754 Nicolas Jammet: Co-Founder & Chief Concept Officer of Sweetgreen

0:00Kara Goldin:I am unwilling to give up, but I will start over from scratch as many times as it takes to get where I want to be. You just want to make sure you will get knocked down, but just make sure you don't get knocked out. So your only choice should be, go focus on what you can control. Hi everyone and welcome to the Kara Goldin Show. Join me each week for inspiring conversations with some of the world's greatest leaders. We'll talk with founders, entrepreneurs, CEOs, and really some of the most interesting people of our time. Can't wait to get started. Let's go. Let's go. Hi, everyone, and welcome back to The Kara Golden Show.

0:44Kara Goldin:Today, I'm thrilled to be joined by a co-founder of one of my favorite brands, something that is absolutely delicious, in case you are wondering what that is. It is called Sweet Green. And I am joined by Nicholas Jemais, who is the co-founder and chief concept officer of this incredible brand called Sweet Green, the mission-driven restaurant brand that has completely redefined what fast food can be. So back in 2007, Nicholas and his co-founders opened their first Sweet Green in Georgetown, just three months after college, with little experience, but a big vision. And they set out to make healthy food not only accessible, but crave worthy.

1:32Kara Goldin:And in doing so, they pioneered an entirely new category. Today, Sweet Green is a public company, has grown into a nationally recognized brand with hundreds of locations, beloved consumers, as I am, and has been recognized by many, many incredible awards in publication and more as one of the most creative and innovative thinking companies in the industry. So I can't wait to dive into the early years and hear directly from Nicholas how this all came about and talk just about what it's like to build a powerhouse company as he has. So Nicholas, welcome to the show. Super excited to have you. Thanks for having me.

2:19Kara Goldin:Absolutely. So So let's start at the beginning. So, well, actually, even before we get into sort of the story, I'd love for you to define Sweetgreen. I made an attempt at it because I'm such a big fan, but I'd love to hear how you define it. Yeah, you did a great job. You know, I would say when we started Sweetgreen, the idea was to really reimagine and redefine what a fast food restaurant could look like. And as we set out to build that and wrote the business plan that ultimately opened a few, you know, the vision and the idea got even bigger. It was to kind of build the next great American fast food brand that rethought so much of the food journey from what we're sourcing, from who we're sourcing, how it's being grown, to how we're prepping it, to the ingredients that go into your food, to the transparency around all of that and the storytelling, and then ultimately creating a brand and a story around those things that create a lot of desire for the product.

3:13So, you know, it was kind of just really imagining a whole new fast food model.

3:18Kara Goldin:You guys have just done such a great job. I remember your first location in DC, we were doing some work out there and I was like, wait, what is this? And as I mentioned before, Ted Leonsis had been an investor in a company that I was at back in the early days. And the friend that I was with knew Ted and said, oh, that's one of these companies that Ted just invested in and anything that Ted touches, I am most interested in. And I know he was an early investor in Sweetgreen, but you started just a few months after graduating from college. What were you thinking? You know, my two co-founders and I, Jonathan and Nathaniel, all had parents that were entrepreneurs that were all immigrants.

4:08So we grew up with that experience and that background of just seeing our parents work really hard building something themselves. And when we were seniors at Georgetown, we had this common conversation, this daily conversation around, what are we going to eat today? Nothing really checks the boxes. Nothing makes us feel good. And we knew that the conversation on food was starting to shift. And so we wanted to create that option. So honestly, in the beginning, we were just building it for ourselves. We were the customers. And we knew this should exist, especially in Georgetown and probably in DC.

4:43We quickly realized this was an opportunity beyond DC and that we want to kind of tackle the whole industry. And so early on, you know, as seniors, we had a lot of energy and wanted to build this. We wrote a business plan, raised$350 ,000 our senior year from anyone that would talk to us. Professors, old bosses, you know, friends, raising five grand at a time. And we finally opened it, you know, two months after graduation.

5:10Kara Goldin:That's wild. So how many did you start off with? Just one location? Just one. And we had one for the first, you know, almost two years. And we learned a lot about the model. And then we opened two more in 2009. And then we started adding more and more each year. Today, we're at almost 270 restaurants in 27 states. In those early days, you know, you're looking at the business, trying to really figure out what it is that you have there. You're seeing that people are enjoying it. But how did you have the courage to actually go out, raise more capital, decide to go outside of your familiar territory of Georgetown and really blow it up?

5:56You know, I would say the courage came from just having the conviction and the belief in what we were trying to build. And we knew ourselves as customers and our friends and what we believe the next generation of consumers wanted an option like this. And this was going to be how people thought about food. And you have to remember in 2007, the conversation on food was very different. You know, Michael Pollan's books were just kind of coming out and getting a lot of popularity, super-sized me documentary that created a lot of conversation around the connection between food and health. You know, in 2008, the Obamas came into the White House and Michelle Obama started talking a ton about health.

