When did eating salad become trendy? If you are trying to get into better shape or simply want to eat healthier you may have already stumbled upon Sweetgreen. Sweetgreen is a restaurant chain that mainly sells salads. These aren’t your average salads, they can cost more than $15 dollars a pop. It looks like Sweetgreen is on to something since consumers are willing pay for food that is both healthy and convenient. That value proposition has translated into fast growth for Sweetgreen with its sales reaching $221 million last year. Even more impressive is the fact that Sweetgreen has a market valuation in the billions.

If you are curious about the hype surrounding Sweetgreen then consider these 9 facts about Sweetgreen’s strategy and growth.

1. Sweetgreen got its initial funding from friends and family. Sweetgreen was started by three Georgetown University grads who wanted to make fast food healthy. The trio, Jonathan Neman, Nicolas Jammet, and Nathaniel Ru raised $300,000 from 50 investors that consisted mainly of family and friends. With that amount the founders got started by opening Sweetgreen’s first restaurant in 2007 near the Georgetown University Campus in Washington DC.

2. Sweetgreen is looking to take over fast food. Sweetgreen has grand ambitions which include becoming “the Starbucks of salads.” To get there Sweetgreen is planning to double the number of stores it has within the next three to five years. It currently has 140 locations with plans for 31 new locations in 2021 alone.

3. Sweetgreen sees itself as more than a salad maker. Store expansion is not enough for the ambitious chain as it is planning for an eventual expansion outside of its core restaurant business. This expansion may involve new menu items and Sweetgreen branded salads in a retail store near you. "Salads and bowls are just the beginning of our culinary offering," the company said in its initial public offering (IPO) filing. "Guided by our food ethos and leveraging our supply chain, we believe we can expand into new possible menu categories, such as broths, soups, desserts, and beverages to grow our day-parts and basket size." "Our brand awareness also allows us the opportunity to expand beyond our core menu categories and into consumer packaged goods, such as dressing, sauces, or packaged produce."

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4. Sweetgreen was a first mover in digital ordering. Long before the COVID-19 pandemic arrived, in 2013 Sweetgreen allowed customers to order ahead using its mobile app, one of the first fast casual restaurants to do so. That early focus helped the retailer to acquire online customers at a fast rate. Sweetgreen now boasts 1.4 million customers who have made at least one online order within 90 days.

5. Digital is a key part of Sweetgreen’s growth. Within the first nine months of 2021 68% of Sweetgreen’s revenues came from digital orders placed either on the retailer’s app or on a delivery platform like Uber Eats. This is a selling point with investors since Chipotle, who is considered a leader in digital, had 42.8 of its sales come from digital orders in its most recent quarter which is much lower than Sweetgreen’s rate.

Investors often drive up valuations for companies that are seen as disrupting the way traditional businesses behave by using technology. Sweetgreen raised $450 million before going public. “There’s an enthusiastic investor class that’s more interested in them as a business than just any restaurant chain selling salads,” said David Henkes, a senior principal at Technomic, a food service consultancy. “Salad as a differentiator is just not that exciting. The exciting part is the technology they offer. They’re on the digital frontier.”

Another selling point of Sweetgreen’s digital business is that the average size of a Sweetgreen order is 21% higher when customers use Sweetgreen’s app than when they order at a Sweetgreen store. “We are one of a select few restaurants designed with technology as the basis for all elements of our operations,” wrote Sweetgreen in its IPO filing. “Many restaurants were built on antiquated technology, and while they have tried to slowly adapt, we believe they are at a fundamental disadvantage given their large legacy footprints and historical underinvestment.”

Many of Sweetgreen’s locations have extra space within the kitchen to fulfill online orders, a practice which Chipotle has also adopted.

6. Sweetgreen has grown quickly. Prior to the COVD-19 pandemic Sweetgreen’s sales were on a tear growing by over $200 million within a five year period between 2014 and 2019. Like most retailers Sweetgreen’s revenue dipped in 2020 but revenues over the last 12 months have passed pre-pandemic levels.

6. Sweetgreen hasn’t figured out how to be profitable. Sweetgreen has never made a profit in any fiscal period since it launched its business nearly 15 years ago proving it has been unable to create a profitable business model. In 2020 it lost $141.2 million and in 2019 it lost $67.9 million. Sweetgreen has actually lied on several occasions by saying the company was profitable when in fact it wasn’t.

7. Sweetgreen is also attempting to transform the way salads sold by setting up what it calls Outposts in 1,000 offices, apartment buildingsand hospitalsaround the United States. Customers can order from Sweetgreen and then simply pickup their order at an Outpost which is a small area located right inside the place where customers work or reside.

This is a compelling value proposition because it allows customers to quickly grab lunch without even leaving their building. “It is part of our initiative to meet customers wherever they are,” says Neman. “We’re always trying to make it easy and convenient to offer food that is healthy.”

Outpost orders are often made in ghost kitchens where the real estate costs are lower. Since orders are often made in batches for a single office location Sweetgreen also saves on last mile delivery costs by using this model. “What’s exciting about Outpost is it allows us to serve customers at scale with no fee and without having to build new locations,” Neman said. “Employees in the offices where these exist think of this as an amenity and that is exactly what we want. This is disrupting the traditional storefront idea.”

Since Outposts orders are large they help to subsidize delivery costs. The lack of a delivery fee is another selling point for customers.

8. Sweetgreen sees pickup and drive thru as the future. Like Chipotle and Starbucks Sweetgreen is planning to launch drive through and pickup locations. In 2019 Starbucks opened its first pickup only location in the United States. These locations are small and often do not have seating and are meant to cater to customers ordering using the Starbucks app who want to grab their order and go. Starbucks is in the process of building out its network of pickup only locations as well as locations with driver thru windows. 70% of the 200 Chipotle restaurants opening this year will include a Chipotlane, a drive thru lane which is popular with customers.

9. Sweetgreen has a sky high valuation. Before going public Sweetgreen, with a valuation of $1.8 billion, was the only restaurant unicorn (a private company with a valuation of at least $1 billion) in the United States. Earlier this month Sweetgreen had an IPO that raised $364 million for the company. Sweetgreen currently has a market value of $4.3 billion.

9 Things About Sweetgreen’s Growth & Strategy You Need to Know