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Daily news and analysis about the food tech revolution

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Sweetgreen: We’re Going Full Robot

Sweetgreen CEO Jonathan Neman told investors this week at William Blair’s Growth Stock conference that the company plans to have its Infinite Kitchen robotic makeline installed at all new locations within a five-year timeframe. The proclamation marks the first time the fast-casual salad chain has indicated they plan to deploy automation across all of its new locations.

According to the analyst’s note about Neman’s disclosures at the conference, the early results from the Infinite Kitchen have been extremely positive:

Sweetgreen’s first Infinite Kitchen (robotic assembly makeline) has proven that the technology works, with zero downtime so far and significant benefits related to faster throughput and improved portioning and order accuracy (order portioning and accuracy have historically been the company’s weakest links in NPS). With less labor intensity and greater job satisfaction so far, we believe the Infinite Kitchen has the potential to structurally change sweetgreen’s labor model, as roughly half of variable labor stems from assembly.

Another interesting disclosure from the conference was the success of the company’s membership program. According to William Blair, Sweetgreen’s sweetpass and sweetpass+ “are yielding incremental guest frequency, with gamified and personalized challenges yielding a 15% frequency lift while sweetpass+ ($10 monthly membership offering a $3 daily discount) is exceeding expectations with a significant lift in frequency (management indicated it would be happy with an incremental two visits per member per month) and low churn.”

These results show the company has improved food production, customer experience, and loyalty by deploying new technology. The result is a stronger bottom line, as Blair predicts the company will continue its fairly impressive 20%+ EBITDA margins in established locations and new build locations in the coming years. For a company that has long stated it’s as much a technology company as a restaurant company, it looks like its approach has continued to yield dividends and keep Sweetgreen one of the most interesting chains in the restaurant business.

Two Years After Buying Spyce, Sweetgreen Launches Infinite Kitchen Robotic Restaurant

Last week, Sweetgreen opened the company’s first robotic restaurant in Naperville, Ill, a suburb of Chicago.

The new automated restaurant, which the company calls Infinite Kitchen, comes almost two years after the company acquired Spyce Kitchen, a startup building automated robotic makelines.

The Infinite Kitchen name is not new; Spyce first used the name when it launched its second-generation robotic kitchen platform in November 2020 and, like the new Sweetgreen Infinite Kitchen, the system was visually reminiscent of the Creator burger makeline. The system’s conveyor belt runs under ingredient dispensers that drop customized mixes of fresh ingredients into bowls. You can see the Sweetgreen version of the Infinite Kitchen in action below.

In the video and the press release, Sweetgreen takes pains to make clear that while it sees automation as a way to add efficiency to operations and enhance the customer experience, they are not doing away with humans as part of the Sweetgreen experience.

“Every meal begins with human hands,” says the video’s narrator, “from our local farmers to our team members, all there to guide you through the process.”

With the Infinite Kitchen, Sweetgreen has also rethought the customer process flow, integrating digital touchpoints (including self-service kiosks similar to those from Spyce).

From the release:

When visiting the Naperville Sweetgreen restaurant, customers are greeted by the new “host” position which provides a more personalized connection between team members and guests. To order, customers can utilize self-service kiosks, place an order through the mobile app, or order directly from the restaurant’s host. The new restaurant format also brings in a new Tasting Counter, brand-storytelling digital screens and a revamped merchandising strategy for an authentic Sweetgreen experience at every touchpoint. Customers visiting the store will be able to shop exclusive merch with designs inspired by the new store joining the Naperville community.

According to the company, Sweetgreen will open its second Infinite Kitchen location later this year at an existing restaurant, where the company hopes to learn how to integrate and retrofit the new technology into an existing kitchen.

Long term, expect the company to expand the use of automation to most of its locations. Company CEO Jonathan Neman has said that about half of Sweetgreen’s labor is food assembly. “And this Infinite Kitchen takes the majority of that,” Neman said in November.

Restaurant Tech News Pod: Web3 Restaurants, Sweetgreen Robots, Subway Smart Fridge

Last week I caught up with Expedite’s Kristen Hawley to talk about some of the recent happenings in the world of restaurant tech.