6:35And so the conversation was shifting. So we had the right belief at the right time. and ultimately we got really excited about building a brand and experience around that kind of food. So from the beginning, our message was never, let's be healthy and eat your veggies to our customers. It was, look at this cool place that is telling cool stories and has a great design and the food is delicious and it happens to be healthy. But we wanted to really create a brand that could create desire for this type of product.

7:07Kara Goldin:Was there any item in there that, that just didn't work that you were surprised about? Or was there something that really did work that you were like, Oh, wow, like, I can't believe it's, you know, lost leader for for a lack of a better term? Yeah. You know, early on, and I would say over the course of our 18 year history, we have tried a lot of things on our menu, always rooted in the food ethos and the way we source and the way we prep, which really sets us apart from others in the industry. But, you know, we've tried a lot of things in our menu that have worked or haven't worked or things that we've just evolved away from over time as we wanted to evolve to new things.

7:50We were very early in our space to have online ordering and digital ordering with an app. And so just creating that sense of convenience and removing friction for the guests to us, that was so important. And I remember actually Steve Case, you know, early on when we were launching the app, he said, you know, before you know it, this will be over 50 % of your business. And we thought that was crazy. And it became, you know, over 50 % of our business. So Steve was right. So yeah, you know, we've tried a lot of things and a lot of things work and some things don't, but we try to really learn from the ones that don't.

8:24Kara Goldin:What was the hardest market for you to go into and penetrate? You know, a lot of the markets we entered had different types of challenges. When we finally were ready for New York in 2013, so six years in, we had 20 restaurants in the broader DC, Virginia, Maryland, and Philly area. going to New York was a challenge because we knew that it was you know obviously the big city and there's lots of competition and we wanted to really present ourselves and introduce the brand the right way to show all the differentiation and so we worked really hard at that and we've since now you know expanded quite quite a bit in New York City and it's a great market for us outside of that you know just we're always kind of students of each market in each city in each community so opening sweet green in texas we were really nervous about for many years um but we really did our research for everything from what we're sourcing what's on the menu how we build the restaurants how we talk to customers there um and um so lots of great lessons there but i would say new york is there was like the big mountain that we climbed when we opened there that was definitely when we were building hint i would say that that's probably the the one that we uh underestimated i I think you just need a lot of people more than anything else as it relates to the beverage business.

9:49Kara Goldin:But how important is location? I would imagine finding the right location is so, so key. You probably have so many people reaching out to you saying, you should open one by us. But you have decisions to make based on real estate. And we've had many guests on who have talked about how critical real estate is. And sometimes it's tricky because it might not work in a certain location. And, you know, if you're too early, maybe that's, you know, part of it. Right. And we've had other people talk about being around other brands that are sort of like minded, I guess, is also key. I'd love to hear your perspective.

10:32Yeah, you know, I would say real estate site selection might be one of the most important things we do at Sweetgreen. You know, nothing works better than A-plus real estate. And we've learned that the easy way and hard way many times over the years. And I think what it takes is really making sure that when you are picking real estate in a certain city, that you develop a deep sense of the customer in that city and just how that city moves and behaves and what the neighborhoods mean. And so that local knowledge, that local relevance is really important. A lot of times that means us just really understanding a city.

11:08You know, I'm born and raised in New York, so I understood New York very deeply. And I knew that, okay, here we'd have in this neighborhood, we should be on this block. In this neighborhood, we can be off a block or two because there's all this new development happening over here. And then we really lean on our real estate brokers and partners in some of these other cities to really become experts in these cities. And then we have a real estate team, obviously, that knows these cities in and out. So, but, you know, picking a site, it can be, you know, you can be on the best block, but on the wrong side of the street, you can be, you can be on the best street, but on the wrong side.

11:43And, you know, even thinking about what side of the street gets the sunlight at certain times, who your co-tenants are, who there's all these factors that we try to, you know, really understand that goes into picking great real estate. So there's a lot of art and science. Definitely.

11:58Kara Goldin:I read that in the first few months of launching Sweetgreen, you came really close to shutting down. Can you talk about that story? Yes. So our first restaurant was tiny, was 560 square feet. And it was right near Georgetown University. So when the winter hit and school and students went home, our business just kind of came to a screeching halt. And we were still fairly young. We had opened in August, but that first winter was pretty dire. And there were some moments where we'd look at ourselves and be like, Like, is this going to work? And then we really started to try to say, okay, like, why isn't this working right now?

