Editor's note: Inc. Magazine announced its pick for Company of the Year on Tuesday, November 29. It's Riot Games! Here, we spotlight Sweetgreen, one of the contenders for the title in 2016.
The secret sauce of Sweetgreen is that there is no secret sauce.
In fact, the only thing secret about the healthy fast-casual chain is its revenue. (The last reported figures, for 2014, were $50 million.) At Sweetgreen, food sourcing and preparation are fully transparent. Ingredients arrive fresh each morning from local growers and other trusted partners, who are listed on a chalkboard. Customers watch kitchen staff deftly chop cheese, kale, and cauliflower behind panes of glass. Long lines snake fast and frictionless past a garden's worth of produce and proteins, as employees assemble customized medleys in biodegradable bowls.
The business is so focused on controlling its own ingredients that this year it ditched Sriracha, "because we want to make most everything that we can from scratch," says co-founder Nathaniel Ru. (Now, red pepper flakes bring the heat.)
Ru and two Georgetown University classmates--Nicolas Jammet and Jonathan Neman--launched Sweetgreen in 2007, in Washington, D.C. Today the chain is 64 restaurants strong, with 25 opening in 2016. Headquarters moved this year to Los Angeles, "because we wanted to recreate what we did on the East Coast with our culture and values from the ground up," says Ru.
The company employs 3,000 people in eight states. Not yet profitable, it is deploying the $95 million it raised earlier from investors like Danny Meyer and Steve Case to build powerful systems for siting and planting new stores, forging supple regional supply chains, and developing technology for mobile ordering and cashless transactions, with which it is experimenting.
Sweetgreen is sometimes hailed as the next Chipotle, but "I think it's the wrong analogy," says Gary Hirshberg, the chairman of Stonyfield Farm, who is a board member and investor in the business. Sweetgreen "radically changes its menus four times a year to harmonize with the seasons," says Hirshberg. "Customers have come to expect that frequent refreshing. Chipotle obviously doesn't do that."
In fact, Sweetgreen more closely resembles a hybrid of iconic companies from other industries. Like Whole Foods and Wegmans, it sends experienced teams to open and train in each new location. Like Kimpton Hotels, it urges staff to interact thoughtfully and even playfully with the public--for example, by putting shower caps (along with restaurant gift cards) on bicycle seats when it's raining. Like Life Is Good, it sponsors its own music festival, which in May attracted 20,000 people to a venue in Maryland for performances by the 1975, Halsey, Flume, and others. The festival "is a really cool way for us to celebrate this idea of healthy," says Ru. "It doesn't just talk about food. It talks about the lifestyle."
Sweetgreen is socially conscious in the obvious sense that it serves food that won't kill you or the earth. But it has also educated roughly 6,000 children through in-school nutrition programs. Opening in inner city food deserts is trickier: Localized supply chains don't lend themselves to bargain prices. For now, Sweetgreen seeks creative ways to serve those neighborhoods. When it opened this year in Chicago, for example, it worked with a partner to turn a Chicago Transit Authority bus into a mobile market selling organic foods in the city's south and west sides.
Rapid expansion has not been bumpless. Recently, authorities in Boston temporarily closed two stores for health-code violations. Ru says the company puts a lot of emphasis on training and food safety. "As we are scaling, we are learning," he says.
And in other areas, such as community outreach in new markets and choosing locations, the company is executing with the savvy of a much larger player. "They are built for growth," says Hirshberg.
Customers seem to agree. On a brisk fall afternoon, Hope Pomerantz--a Sweetgreen regular--is meeting a friend for lunch at a store in Center City, Philadelphia. "I love that everything is really fresh and you can ask for whatever you want," says Pomerantz. "Everyone is friendly and helpful. They move the line quickly. It's definitely a great go-to place."