Sweetgreen’s unlikely plan for domination includes potato chips, robots, and (maybe) airport food courts. Co-founder Nicolas Jammet talks the company’s roots over breakfast for a new Forbes column, Cereal Entrepreneur
It sounds like the set-up to a joke. But Sweetgreen? The inescapable salad chain? It was started by three dudes who met at Georgetown: Nicolas Jammet, Jonathan Neman and Nathaniel Ru. That was sixteen years ago and in some ways it’s been a charmed ride: Sweetgreen, which now has more than 200 locations nationwide, went public in late 2021 at arguably the height of the market. And while the stock price has since cooled (as has the market in general), that influx of cash allowed the company’s founders to invest further in technology, acquiring a company called Spyce that automates production; in May, Sweetgreeen launched its first Infinite Kitchen concept in Naperville, Illinois, where a robot assembles your salad.
That’s just a pilot program but an essential question remains for Sweetgreeen as it levels up: How do you scale a business built on small, local farms? Is this a tech company or a salad company? And how does a business that caters to a lunchtime office crowd weather our new work-from-home hybrid schedules? Here, Jammet sits down with Forbes for a new interview series called “Cereal Entrepreneur,” hosted by Method and Olly co-founder Eric Ryan and journalist Mickey Rapkin. Over a bowl of cereal, Jammet reveals how Sweetgreen nearly went bust in year one, what really went on in the “war room” in the early days of the pandemic, and why dinner might be the key to profitability.
MICKEY RAPKIN: Let’s start back in college when you were probably eating a lot of cereal. You launched Sweetgreen as an undergraduate. How bad was the cafeteria at Georgetown that three guys decided to start a salad company?
NICOLAS JAMMET: The cafeteria didn’t really taste very good—or feel very good. There was the cult sandwich spot we all loved eating at but you can’t eat there all the time. Between the three of us, we decided there was this opportunity to rethink convenient fast food. Today, we wouldn’t even drive by that first space [we rented].
ERIC RYAN: What was wrong with that first location?
JAMMET: It was a 500-square foot shack with no running water, no plumbing, no electricity, no sewage. And we said, “Perfect, we’ll open a restaurant here.” (laughing) We’d taken this entrepreneurship class at Georgetown, we wrote a business plan, we raised $300,000 dollars from family, friends, old bosses, anyone that would talk to us. We were told by a lot of people—even by some of our professors—“Don’t get into that business.”
RYAN: Sometimes being naïve is good for a first-time entrepreneur. Outsiders are the ones that typically disrupt industries because they can see opportunity for change that experts can’t.
RAPKIN: Have you run into any of those professors since?
JAMMET: Funny enough, in our early days, we used to live on the Amtrak between D.C., Philly, and New York. We ran into one. My co-founder Jonathan was like, “Hey, I don’t know if you remember me, but I started Sweetgreen and you told me not to.” We ended up having a great conversation with him and had a laugh about it.
Growing Pains
RYAN: Tell us about an early hiccup. With any new start up I like to say you’re not trying to win but learn how to win.
JAMMET: That first winter—a few months after opening—we almost went full belly up. We were running out of cash because we had this tiny restaurant that didn’t have any indoor seating, and that served salads and frozen yogurt in the depths of winter near a campus where students went home. It forced us to really think about how to evolve the offering, the experience and how to think about the next [location].
RAPKIN: Your parents were in the hospitality industry. Was this always going to be your path?
JAMMET: My mom grew up in Switzerland and my dad in France. Going back generations on my dad’s side, everyone was in hospitality, hotels or restaurants. My dad came to the U.S. and had the restaurant La Caravelle. I grew up in that world and grew up with a lot of these chefs that honestly were some of the first believers in us. Daniel Boulud was one of our first investors, Joe Bastianich, Danny Meyer, all these folks that I grew up with. This was right at the beginning of that fast-casual boom. But growing up in that world, we all saw the blood, sweat and tears—late nights, weekends, no line between work and life. There’s a sense of ownership and risk.
RAPKIN: How close are you with Daniel Boulud? Was he in the kitchen making you snacks after school?
JAMMET: (laughs) We would spend holidays eating at his restaurant or with his family. I really respect him. He’s one of these individuals that comes from this very old-school world obviously, but he is so curious around what is new and what is next. He’s actually the one that introduced us to Spyce—
RAPKIN: The company behind the Infinite Kitchen.
JAMMET: He invested in it and was like, “You have to meet these guys.” Five years later we acquired them.
Enter the Robots
RAPKIN: Let’s talk about the Infinite Kitchen. You opened your first pilot restaurant in Chicago earlier this year. Customers order at a kiosk and essentially a robot assembles the salad. Can ChatGPT make a salad? Are you replacing workers?
JAMMET: Great questions. When we think about the future, we see automation and robotics playing an important role. Working in restaurants can be physically hard. When you go into Sweetgreen at peak rush, you’re interacting with the team member but they’re also trying to be fast and accurate and friendly. This new experience removes a lot of that intensity and repetitive motion.
