Sweetgreen’s sour summer

It’s one of the great questions of our modern age: How does Sweetgreen lose money selling $14 (and up!) fast casual salads and bowls? And not just a little money but $442 million in the last three and a half years and more than $908 million since 2014.  

Sweetgreen is having a disastrous 2025, with same-store sales down 7.6% in the second quarter after a Q1 drop of 3.1%, and a now aborted rollout of fries (how do you mess up fries?). The stock is down more than 70% this year. No one has ever grown a salad chain to Sweetgreen’s size, 260-plus restaurants and 2025 revenue tracking to more than $700 million. But if the company is to achieve its lofty goals, 1,000 locations mainstreaming its healthy and sustainable ethos, its founders—CEO Jonathan Neman, chief concept officer Nicolas Jammet, and chief brand officer Nathaniel Ru—need to step aside. Let me tell you why.  

• What the fries debacle reveals about Sweetgreen’s problems 

• How the founders’s obsession with tech ignores the secret that’s underpinned popular chains both customers and investors have loved 

• Why the Sweetgreen founders can’t be fired  

Sweetgreen did not respond to a request for comment by press time. We’ll update this piece if the company responds.

Fry Guys

“A salad with a side of fries” is such an American cultural cliché that there’s even a podcast that adopted the phrase for its title. So in March 2025 when Sweetgreen added Ripple Fries to its menu nationwide, the move made perfect sense. ”This is a way to show that you can come to Sweetgreen, eat a salad, and have a little bit of a permissible indulgence around fries,” CEO Neman told Fast Company in a piece timed to the rollout.  

Sweetgreen’s fries, a year in the making, came with the healthy halo of being air fried in avocado oil. ”It’s the first time we have a truly signature side,” Neman said. “The other sides were fine, but now we have this staple. And they’re really addictive.”  

Neman was excited to tell investors in May during its first quarter earnings report that the fries were a hit. “Ripple Fries drove same-store sales improvement in March. They have become our most attached side item across channels, helping to lift overall ticket averages and broaden the meal experience. Notably, the strength has been consistent across all markets.” 

But just three months later, in a shocking turn, that indulgence had become problematic, and Sweetgreen was going cold turkey.  

Neman broke the news he was dropping fries in an odd “oh, by the way” comment during the company’s disastrous second quarter earnings call:  

“If I could just mention one other thing, you know, no one’s asked about Ripple Fries, but I do think it’s important to bring it up. You know, Ripple Fries is something that we’ve learned consumers love. We had a great reaction from. But as we studied what it was doing to the restaurant operation and the distraction for our teams, we realized that it became a complexifier for us delivering on our core. So one of the other big changes we’ve made is starting next week, we will be discontinuing Ripple Fries in order to focus on our core. And in stores where we have tested this, we’ve seen huge improvements in customer satisfaction, because, again, teams can really focus on the core products. 

What the hell happened between May and August?  

What likely killed Sweetgreen’s fries

Actually, the right questions to ask are what didn’t happen before the March debut of fries? And why? That we even have to ask these questions is what leads me to believe Sweetgreen needs new leadership.  

The company appears not to have done enough testing of how Ripple Fries would affect restaurant operations. Company execs told Fast Company in March that they’d spent months testing the fries at some of its L.A.-area stores.  

But the best practices for testing a new product are to start with one high-performing store, move to a district-wide test that encompasses stores of varying quality, and then do a strict experiment to assess the economic impact of adding fries in a sufficient number of stores and for a meaningful amount of time so that there’s virtually no doubt the new menu item will have the desired impact.  

Then you develop a rollout plan and train employees to make sure that you see the successful results of your experiment when you go national.  

In hindsight, a comment Neman made to Fast Company in March raises an eyebrow today. “We know that people will attach it to their meal. The question is, will people come in more because of it? Will it drive actual core transactions for us, or will it just drive ticket?”  

If he and the company truly didn’t know the answers to these questions, then they didn’t do enough testing and weren’t ready to rollout Ripple Fries.

Sources familiar with Sweetgreen’s operations laud management’s innovation and willingness to try something bold, and they laud Neman’s decisiveness in killing Ripple Fries because of the impact it was having on the frontline restaurant staff’s ability to deliver salad and proteins consistently.

In sum, they assert that Neman and senior leadership did everything right. Okey-doke!

They also are quick to cite broader economic conditions that have inspired many Americans to eat out less or trade down for more value. Online, the disappointing earnings of Cava, Chipotle, and Sweetgreen inspired a “slopcession” discourse in the last week, lampooning the cooling societal ardor for eating all our meals out of a bowl piled with stuff.

If fries were an isolated incident, or if all of Sweetgreen’s woes could be explained by fragile consumer confidence, perhaps I, too, could buy these narratives. But there are signs everywhere that Sweetgreen is struggling with its operations. 

Sweetgreen is not a good operator

The most successful restaurant chains in history, from White Castle to In-N-Out Burger to McDonald’s to Chipotle, introduced innovative systems. High-performing chains need a good product, sure, but they rely on processes to get people their food as quickly as possible and able to handle rush times.  

Sweetgreen’s leadership understands this and yet achieving it remains elusive. Look at what Neman had to say in May and then what he said in August.  

Here’s the CEO in May: 

“True operational excellence requires relentless attention to detail, especially now. That’s why our team is committed to optimizing every process, no matter how small, to drive continuous improvement.” 

Now here’s Neman in August:  

“Today, about one-third of our restaurants are consistently operating at or above standard, while the remaining two-thirds represent a meaningful opportunity for improvement.” 

Ouch!  

How are two-thirds of Sweetgreen’s restaurants below standard? One answer may be that the company’s chief operating officer role has been a great source of instability. Since 2018, six people have rotated through the position.

