Sweetgreen has a Monday and Friday problem.
The salad-and-grain-bowl chain was riding high pre-pandemic as increasing numbers of office workers relied on it for their daily desk salads. At the time, the company’s free office-building delivery program, called Outpost, was helping it win the salad wars by targeting white-collar workers. When the pandemic hit, those workers stayed home. They’re now back in the office—but often only for a few days a week.
The salad chain, which went public in 2021, brought in a record $470.1 million in revenue last year. But its net losses also grew to $190.4 million, compared with $153.2 the year earlier. To achieve profitability, Sweetgreen needs its already remarkably loyal customers to double down on their loyalty.
The company unveiled one solution today: a revamp to its Sweetpass loyalty program that incentivizes diners to order more frequently, try new things, and even consider eating at off-peak times, like dinner.
The free-to-join program includes a paid subscription tier, Sweetgreen+, that costs $10 a month. In exchange, customers get $3 off each order—a proposition that pays off if they order at least four times a month. Other perks to the paid tier include one free delivery a month at dinnertime, priority access to the support team, and early access to merch drops.
Prior to 2020, Sweetgreen rewarded customers with a free bowl after every ten meals. Chief brand officer Nathaniel Ru says the company designed the new Sweetpass program to establish a deeper connection with its customers. “We wanted to find a way to reward loyalty behavior versus discount behavior,” he says.
When the company ran a trial of the subscription last January in Washington D.C. and some markets in Texas, and Colorado, it received some 16,000 sign-ups in a month. The subscription recalls the loyalty programs now offered by coffee chains like Blank Street ($12 a-week, for coffee or a soft beverage once every two hours) and Pret-a-Manger, which offers customers up to 5 drinks a day for a monthly fee. Panera and Au Bon Pain have also been offering similar monthly plans for beverage subscriptions. Sweetgreen is the first to apply this model to food.
To nudge customers toward different buying habits, Sweetgreen also added gamified aspects to both the free and paid tiers of Sweetpass. Customers with the Sweetpass app are offered ever-changing daily discounts that can often only be applied at a specific time. “If we know somebody comes for lunch a lot, how do we also find ways to get them to come for dinner or incentivize different behavior based on ordering habits?” Ru says.
Last week, the company began running a program via Sweetpass where customers could buy one Chipotle Chicken Bowl and get another 50% off. Other challenges might include spending $25 in one transaction to get $5 off, or try two new seasonal bowls to get a third one free.
Ru says that the company is also looking to grow demand for its dinner offerings. He cites Plates, an initiative Sweetgreen launched during the pandemic to provide bigger, heartier meals to families. “We look at dinner as a big opportunity.” Currently 65% of Sweetgreen’s business happens at lunchtime. Ru also points out that during the pandemic, the company expanded its retail footprint into the more suburban areas of Minneapolis, Tampa, and Houston.
Along with the new loyalty programs, the company is launching a merch store with clothing and accessories inspired by the brand. Sweetgreen has a long history of dabbling lifestyle branding. It used to host an annual Sweetlife food and music festival, with acts such as Solange and Kendrick Lamar (who created a “Beets Don’t Kale My Vibe” salad), and it frequently works with celebrity chefs on special-edition menu items.
Ru says that Sweetgreen wants to introduce more collaborations with brands and popular creators—and launch them in a similar way to limited-edition sneaker drops. “The message we got from our customers is that people wanted to be part of the lifestyle,” Ru says. “We get photos from vintage markets in Japan where they are selling Sweetgreen hats and T-shirts.”
With the launch of the updated Sweetpass, the company is also trying to reach customers in a new way, using influencers. Sweetgreen engaged TikToker Vivian Tu, who goes by @your.richbff and offers financial advice to young people, to unveil Sweetpass on social media. The hope is that Tu’s lessons on how to maximize the value of Sweetpass could help Sweetgreen maximize the value of its customers.
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