Some of the stories we talked about on this episode include:

And more! You can listen to the podcast below or find it on Apple Podcasts or wherever you get your podcasts.

Sweetgreen’s New Takeout-Only Location Is a Logical Landing Spot For Spyce’s Kitchen Robots

This morning, Sweetgreen announced they are opening their first pickup-only location in Washington DC’s Mt. Vernon Square neighborhood. Opening on August 1st, the new location will not have any dine-in seating, will feature shelves for pickup and delivery, and all food production will be hidden from sight behind the shelving system.

My first thought upon seeing the digital renderings of the new restaurant was it reminded a lot me of Eatsa’s spare tech-forward front-of-house. My second thought was maybe Sweetgreen has robot aspirations for the back of house like Eatsa once did.

A quick refresher to understand my line of thinking. Spoon readers may remember that Eatsa’s original vision included not only an automat-like front of house with rows of cubbies and ordering kiosks, but also included a long-term plan to roboticize the back of house. They even received a patent for a fully-automated food assembly system last year.

And then last year, Sweetgreen made a fairly surprising acquisition when they scooped up robotic restaurant startup Spyce. Surprising because just the year before, the company layed off its technology team, including the company’s head of automation.

Since that acquisition, Sweetgreen has closed the remaining Spyce branded restaurants and redeployed the Spyce team to work on solutions for Sweetgreen’s own restaurants. At the time of the deal, Sweetgreen said Spyce’s automation technology will allow its workers to focus more on customer service, expand its menu into warm foods, and make meal preparation more consistent.

With all that in mind, it makes one wonder if the new restaurant format is a logical landing place for Spyce’s automation technology. With a completely digital order flow, small kitchen footprint, and the design flexibility a completely new store format gives them, it makes sense that Sweetgreen might see its new pickup-only location as the perfect place to deploy Spyce’s kitchen robot technology.

Of course, this is all pure speculation, and there’s a good chance Sweetgreen might just stick with their traditional kitchens with humans doing the bulk of the cooking. But with the company’s founders’ original vision of creating a tech company that serves food, this new restaurant format might provide them just the opportunity they are looking for to put the robot business they acquired last year to good use.

Spyce Closes Location of First Robot Restaurant as It Turns Focus To Sweetgreen

When Sweetgreen acquired robot restaurant startup Spyce in August, one of the outstanding questions was whether the new owners would continue to operate the standalone Spyce restaurants. Finally, it looks like we now have an answer.

According to a post today by Spyce on their Facebook page, the company’s original location at Downtown Crossing in Boston will close at the end of this week.

From the post:

To our DTX Family:

Since our recent Sweetgreen acquisition, we’ve been working hard each day on our mission to scale healthy food and bring the magic of Spyce to more communities. In the next chapter of this long journey, we’ll be closing our DTX location after evening services on 10/22 to focus on developing technology for sweetgreen restaurants.

Downtown Crossing will always be a special place to us! We opened our door back in 2018 as a few fresh-faced college grads with an out-there dream to make healthy food more accessible through automation. We were different! But you gave us a shot and for that, we owe you so much.

With the closure of the downtown Boston restaurant, it’s worth speculating how much time remains for the remaining Spyce location. While I wouldn’t be surprised if Sweetgreen closed it as well, I can also see the company continuing to operate the Harvard located restaurant as a test-lab for potential new technology.

In the announcement about the acquisition, Sweetgreen said it was evaluating where and how it would integrate Spyce’s technology into its restaurants. It looks like that process is starting. The company indicates in the post that the existing team will be offered positions at the Harvard Square location or in a Sweetgreen location.

As for myself, I’m a bit bummed that we’ll be saying goodbye to this standalone Spyce location. I visited there with my son in 2018, and it was one of the highlights of our trip.

Sweetgreen Acquires Robot Restaurant Spyce

Salad chain Sweetgreen announced today it is acquiring the robot restaurant Spyce. The deal is expected to close in the third quarter, and terms were not disclosed.

Spyce was created by MIT alums and launched its first restaurant in the Spring of 2018, which grabbed headlines because of its use of robots to prepare each meal. The company partnered with chef Daniel Boulud to develop its menu and went on to raise nearly $25 million in funding. In November of last year Spyce re-launched itself, and introduced its new “Infinite Kitchen” robot, which allowed for more ingredient customization and could make 350 meals per hour. Spyce currently operates two locations in Massachusetts, one in Cambridge and one in Boston.

