Sweetgreen plans to open two fully automated restaurants in 2023 using the robotic Spyce technology acquired last year, the company said Tuesday.
Saying that automation could be “transformative for the restaurant business,” Sweetgreen CEO and co-founder Jonathan Neman said two new units will open with the entirely automated makelines and the format will be dubbed The Infinite Kitchen. If those units are as successful as is anticipated, Neman said Sweetgreen could start rolling out the robotic restaurants as soon as 2024.
“These restaurants will serve our food with even better quality, perfect portioning, faster speed and will create a more consistent customer experience, all while elevating the role of our team members,” Neman said. It will also help the company “create a more profitable and scalable model.”
At the same time, Neman also said Sweetgreen will reintroduce a focus on hospitality and customer experience that the company calls “Intimacy at Scale.”
During the Sept. 25-ended third quarter, the 176-unit chain’s performance was dampened by a cluster of underperforming locations in the Southeast that opened during the pandemic. It was a time when the brand wasn’t fully following its playbook for growth, Neman said, including making connections with local communities and training staff on providing the excellent experience Sweetgreen calls “the sweet touch.”
Neman said efforts to re-energize those restaurants is showing good results.
“Training remains critical to our success in implementing our intimacy at scale playbook, especially as the majority of team members joined during the pandemic when we had switched to digital only operations,” said Neman. “We’ve refocused our training on customer hospitality as the world opens back up.”
The chain is also working to fix lingering staffing problems that have continued to impact operating hours.
Though the restaurants are 95% staffed and recruiting has eased this year, Neman said Sweetgreen is having a problem with call outs. The chain is shifting its staffing models, he said, because “employees who are scheduled to work 30 hours or more call out less and have higher tenure than those who are scheduled to work fewer hours.”
Next year, Sweetgreen plans to launch a new loyalty program. The company has been experimenting with elements of it with the Sweetpass launched this year, as well as a “rewards and challenges” program for digital customers that allowed them to earn things like discounts or free delivery for participating.
Sweetgreen is also in the early stages of growing catering, piloting it in 20 stores. Neman said average order values so far have exceeded $500 and weekly sales have tripled.
“Over the coming months, we will add additional markets to our pilot and begin marketing activity to drive awareness,” he said. “We see real growth opportunities with Outpost and catering, as return-to-office trends upward and group gatherings increase.”
Sweetgreen is also expanding its menu with the addition of dessert as a category. Neman also said the company is testing use of a plant-based protein called Meati, a meat alternative made with mycelium—the root structure of mushrooms—at the chain’s Culver City Food Lab in Los Angeles. Sweetgreen’s co-founders are investors in Meati Foods, as is the venture capital arm of Chipotle Mexican Grill.
The moves are all part of the company’s strategy of reaching profitability by the first half of 2024.
For the third quarter, revenues were up 29% to $124 million. But the company grew its net loss to $47.4 million, compared with a loss of $30.1 million a year ago. Those results were impacted by an $11 million impairment charge related to previously announced layoffs of about 5% of workers at the company’s Support Center.
The company in August said it would close the Support Center to move to smaller offices next door as a longer-term cost cutting move.
For the quarter, Sweetgreen’s same-store sales were up 6% but that was entirely a result of a 6% menu price increase taken in January this year—though Neman noted that Sweetgreen held off on increasing prices even more during 2022, as most other chains have done.
And as other chains raise their menu prices, he said, “the relative value we offer is improving.”
Average unit volumes during the quarter increased to $2.9 million, from $2.5 million a year ago. And about 60% of sales come from digital channels, including third-party delivery.
Neman, however, said the automated Infinite Kitchen format could cut labor in half, while also boosting throughput, and improving accuracy and portioning.
“As you can expect, machines make these things perfectly,” he said.
The company is also moving forward with other formats, like the digital-pickup-only model that opened recently in Washington, D.C. And next week Sweetgreen will open its first drive-thru for digital order pickup in Schaumburg, Ill., which is dubbed a Sweetlane.
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