetgreen was one of the first loyalty programs within an app and has been a journey to get right. They "sunset" that in early 2021 when most companies were putting emphasis on loyalty.

Outpost, the company pivot from B2C to B2B in offices, was a big move for the company. Shlossman was able to scale the business in mass, scaling it from a couple to a couple dozen to a thousand between 2018 and 2020. At one time, the brand was opening 40 to 50 office units a week.

"Pretty quickly we saw that this was working," Schlossman said. "It was by far the fastest growing channel for us."

When the pandemic hit, the brand pivoted to what it called "impact outpost" serving hundreds of salads to hospitals in its markets using the logistics interface that it had built out. The outpost business is growing back, and as of Q2 sweetgreen has more than 700 outpost units in operation.

Sweetgreen has a robust delivery system. It was launched in January 2020. At the time, delivery wasn't common. The brand looks at delivery holistically, Shlossman said, and there are two components to it: direct, first party through the brand's own app and second, third-party delivery companies.

"We believe we give the best the best possible delivery experience to our customers directly through the sweetgreen app," Shlossman said. The brand has expanded delivery radiuses, delivering up to 10 miles if buying through the sweetgreen app.

Sixty to 70% of sales is digital. Around half is directly through sweetgreen.

The brand's loyalty program was a one-size fits all turnkey program in the beginning, and it soon learned customization is the better way to go in order to meet customers how they use sweetgreen. They sunsetted their loyalty program in spring 2021 and built a better, more intuitive program.

Sweetgreen even tried a subscription program, sweetpass, $10 for a 30-day pass where customers got $3 off once a day. Although the program was a pilot and is not in service now, they sold 17,000 subscription passes in a two-week sales period.

"We saw pretty incredible results," Shlossman said. The average customer visited five times. It increased frequency three times.

The brand has made headlines for testing several restaurant formats centered around digital, with the first digital store opening in the Washington D.C. area in the coming weeks.

"That is all about can we serve the customer in a better way by essentially having all orders coming in through a digital app or website," Shlossman said, "and create a little bit different experience in store."