In the press announcement, Sweetgreen said Spyce’s automation technology will allow its workers to focus more on customers service, expand its menu into warm foods, and make meal preparation more consistent.

In June of this year, Sweetgreen confidentially filed to go public. CNBC today speculated that the acquisition of an automation company like Spyce could help Sweetgreen attract investors because the technology could help alleviate some of the labor shortage issues facing the restaurant industry at large.

Labor issues and the pandemic have accelerated interest in restaurant automation. In addition to robots being able to work around the clock without a break, robots don’t get sick and provide customers with a contactless food transaction. Sweetgreen’s acquisition comes less than a week after Creator, another robot-centered restaurant that has raised a fair amount of venture capital, re-opened its doors after being shut down by COVID last year. And just today, robot pizza maker, Piestro announced a partnership to deploy 3,600 units co-branded with pizza chain 800 Degrees over the next five years.

As the pandemic maintains a looming presence in our lives and automation technology matures, expect more announcements like this over the coming year.

The Restaurant Trash Problem Is Actually a Major Opportunity

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Here’s a small silver lining alert. The restaurant industry’s urgent shift to off-premises meal formats has created an urgent need to combat packaging waste. And people are finally starting to do something about it.

Let’s not sugar-coat the issue too much. Packaging waste is a major problem, one to which restaurants contribute greatly. Prior to the pandemic, some cities were taking steps to reduce or ban single-use plastics, and materials like polystyrene (aka Styrofoam) were out of vogue. All that changed when the pandemic forced the entire restaurant industry to rely on to-go orders for sales and regulations and company policies began banning the use of reusable containers for health and safety reasons.

In fairness to many restaurants, alternative forms of packaging (compostable, reusable, etc.) are expensive, and can even require operational changes for the staff. It should not be expected that these businesses suddenly come up with strategies for more eco-friendly packaging, particularly not at a time when many still struggle to keep the lights on and many more have shut down forever.

But those that can explore alternative packing options should, and of late we have seen some encouraging developments in this direction:

  • Last week, Just Salad announced its famed reusable bowl program would be available for digital orders. The company also highlighted, in its latest sustainability report, its Zero Waste delivery program, which integrates reusable packaging into the delivery order process.
  • Sweetgreen last week announced its plans to go carbon neutral by 2027. Details were pretty high-level, but the company already uses compostable packaging for its to-go orders, so it would not be surprising to see some additional developments in this area in the future. 
  • Just Salad was also in the news last month for the launch of its new meal kit service that’s free of both extraneous portion sizes and plastic packaging.
  • At the end of 2020, Burger King announced a partnership with circular packaging service Loop to pilot reusable food and beverage containers this year.
  • Ditto for McDonald’s, which struck a similar deal with Loop in the second half of 2020. The mega-chain has other circular solutions in place, too, like its Recup system in Germany.
  • There are plenty of other notable efforts being made here, from individual restaurants, like Zuni in California, to companies like NYC-based DeliverZero, which partners with restaurants to fulfill delivery meals with reusable containers. Additionally, Dishcraft Robotics lends some automation to the process of collecting and cleaning reusables at restaurants.

The bigger point here is that while we have a massive packaging problem on our hands right now, we also have a massive opportunity to change that and introduce new innovations in the process. Those innovations could simultaneously curb our single-use plastics problem while also addressing things like food quality, tamper-resistant packaging, and other elements that have surfaced over the last year. The public’s appetite for to-go orders is not going away. That means the opportunity to change our relationship to packaging is around for the long-haul, too.

Innovation won’t come as a one-takeout-box-to-rule-them-all format. Instead, what we’re more likely to see is collaboration among restaurants, material scientists, package designers, and many others. Nor will the issue be solved next week. Weaning an entire industry off single-use plastics will be a complex, costly undertaking that will probably meet a lot of resistance and a lot of failures.

None of that is a reason to ignore the packaging problem and opportunity. Based on developments from the above companies, many are already willing to start changing the system for everyone.

