Home Business Salad and Go expands as it competes with Sweetgreen

Salad and Go expands as it competes with Sweetgreen

by SuperiorInvest

The vehicle entrance to a Salad and Go location.

Via Salad and that’s it

When sweet green went public two years ago, co-founder and CEO Jonathan Neman said the salad chain aspired to be the “McDonald’s of his generation.”

But another salad rival could beat out Sweetgreen: Salad and Go.

Founded in 2013, the new chain is closing in on its publicly traded rival’s number of stores, with more than 100 locations and counting. Backed by private equity firm Volt Investment, it has ambitious expansion plans for 2024 beyond its roots in the south west.

Salad and Go’s appeal is largely due to its affordability. One of their 48-ounce salads costs less than $7 and comes with chicken or tofu, while a comparable salad from Sweetgreen costs about $12.

As the chain charts an ambitious expansion path, its C-suite is packed with restaurant industry veterans, including former wings stop CEO Charlie Morrison. He joined Salad and Go’s board of directors in 2020. Two years later, Morrison took over as CEO, leaving Wall Street’s favorite chicken wing chain after a decade in favor of a little-known salad chain that at the time it only had 50 locations.

“The brand was designed around the idea of ​​completely rebuilding the supply chain and fixing what I think is broken today,” Morrison said at the ICR Annual Conference earlier this month.

Since Morrison became CEO, Salad and Go has more than doubled its footprint, which now has about 130 locations in Arizona, Nevada, Oklahoma and Texas. Last year, the chain opened about one restaurant each week and plans to maintain that pace in 2024 and enter new markets such as Southern California. For reference, Sweetgreen has 220 locations open as of September 24.

Morrison said the company is currently profitable in “established, mature markets.”

How Salad and Go works

A salad or wrap from Salad and Go begins in one of the chain’s kitchens, where its products are washed and its proteins are prepared. Those ingredients are then shipped to their 750-square-foot locations, which are about the same size as a typical restaurant kitchen. Restaurants have drive-thru lanes, but no indoor seating.

Its small footprint has helped the chain expand rapidly with relatively low rents. Other industry disruptors, such as ghost kitchens and coffee startup Blank Street Coffee, have used a similar real estate strategy to reduce overall costs.

Salad and Go customers place orders online or in those drive-thru lanes, and a team of two employees prepares their custom salads and wraps.

The restaurant’s streamlined kitchen features a walk-in cooler and refrigeration counters beneath the manufacturing lines where workers prepare orders. Some ingredients, such as eggs for breakfast burritos and avocados for salads, are prepared on site rather than in commissaries.

But Salad and Go locations lack the freezers, grills, fryers, exhaust hoods and fire suppression systems that typical fast-food restaurants need, and are often guilty of delays as locations wait for equipment inspections before opening.

On average, a Salad and Go customer leaves the drive-thru line in less than four minutes, according to Morrison. Increasingly, your customers are picking up orders for more than a single meal.

“The unique thing about Salad and Go compared to any other [quick-service restaurant] “You can show up at 6:30 in the morning and have your breakfast burrito, your hot or cold coffee, and your salad for lunch during the same occasion.”

Replace burgers, not salads

Charlie Morrison, CEO of Salad and Go, speaking on CNBC’s “Power Lunch” in Englewood Cliffs, New Jersey, on December 5, 2023.

Adam Jeffery | CNBC

As Salad and Go enters new territory, Morrison is confident the chain’s salads will have universal appeal.

“We’ve been able to place these stores in differentiated markets, with different income levels, different levels of diversity, different focal points, and we found that great performance to be pretty consistent,” Morrison said.

Salad and Go’s first customers in a new market tend to be regular salad eaters anyway, but Morrison said the chain has also been able to attract other consumers thanks to its cheap prices and tasty food.

“What we see with our fans, with our guests, is a very strong loyalty and affinity,” Salad and Go marketing director Nicole Portwood told CNBC.

Portwood previously helped turn Tito’s Handmade Vodka from a craft distiller to the country’s most popular vodka. Like Morrison, she started at Salad and Go as a member of its board of directors before being named CMO in October.

Other salad players, such as Sweetgreen, Just Salad or Salata, are often in the same markets as Salad and Go. Salad and Go isn’t the only chain prioritizing convenience for customers on the go. Sweetgreen has been opening restaurants with drive-thru lanes dedicated to digital ordering.

But Morrison told CNBC that the network doesn’t care about those options, which typically charge at least double what his company charges for its healthy fare.

“Our concept is not designed to compete against them. It is designed to compete against eating occasions that are unhealthy for you, but that you otherwise wouldn’t have the luxury of eating well,” he said.

In other words, Salad and Go seeks to take down fast food restaurants like McDonald’s, which pulled its salads from menus during the Covid-19 pandemic and has yet to bring them back.

Ambitions for thousands of restaurants

Salad and Go is also looking to emulate its fast-food rivals in other ways.

“We have expansion plans that will take us to thousands of restaurants,” Morrison said. “Ultimately, we believe this brand has the potential to make a very big mark.”

Like Sweetgreen, Salad and Go owns its restaurants rather than franchising them. That approach requires more capital, as does its commissaries, or central kitchens, as Salad and Go calls them. But Morrison said the kitchens mitigate labor challenges by requiring less training for their workers and fewer employees in their actual restaurants.

Today, Salad and Go operates two commissary kitchens: one in Phoenix and the other in Dallas. The Texas kitchen was the original prototype for Salad and Go, and the chain plans to upgrade it to an upgraded facility by this spring that can serve up to 500 locations in the future, including potential restaurants as far away as Atlanta.

For now, Salad and Go’s goals for the future focus on building more restaurants and spreading the word about its salads. When asked about long-term plans for the company, such as an initial public offering, Morrison said all options are in play.

“It’s less of a concern now. The concern for us is simply expanding our footprint and getting into the market, fulfilling our mission,” he said.

Don’t miss these CNBC PRO stories:

Source Link

Related Posts