All Sweetgreen units will be automated within five years, CEO predicts

And in other fast-casual highlights from investor season: Portillo's is killing it in the Sun Belt, and Potbelly is carrying momentum into 2Q.
Sweetgreen Infinite Kitchen Naperville
Sweetgreen is planning a second Infinite Kitchen later this year./Photo courtesy of Sweetgreen.

It’s investor conference season and restaurant operators were offering updates to Wall Street analysts at events this week. Here are some highlights from three fast-casual brands who presented at the William Blair 43rd Annual Growth Stock Conference on Tuesday.

Sweetgreen: All units will be automated in five years

About a month after opening the new automated Infinite Kitchen, Sweetgreen CEO Jonathan Neman said he is “super pleased” with how it’s going.

The first test of the robotic makeline opened in Naperville, Ill., in May. At this unit, humans prep all the food, just as they would any Sweetgreen, but ingredients are loaded into the automated makeline, which assembles bowls to order.

Neman said Sweetgreen officials were confident the technology would work, and so far there have been no mechanical breakdowns. But the company is evaluating the technology for how it impacts both the customer experience and unit economics.

So far, he said, customers seem to love it. The robotic system is faster and more accurate. And since fewer team members are needed to operate an Infinite Kitchen, Neman said the positions that remain are better jobs.

A second Infinite Kitchen is expected to open this year as a retrofitted existing location, though Neman did not indicate where that will be or when it might open.

Still, he remains very optimistic that the technology could solve the challenges of scaling a fresh-food concept, as well as boosting restaurant-level margins.

“In five years, we do expect all Sweetgreen stores to be automated,” Neman said. “We think all stores at some point will make the switchover.”

Portillo's exterior

CEO Michael Osanloo said Portillo's cult following is like "Shake Shack on steroids."/Photo courtesy of Shutterstock.

Portillo’s Inc.: Translating well outside Chicago

What do you get when you invest in a Portillo’s restaurant? With AUVs of about $8.4 million, you get one Chipotle, two McDonald’s and a Domino’s, said Portillo’s CEO Michael Osanloo. “The Chipotle is just our dine-in business. The two McDonald’s are our drive-thru business, and we deliver as much as a typical Domino’s done inside our box.”

The 70-unit Portillo’s is on a push for growth outside its Chicago homeland. Systemwide, seven units opened in 2022, nine restaurants are expected to open this year, and the chain expects to reach more than 100 locations within the next three years.

The iconic Chicago brand is translating well outside the Windy City. The chain has committed to growing 10% per year, and right now the brand is focusing on the Sun Belt: Florida, Texas and Arizona, all fast-growing states. “Being inherently lazy, I like rolling out of bed knowing that I’ll get a 10% comp just because I put my restaurant in the right place,” said Osanloo.

Portillo’s is pushing to reach 600 traditional flagship restaurants, but the company has explored and is close to mastering a new drive-thru-only format. Portillo’s opened one drive-thru-only location in Joliet, Ill., but Osanloo said the company felt it could do it better. So another version is scheduled to open in Rosemont, Ill., later this year.

Potbelly exterior

Same-store sales are up more than 14% so far in Q2./Photo courtesy of Shutterstock.

Potbelly Corp.: The Clubby is back

CEO Bob Wright said the Chicago-based Potbelly has maintained momentum in the second quarter, with same-store sales up 14.4% quarter-to-date—exceeding expectations—and strong customer traffic.

The more than 400-unit chain, which is 80% company owned, has launched a franchising push with the goal of refranchising 25% of units and achieving 10% franchise unit growth, with sights set on reaching 2,000 locations over the long term. The sandwich chain boasts a franchise pipeline of 81 restaurants, all part of multi-unit franchise deals.

One tidbit: The Clubby is back. It’s a previously offered sandwich now on an underground menu that’s only available through the app. In its first week back, it was the chain’s top seller, indicating the power of digital sales, which make up about 39% of revenues, said Wright.

UPDATE: This article has been updated to correct Potbelly's development projection and clarify that The Clubby is only available through the app.

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