Sweetgreen is an American food chain selling salads. It was set up in 2007 and has gone from strength to strength, becoming a cult favorite among younger diners. Now Sweetgreen is taking the next step in its journey to scale. On Monday, it filed a confidential application for an initial public offering (IPO). The IPO date has not yet been set but is expected during the fall.
What is the Sweetgreen story?
Sweetgreen’s is an unlikely success story. The founders essentially took an existing, rather mundane, side dish and turned it into a multi-billion-dollar company.
The millennial shift has undoubtedly helped their success in consumer attitudes to a more health-conscious existence.
And the company cashed in on this superbly by serving up simple, seasonal, healthy salads and grain bowls. Each of them is made in-house from scratch, using healthy produce delivered that morning.
Best of all, health experts are fans.
Lisa Muras, RD, and Nadine Jakim Young, MS, RD, CDE of Virginia Hospital Center said:
“Sweetgreen has some of the best choices for a healthy lunch or dinner, hands-down. Most salads total between 400 and 500 calories, an affordable calorie allotment for the majority of people.”
It also has an impressive celebrity fanbase. Gwyneth Paltrow and Martha Stewart have endorsed Sweetgreen, while Selena Gomez, Kendall Jenner, Cory Booker, and Leah Obama have all been seen in its restaurants.
The company innovated not just at salad-making but also marketing. In 2011, it launched the Sweetlife music festival and a Sweetgreen in Schools nutrition program.
Just like Warby Parker, which also just filed for IPO, Sweetgreen has been subject to IPO rumors for years.
In fact, the two companies have very similar backstories. Both were started by a group of friends at business school.
Plus, they took an existing product and successfully marketed it in a brand-new way.
Nicolas Jammet, Nathaniel Ru, and Jonathan Neman are the co-founders of Sweetgreen.
How Sweetgreen Makes Money
Sweetgreen is pricey, but that doesn’t seem to put patrons off and certainly helps it make money. It’s 2019 revenue topped $300 million.
The company raised $22 million in 2013 and became profitable in 2017, which raised a further $127 million.
In late 2018 Sweetgreen became the first-ever restaurant unicorn achieving a $1 billion valuation.
And earlier this year, it raised around $670 million, giving it a $1.8 billion post-money valuation.
These venture capitalist investors include T. Rowe Price, Red Sea Ventures, Signatures Capital, Scott Belsky, Revolution, Collaborative Fund, Danny Meyer, and Daniel Boulud.
Ups and downs
It hasn’t all been plain sailing. Sweetgreen was sued by employees at least three times between 2014 and 2017. Then during 2018, all of its senior staff, bar the founders, resigned.
But all appears well at the moment, and the company still has major ambitions to realize.
In a tech-savvy world, Sweetgreen wants to harness the power of blockchain to track the seed-to-salad journey of every ingredient it sells.
Its futuristic vision knows no bounds. Using a DNA Genetic Testing & Analysis service such as 23andme (NASDAQ: ME), it sees a time where customers can share their microbiome data with Sweetgreen. So it can then curate menus based on dietary preferences.
Sweetgreen is a post-pandemic growth play worth watching. The global health kick shows no sign of slowing down, and as long as the consumer is willing to part with double-digit dollars for a salad, Sweetgreen should continue to thrive.