Sweetgreen is banking on its digital future.
After all, it’s the fast casual’s intense tech focus in recent years that laid the foundation for Monday’s IPO filing.
Sweetgreen, which launched in 2007—the year the iPhone was born—has leveraged its digital channels to sell more salads, largely to big-city office workers, and the 140-unit brand is doubling down on its tech investments as it looks to double its unit count over the next three to five years.
In its prospectus, Sweetgreen noted that 68% of its revenue this last fiscal year came through its digital channels, with 47% of the revenue coming through the chain-owned digital channels.
That’s down a bit from the height of the pandemic when Sweetgreen’s digital revenue made up fully three-quarters of all sales. But it’s a big jump from 2019 and 2018 when digital revenue was 50% and 42%, respectively. In 2016, Sweetgreen’s digital revenue was just 30% of all sales.
On Friday, Sweetgreen is opening a pickup-and-delivery-only location in Manhattan, part of the new World Trade Center Tower 3 development. The restaurant has no indoor seating.
“Unlike our other locations, the World Trade Center restaurant omits indoor seating and features a state-of-the-art pick-up station to cater to Sweetgreen’s increasing online consumer base, and to accommodate a fast-paced and on-the-go dining culture,” Pamela Haber, the chain’s head of real estate-east, said in an email interview.
It’s no wonder Sweetgreen would seek to boost every digital order possible.
“The convenience of our multi-channel approach, combined with our ability to offer personalized content and recommendations (such as exclusive menu items and curated collections), results in a highly engaged cohort of habitual Sweetgreen customers,” the chain said in its IPO filing.
Diners who ordered through one or more of Sweetgreen’s digital channels this year (and who had made a prior purchase during the quarter) ordered almost 1.5 times more often in that quarter than customers who ordered in-restaurant, Sweetgreen noted. And super-users who ordered through two or more of Sweetgreen’s digital channels during a three-month period purchased more than 2.5 times more often than those who ordered through non-digital channels.
Last month, Sweetgreen acquired Spyce, a robot-powered bowl concept with an electric delivery fleet.
The chain said it intends to use some of its IPO funding to build out the Spyce platform.
“The purpose of the acquisition is to serve our food with even better quality, consistency and efficiency in our restaurants via automation,” Sweetgreen said in its filing. “This investment has the potential to allow us to elevate our team member experience, provide a more consistent customer experience, and, over time, improve our capacity and throughput, which we believe will have a positive impact on restaurant-level profit margin.”
The novel technology could ultimately help Sweetgreen save on labor costs. But building out Spyce also carries risks, the chain detailed in its filing.
“Our planned investment in developing automation technology after our acquisition of Spyce could cost more and could take longer to develop than we initially expect, which could require additional capital,” Sweetgreen said.
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