12:41What do we need to do? And we really analyzed everything from, again, our real estate to how we built the location, the size of it, to the menu, to, you know, all the things to make sure that if we were to build a second one, how can we take these lessons, apply them and see if the model works? And so the next two that opened, one didn't work as well and one worked incredibly well. And so we started to really understand our model. And so much in the early life cycle of building a retail or restaurant business, especially if it's your first time and you're doing something kind of new, so much of it is learning the model.

13:16What works? What kind of experience does the customer respond well to? What products are selling? What's the labor model? It's all these different factors that go into like, okay, this is the model. Yeah, definitely.

13:30Kara Goldin:Definitely. So it seems like from day one, and maybe you didn't articulate this with that first restaurant, but community has just been such a part of your brand. And today, community is something that I think people talk about, maybe talk about even more as we need more of it, particularly for communities that maybe aren't necessarily going into an office. And, you know, there's lots of discussions around that. But how did you build that into the DNA of the brand? I mean, did you realize it or how did you guys start thinking about community and how did you activate that even more? Yeah, it's a great question.

14:20And I'll say in the beginning, it just felt very natural to us. It's how we wanted to build the brand and create awareness and welcome people into the sweet green world. And then as we started to open, you know, more and more restaurants and open in more and more neighborhoods, we realized, you know, this idea of building community was what's driving our business. And how do we really codify that and understand it so that we can drive it even more? and you know for so much of our life at sweetgreen honestly a lot of our marketing and brand efforts and spend so much of it has been heavily weighted especially in the early days to community building and experiential you know bringing our customers and our community together to celebrate food everything from you know hosting dinners on our on the farms that we source from with our customers to throwing you know at the time one of the northeast's biggest music and food festivals There was this idea that we wanted to bring people together around food and just make people feel like they were part of the Sweetgreen community and Sweetgreen world.

15:18I think to your point, it worked really well for us. But today, I think it's more important than ever in this post-COVID world. Just the idea of coming together and being with, you know, new people or like-minded people in a community is really important.

15:31Kara Goldin:Yeah, definitely. So how did you balance innovation with the need for standardization as you scaled? I mean, as you're going from one restaurant, you talked a bit about, you know, the quality of the food, but there's more than even that behind the scenes that is so, so critical, the standardized. So how did you balance that? Yeah. You know, it's a constant balance that even today we're still very focused on. You know, at the end of the day, there's nothing more important than really great execution in our restaurants and making sure that the standards we have, that we're following them, that we're cooking things the right way, sourcing things the right way.

16:11So, you know, the execution is really critical. At the same time, we spend a lot of time trying to understand and think about where the world is going, where our customer is going, where the conversation on food is going, and how we should evolve and innovate our product and our experience in that context. And so, you know, we have a brilliant marketing and brand team that spends a lot of time listening and talking to our customers and getting really great consumer insights. And then just based on even our understanding or beliefs in the world, it's kind of this mixture of art and science. We start to think about, OK, what can we do to better serve our customers or what do we think would really excite new customers to come into the sweet green world?

16:50And so, you know, then we have a now more rigorous than ever testing process around how we ideate something, develop it, test it, bigger, you know, a bigger test and then ultimately launch it for our customers.

17:02Kara Goldin:So you talked a bit about the technology, the online ordering, and how that was definitely a key to growth for the company. I would imagine that other technology has been super core to Sweet Greens in your, I always call it the timeline as you map it out. But what role has tech played in really shaping your growth? I mean, you were just starting a healthy restaurant. That was the concept and the idea. And all of a sudden, you've got a lot of other things that are really critical, the obvious ones around digital ordering are obvious maybe to some of us, but also personalization and so much around technology that I think in any successful company, today they have to, or I should say it has impact, but I'd love to hear what you think.

17:59Yeah, I would say that, you know, the technology as part of our experience has been a core part of our growth the last 17 years. You know, very early on, as we really, you know, we just opened a restaurant with very little technology, just the POS. And then as we really started to understand the consumer, where they were going, you know, what they wanted in an experience how the rest of their behaviors and transactions were evolving in their life. We really believed that it was an opportunity to create a whole different level of convenience using technology in our experience. So just this idea of like ordering your bowl ahead and having it be ready for you when you want to pick up.

18:37And I think the consumer shifted a lot because when we first opened, customers would say, oh, wow, this place opened up three blocks away. and I just have to walk there and only wait 10 minutes in line and then walk back to my office and I have this healthy meal. How convenient. Fast forward five or six years, the consumer's like, I have to walk three blocks away. I have to wait in this line. It's like, I don't have time. And so I think their expectations shifted. And so the idea of having a sweet green app, and especially if you're a frequent user and being able to just go on and hit, you know, order my favorite for lunch tomorrow at noon and just walk in and pick it up and walk back or eventually have it delivered, obviously.