Restaurant Tech ‘Round the Web

White Castle’s recent ghost kitchen effort in Orlando generated so much demand the location had to close will not reopen until spring, when the chain finds a location better suited to meet that demand.

Food delivery search engine MealMe has closed a $900,000 pre-seed round led by Palm Drive Capital. Slow Ventures and CP Ventures also participated in the round.

For the second year in a row, the National Restaurant Association’s annual conference is cancelled due to COVID-19. Instead, the Association will host a series of virtual events throughout the rest of 2021.

Sweetgreen to Go Carbon Neutral by 2027

Fast-casual chain Sweetgreen announced today that it plans to make its business carbon neutral by 2027. The company says it will achieve this through its decisions around ingredient sourcing, building design, and energy usage, among other things. 

To reach this goal, Sweetgreen worked with climate-focused company Watershed, which makes software that can measure a business’s carbon footprint across every single touchpoint. Sweetgreen built its action plan for going carbon neutral around the results of that exercise.

For example, the company commissioned carbon assessments of its ingredient suppliers to get some of the more fine-print details, such as how the supplier handles manure and how much feed it uses. These calculations were included in Sweetgreen’s overall measurement of its own business. Going forward, the numbers will inform sourcing decisions (Sweetgreen did not share actual data). Ditto for menu development, which goes hand-in-hand with ingredient sourcing. Sweetgreen said today that it will introduce “even more plant-forward salads and soil-friendly ingredients” to its menu. 

The company also said it is “conducting an entire assessment” of the research and development process around new physical stores, from building materials used to furniture to finding more efficient means of energy. 

The details of how Sweetgreen plans to achieve some of these goals, and what its stores will look like as the company treks towards them, are not yet extensively available. How, for example, will the company integrate its carbon neutrality goals into its new drive-in store format? How will the Sweetgreen menu change based on the chain’s suppliers?

The company said in today’s press release it will share more progress as it happens.

Sweetgreen to Launch a ‘Drive-In’ Store Format in 2021

Sweetgreen joins the ranks of restaurants reformatting their store concepts to accommodate more off-premises operations. The fast-casual chain announced today it will open its first “drive-in” restaurant, the company’s own take on the drive-thru format.

According to sweetgreen materials sent to The Spoon, the new store, set to open in 2021 in Highlands Ranch, Colorado, will focus on digital orders placed via the sweetgreen app. Off-premises formats will include a traditional drive-thru lane “for optimized digital pickup” as well as a drive-in area where customers can park and are attended by a dedicated “concierge.” 

Based on the information sweetgreen provided, the new store format looks to be all about keeping customers in their cars. The company said the Highlands Ranch location “allows guests to access sweetgreen without ever having to leave their vehicle,” and that it provides a glimpse of what’s happening in the kitchen without requiring customers to ever enter the store. Large windows will look into the restaurant’s food prep space so customers can watch as the staff prepares orders. The company did not explicitly say whether there is any indoor dining attached to this location, though there does not appear to be based on the information sweetgreen provided. A small patio will provide some outdoor seating.

The pandemic has accelerated moves by fast-casual and QSR restaurants to revamp their store formats to cater to more to-go and delivery orders. McDonald’s, Burger King, El Pollo Loco, and Chipotle are just a few of the major names on the list. But sweetgreen said the plan to evolve its physical store format was in motion before COVID-19, citing the chain’s digital growth (more than 50 percent of orders are placed digitally) as the big driver.

Sweetgreen said it is already looking to expand this format to other parts of the country once the Highlands Ranch location is open. That includes expansion to new suburban areas of the U.S. in addition to the urban centers where the brand is best known. 

SKS 2020 Day Three: Food Robots, Ghost Kitchens & a Tour of the Modernist Cuisine Kitchen

Yesterday at SKS was jam-packed with great insights and conversation.

Novameat printed meat for us, we learned Pat Brown believes cell-based meat will never be a thing, and Eat Just CEO Josh Tetrick outlined a four-phase plan to bring — you guessed it — cell-based meat to market. We also heard from Wired’s Joe Ray and ATK’s Lisa McManus on the proper way to use tech in the kitchen and headed into the labs, homes and headquarters of our Startup Showcase finalists to see what they’re building.