RYAN: I love how you continue to be entrepreneurial as you scale with a progress-not-perfection mindset. How did experimenting with this technology impact the footprint of the restaurant? Does it allow you to be more efficient?
JAMMET: It will give us flexibility with different footprints. But the beauty of the experience is re-deploying our team members to be more focused on hospitality and on prepping fresh vegetables. It’s only been two or three months now. We’re excited to keep learning from it.
RYAN: Talk to us about the pandemic. Take us inside the room with the three founders when you realize people aren’t coming back to the office right away. Was it sheer panic?
JAMMET: When COVID hit, I don’t think we imagined it being this multi-year challenge. But we’d raised a lot of capital and we had invested heavily in our tech and digital infrastructure. We had just launched delivery on our app two months before which was really fortunate. We had also shifted so much more of our real estate and growth strategy towards suburbs and residential communities.
RAPKIN: OK. But were there wild, late night text chains? With links to article about offices never re-opening? There must have been some fear.
JAMMET: A lot of fear around the unknown and around what the world was going to look like. A lot of war rooms with the three of us and just our whole exec team. But we had a strong balance sheet. We’re grateful that we didn’t have to go into survival mode. Which was great because it allowed us to really focus on, OK, How do we emerge from this as a stronger company?
RAPKIN: I’ve gotta ask you about the loyalty program. Sweetpass+ sounds like a streaming service. Like it comes with 12 hours of Mrs. Maisel.
JAMMET: (laughs) That sounds like a good perk, actually. It was a lot of big brainstorms on the names. Instead of reinventing the wheel, it’s easier to just stay as straightforward and direct as possible. But it really gets back to this idea of routines and incentivizing folks to think about their daily rituals.
RAPKIN: Can you be profitable without getting people to come to Sweetgreen for dinner?
JAMMET: I think we’ve focused a lot on our offerings and the broader experience. Today our menu looks almost nothing like what it looked like 16 years ago. There are obviously salads. But we continue to make our menu heartier and add new entrees, new proteins, to continue to broaden the menu and attract the non-salad eaters. At that point the offering would be pretty relevant at dinner.
Going Public
RYAN: We always hear about the downside of going public. But have there been some surprises for you? What do you personally love about driving a publicly-traded company?
JAMMET: Listen, there’s positives and negatives to any experience. I would say it gave us a big microphone. And I would say we were really happy with the timing when it went public.
RAPKIN: You and your co-founders have become celebrities in a way. When each of you bought a house, The Dirt reported on the details. Is that strange?
JAMMET: To your point, everything we do now is public and there’s scrutiny and there’s a microscope on it. We’re very conscious about that with everything we do or say publicly. And so it is definitely a different mindset. But I would say even before going public, we kind of had this rule internally: “Don’t believe your best press and don’t believe your worst press.”
RAPKIN: Coming back to cereal, what gets you out of bed every day?
JAMMET: What keeps me going is knowing that even though we’re 16 years in and we have 215 restaurants, it’s still tiny in the context and scope of what it could be. And what we want to build. I mean, there are thousands of Chipotles, tens of thousands of McDonald’s. And if we really do want to help redefine fast food it’s going to be like a 100-year journey.
RAPKIN: OK. But this comes back to the initial question. How do you scale a business built on small farms? Because Chipotle doesn’t care who makes their beef.
JAMMET: I will say Chipotle—in the context of all the scaled fast food players—does a great job in general.
RAPKIN: Fine. But how does Sweetgreen get from 215 stores to 1,000 stores and still care about the farmers? I know how important your partners are to you.
JAMMET: What gets me excited is thinking about how we use our scale for advantage. As we now level up, we’re able to work with some of the largest growers in the country and we can say to them, “Hey, we want to transition this land to organic.” That’s how you can create real change in the industry. There are some things that we do at this scale that will not work at 1,000 restaurants. And that’s OK. As our supply chain grows and scales, there’s going to be new growers and new farmers and partners that we work with that we’re also really proud of. Just because they’re large it doesn’t mean they’re bad. We will always be 100% transparent on how we’re sourcing it and where we’re sourcing it from.
RAPKIN: You just introduced potato chips. Can we talk about this?
JAMMET: It’s our first savory collab—with Siete Chips. It’s our Green Goddess Ranch Dressing made into a chip. It’s the first time we’re selling potato chips at Sweetgreen. But sourced really thoughtfully and made with avocado oil.
RAPKIN: What has the world come to? Chips at Sweetgreen!
JAMMET: People love chips done our way.
RYAN: When do we see Sweetgreen at the airport?
JAMMET: I wish yesterday. It’s something we’d like to do and we’re learning more about. Operating in an airport is a very different and complex environment. There’s usually licensees, most people don’t operate their own restaurants. But it’s definitely something we hope to do.
RAPKIN: So, is Sweetgreen a tech company or is it a salad company?
JAMMET: First and foremost we’re a food company. And we love to leverage technology to rethink the whole experience and rethink our business model. At the end of the day, if a product is not craveable—and the desire isn’t there for the product—then nothing else matters.
The conversation has been edited and condensed for clarity.
Read the full article here