19:15That removal of friction made it even easier for our super users and our most frequent customers to just interact with Sweetgreen and use it almost like a utility. And so for us, we realized and believed that's where the consumer was going to go. So as it relates to the experience and leveraging technology, that was a huge part of our evolution. And then, you know, we obviously spent a lot of time innovating on our menu in terms of what we're serving, flavors, telling stories around our food ethos with different chefs and partners. And so we spent a lot of time trying to balance innovation both on product and on experience.

19:50Kara Goldin:Is your menu consistent across the U.S.? Do you have certain things that maybe work on the East Coast or in one location, but just there's no way we could launch it there? Our menu is consistent. A lot of times where we source things will change regionally, obviously. based on the seasons and based on, you know, our seasonal menu that changes five times a year. You know, something that's interesting about Sweetgreen that is unlike other folks in the industry is we have this seasonal menu that changes, you know, up to five times a year. And that means we're working with growers and farmers and food partners to source things at peak freshness and for a limited time and then tell that story.

20:32So, you know, when peach season hits, we are buying peaches from some of the greatest growers in the country. In California, and you might know them, we're buying from Frog's Hollow Farms for all of California, which is probably the most premier stone fruit grower in the country. And so we're really proud of that. We think it tastes the best and that's why we do it. And so ultimately, you know, building a system around that. And then, you know, the other parts of our foodie that are pretty different than folks in the industry is looking everything at, you know, from the oils we're using, you know, not using seed oils in our cooking, to really making sure there's no preservatives, natural artificial dyes or colors or all these things that generally find themselves in our food.

21:14And for us, the focus has been on having really clean ingredients and making them delicious and then telling stories around them.

21:20Kara Goldin:I love it. So for any business, profitability and more profitability is so, so key. And obviously, quality, particularly when you're building a brand around not just taste, but also really quality food, including as you were just describing it. At what point do you, like, how do you weigh that in terms of costs? Like maybe the consumer, I mean, the consumer always wants things less expensive, right? I mean, it's just they're never going to tell you that, you know, no, it's just fine. Every, you know, you can keep charging me more money. But at the end of the day, you know, it's I'm sure, especially being a public company, there's always this struggle, right?

22:12Kara Goldin:There's investors that are saying we should drop the prices. But again, it's your ethos and what you're really known for is this quality as well. So how do you like, how do you think about that? Yeah, it's a great question. And it's certainly something that, you know, is a daily challenge. And for us, as we think about, you know, really maintaining what makes Sweetgreen and the product different and special and what differentiates us. At the same time, the reality that, you know, this is a for-profit business and, you know, we're big believers in conscious capitalism and we're a public company.

22:48So really making sure that we can execute and, you know, have a sound financial plan and then hit those numbers is really important. At the same time, we try to stay very focused on the long term and understand, you know, the investments we're making in our customer experience, in our customer relationships, making sure that those are sustainable. and then you know I would say in a more specific sense we spend a lot of time talking about price value and so you know there's a pricing strategy but then there's also the broader price value equation so it's important for us to have a range of prices and some entry point prices so that there is something for everyone but at the same time it's also really important for us to if we do believe these things in our food ethos and we want to spend our dollars and invest in the food system that we get credit for and that we make sure our customers understand that when you're coming to Sweetgreen, you're getting chicken that has no antibiotics, which is different than almost every other fast food place out there, that we're not using certain kinds of oils, that we're sourcing organic, you know, a lot of organic veggies, all these things that really matter to a lot of consumers.

23:54And so it's really important for us to make sure we're telling that story. And at the same time, you know, we spend a lot of time on the consumer insights, It's understanding what does the customer value so that we can really line up what we think is important and what the customer values and where those two intersect is where we want to play. Definitely.

24:11Kara Goldin:So as more players enter the healthy, fast, casual space, I'm sure whether it's nationally or regionally, you definitely have seen competition. How do you stay differentiated while maintaining all of those things that you have to do, including profitability, including the brand and everything that it stands for? you know it's been exciting to see competition arise in a way because philosophically we started sweet green to ultimately change the food system and we know to do that we can't be the only ones doing things so to see other folks kind of growing and creating options for our customer uh is a great thing it kind of validates the consumer uh you know need state around um where food is going um so yeah we try to we try to make sure that in a sea of competition that we really own and protect what makes Sweetgreen special.

25:08And so for us, so much of that is our food ethos and our supply chain and our approach to telling stories and food with really great partners. And so, and, you know, I would say part of that food ethos that is really interesting is this idea of, you know, the amount of scratch cooking that we do in our restaurants. So we, I would say, do more scratch cooking than pretty much anyone in our space at scale. And so, and we think our customers can taste the difference. And so protecting things like that and then showcasing them and telling that, you know, making sure our customers see that is really important.