And we’re not done! Here’s what we have lined up for our final day of SKS 2020 Virtual:

Building Resiliency in Restaurants with Tech: We catch up with the leaders of Sweetgreen, Galley Solutions and Leanpath to hear how restaurants are using tech to build more resilient businesses during the pandemic.

The Online Grocery Explosion: Wall Street Journal’s Wilson Rothman talks to Shipt CEO Kelly Caruso about the changing nature of online grocery in 2020 and where it’s going in the future.

I, Restaurant: Chris Albrecht will sit down with the CEOs of Picnic, DishCraft and Bear Robotics to see how the adoption of robotics and automation is changing restaurants in the front and back of house.

The DoorDash Playbook: Brita Rosenheim will talk with DoorDash’s Tom Pickett about lessons learned and new opportunities in the food delivery market.

Ghost Kitchens Everywhere: Jenn Marston will talk with ghost kitchen and virtual restaurant experts about strategies for navigatng this red-hot market.

The OG in Molecular Gastronomy: We just added a early-day debut of my conversation with the guy who kicked off the molecular gastronomy revolution, Harold McGee, about his new book on smells and the state of cooking innovation. (Hint: he’s more excited about some other things going on in food innovation happening outside of the kitchen.)

Let’s Head Into the Modernist Kitchen: Speaking of molecular gastronomy, we’re getting a guided tour of the Modernist Cuisine by head chef Francisco Migoya.

Plus a whole lot more. (See schedule here.)

If you’d like to attend day three, you’re in luck! We’re offering a discounted day three ticket that gets you full access. See all the sessions, network with the community and more for just $99.

Fight Club: Mischief. Mayhem. Third-Party Delivery Fee Caps.

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If you like a good fight, the one around restaurant commission fee caps is worth watching. I spent the better part of three-plus hours the other day tuned into the New York City Council’s Committee on Consumer Affairs and Business Licensing public hearing. One hotly debated topic was around capping commission fees third-party delivery services like Grubhub and Uber Eats charge restaurants.

I’d love to say everything got resolved and NYC will be placing caps on third-party service commission fees for all time. The reality is that this fight was here long before the pandemic and will be around long after it leaves.

I’m sure you’ve heard of the brouhaha brewing around the issue. Restaurant industry advocates and businesses alike had flagged those third-party delivery commission fees — which can go as high as 30 percent per transaction — as prohibitively expensive for restaurants. With dining rooms closed now, most restaurants are left with the options of either shutting down completely or relying on a third-party service like Grubhub to help them execute on delivery orders.

One restauranteur who testified at this week’s hearing explained that for independent restaurants, the fees are more or less non-negotiable. (Side note: he also expressed fear of retaliation from delivery companies for his speaking at the hearing.) Jessica Lappin, a former NYC council member and the President of the Alliance for Downtown New York, said that even if restaurants are doing takeout and delivery right now, they are doing it at a loss. Council member Mark Gjonaj suggested that due to the commission fees, each transaction a restaurant makes is “yielding a net loss.”

Perhaps the most telling moment came when a Grubhub representative took to the mic to “express Grubhub’s strong opposition” to fee caps. You can watch the entire (and rather circular) debate that broke out here, but it more or less boiled down to the idea that if NYC and other cities successfully impose fee caps, Grubhub et al. will have to change their business model.

Therein lies the marrow of the matter in terms of why third-party delivery companies oppose commission fee caps and other changes (e.g., reclassifying workers as employees). Government oversight of those fees cost these companies more money, and further erode their chances of ever becoming profitable. An unprofitable model won’t satisfy investors, and third-party delivery as we know it would then be on the rocks.

Sky-high delivery fees and a faltering economy won’t help the model in terms of its attraction to the average end consumer. And they certainly won’t improve the net-negative returns restaurants are making at the moment.

In some cities, Big Government has already stepped in. San Francisco, Seattle, and Chicago have all introduced fee caps that will last at least as long as dining rooms remain closed. Los Angeles is considering a similar measure. NYC’s proposed 10 percent cap was actually introduced months before the novel coronavirus hit the U.S. in full force. 

As emergency measures, these fee caps feel necessary right now if independent restaurants are to have any kind of shot at keeping the lights on. Longer term, everyone (restaurants, advocates, government, tech companies, and consumers) will have a responsibility to address how much damage the delivery model is actually doing. It seems a global pandemic that’s taking lives and shuttering businesses isn’t enough to make some of these services stop siphoning the livelihood from restaurants. Are those really the businesses we want calling the shots in the restaurant industry in the future?

McDonald’s limited menu is good news for the drive-thru lane.

Among other things, like drive-thru lanes generating more sales, McDonald’s spent quite a bit of its earnings call this week talking about its menu. Since shelter-in-place orders forced the chain to close down dining rooms and rely on off-premises orders, McDonald’s has been offering a limited menu. For example, it doesn’t offer breakfast for the time being.

Cuts like that were made to help the mega-chain manage the operational difficulties restaurants face right now. On this week’s call, CEO Chris Kempczinski suggested customers should not expect every McDonald’s in the nation to immediately revert back to its pre-pandemic menu.

Smaller menus for the long term could work in McDonald’s favor, though. When we looked at the QSR Drive-Thru Study last year, one of the standout points was the steady increase in drive-thru wait times over the last couple decades. Growing right alongside those wait times has been the number of items QSRs offer on their menus.

These complex menus take longer to read, present customers with the tyranny of too many choices, and up the risk of an order being inaccurate when it is ready. None of those things make for speedy service, and with more customers likely going to opt for the drive-thru lane over the dining room now, finding ways to fulfill orders faster is crucial for QSRs.

No one is suggesting we revert back to my favorite picture of all time, this McDonald’s menu from the ’80s. But as restaurants pare down menus and plan to work with reduced capacity and limited staff once they reopen, the bloated mess of choices QSR’s previously offered may become a thing of the past.

Sweetgreen just added dinner options.

One company not paring down its menu is Sweetgreen. On LinkedIn this week, cofounder and Chief Brand Officer Nathaniel Ru unveiled the chain’s new dinner menu, called Plates.

For the last four weeks, the tech-forward fast-casual chain — most widely known for its highly Instagrammable salads — has been testing a Sweetgreen dinner menu. Via a post on Medium, the company said the process has been about “operationalizing an entirely novel concept (normally a year-long process) in just 30 socially distant days.”

That 30-day process looks, from the photos, to have turned up a menu full of plant-centric dishes and lots of legumes, grains, and sauces. If you want more details around how the team put this new concept together, the full Medium post is definitely worth a read.

Sweetgreen had been planning the dinner concept for some time in the hopes of launching it next year. But, as the Medium post notes, “given the current state of uncertainty, the need for warm, familial, and home-cooked food has never felt more important.” 

They’re right on the money. Family-style meals and comfort food are two major trends right now for restaurants as people shelter in place. I’ve never considered couscous and warm leafy greens comfort food, but I’m from rural(ish) Tennessee so what do I know? Plenty of folks are health conscious these days, and with many consumers likely to be wary for some time about going out to eat, a dinner concept is a smart play for Sweetgreen. 

Now if we could just get it delivered without those pesky commission fees. 

Report: Sweetgreen Lays Off 10% of HQ Staff

It’s confirmed: The COVID-19 pandemic has forced tech-forward fresh food restaurant chain Sweetgreen to reduce headcount.

According to a report on LA-centric new site dot.LA, the company is laying off approximately 10% of its 350 person HQ staff.

The Spoon was the first to report of potential layoffs a couple of weeks ago when I got wind of some reductions-in-force whispers and had confirmed the departure of the company’s head of automation Derek Pietz and director of engineering Ken Cottle. With this news, Dot.LA was able to confirm that the layoffs were much broader than just the tech team and started in late March. From the report:

“Dozens of terminated workers were read a pre-written script at the end of last month and were then logged-out of their Slack and email accounts. “They blindsided us and they weren’t transparent,” said a former employee, who declined to be identified because Sweetgreen made him sign a nondisclosure agreement. “It was disappointing to have five years of the company end like that.”

It’s too soon to tell what things will look like on the other side of the pandemic. Sweetgreen, like many restaurants, has pivoted to help where they can, but also has had to halt parts of their normal operations. The company, which raised $150 million in fresh funding last fall, is likely paring back to lower its cash burn rate.

We’ll continue to keep an eye on this story as it unfolds.