Sources familiar with Sweetgreen operations have high hopes for the latest COO, Jason Cochran, who is a former Chipotle VP of operations services, who was hired this spring. They also reaffirm the company’s high standards.

But at present, Neman and company seem to do things that run counter to his statement about relentless attention to detail. Sweetgreen is on its third loyalty program in four years. After introducing its current one, SG Rewards, in April to replace its SweetPass subscription loyalty membership, Neman had to acknowledge that Sweetgreen faced “a falloff in revenue from a small but highly important cohort of former SweetPass members following the discontinuation of the subscription program.”  

Translation: It didn’t anticipate that it should do whatever it could to take care of its best customers before revamping its loyalty program.  

Almost as bad, Neman revealed to investors that later this year the company would be adding the ability for customers ordering in the restaurants to scan their loyalty card and pay in a single transaction. Right now it’s a two-step process, and that’s slowing down the restaurant’s lines, the very thing it desperately needs to fix. 

Sweetgreen failed to have its streamlined in-store system in place and hadn’t thought about its most devoted customers before changing its loyalty program. This is another example of the lack of attention to detail that’s bedeviling the company right now.  

There’s more!  

• It’s increasing portion sizes for chicken and tofu in an effort to deliver more value for customers but has given no indication how it’ll pay for these changes.  

• It’s reducing hold times for items, meaning that customers should get fresher food in their orders, but without addressing the potential that has on waste and what those costs could do for its restaurant-level profit margins (currently at 18.9%, below the 20% that investors would like to see).  

• It’s in the midst of another major test for a new product: house-made beverages. They’re about to roll out to three markets, and Sweetgreen is testing four beverages. Leadership gave no indication to investors how the presumably time-consuming process of making drinks in house will impact operations at the two-thirds of its restaurants that are already underperforming. But a source with knowledge of Sweetgreen’s operations tells me that it has adopted a “stage-gate process” for product testing and it is being used on these beverages. 

• Sweetgreen’s “general and administrative” costs, meaning corporate overhead, are well above that of their primary competitors. In the most recent quarter, its G&A was 18.6% of sales, compared with just 11.4% at Cava. Sweetgreen’s labor and occupancy costs of its locations are also a higher percentage of sales. In other words, its overhead is bloated.  

Chasing shiny baubles

Fries! Drinks! More protein! Merch! And just this week, baby goats! They’re all manifestations of Sweetgreen’s proclivity to chase shiny baubles rather than obsess over its restaurants’s execution.

Sources with knowledge of Sweetgreen praise Neman for acting with urgency in rolling out generous protein servings and seasonal burrata bowls, for example. But from the outside, I find that the company’s most recent moves read as more frenetic than considered.

This grasping for something magic that’ll make Sweetgreen appear to be more than a restaurant chain is most evident in the founders’s longstanding interest in being perceived as a tech company.  

The company’s early adoption of digital ordering and payments was laudable. Since then, though, they’ve talked about but haven’t really delivered on everything from blockchain-based transparency of every ingredient to machine-learning algorithms to give each diner personalized recipes tailored to their tastes.  

Sweetgreen’s biggest bet has been on a robotic “make line,” an automated version of the row of ingredients that could be part of your order. Known as Infinite Kitchen, Sweetgreen acquired the tech in a $50.7 million deal in 2021. The company has been rolling these out in some of its new restaurants as well as retrofitting older ones. This past quarter, it opened nine restaurants, and four of them had the Infinite Kitchen tech. 

In theory, Infinite Kitchen solves a lot of problems for Sweetgreen at once. The machines can provide perfect portion control to keep food costs in line. It can operate more efficiently than a team of people.  

But there’s a lot we don’t know about Infinite Kitchen just yet:  

• They’re expensive to install—$450,000 to $550,000—and tariffs could impact the price.  

• The oldest ones haven’t been in operation long enough for us to know how durable they are.   

• As Sweetgreen continues to diversify from salads and bowls to heartier meals and sides such as house-made beverages, are the labor advantages that the robotic system offers nullified? 

Infinite Kitchens at least represent the first effort by the company to use technology to solve its biggest problem—operations—rather than mere magic dust sprinkles to make the company look like something it’s not.   

Great restaurant chains make for the best stocks

The Sweetgreen founders’ obsession with tech always seemed like an expression of their envy as they watched tech valuations explode in the 2010s for products created by and/or for their generational peers, from Uber to DoorDash to the overvalued tech unicorn of your choosing circa 2019.  

Yet it belies the reality that the best-run restaurant chains can outperform even tech darlings.  

• Chipotle: 3,340% growth from IPO to 2015, then another almost 800% under CEO Brian Niccol from 2018 to 2024 following the company’s food safety problems in the mid-2010s 

• Domino’s: 5,438% from 2004 to 2020, surpassing that of fellow 2004 IPO Google, whose stock rose 2,939% during that time    

• Panera: From 1999 until it went private in 2017, it was what’s known as a “100-bagger,” meaning that a $1,000 investment grew to be worth $100,000. If you take the company’s stock from its 1991 IPO to 2017, it grew approximately 4,000%. 

Sweetgreen stock is down almost 83% in its less than four years as a public company.  

Time for a change

Neman, Ru, and Jammet have led their company for 18 years now. They have achieved what seemed impossible once upon a time: creating a national chain based on healthy eating and sustainability principles. The trio deserves all the credit for doing so.  

But it’s time for them to step aside and hand the reins to an experienced operator who’s a proven winner to Wall Street.  

Right now, the founders have the luxury of making this decision on their own. Much like a tech company, the trio has voting control at Sweetgreen, even though they own a small percentage of the company’s shares. That means it’d be nigh impossible for an activist investor to agitate for changes. 

But with cash dwindling—Sweetgreen had $472M at the end of 2021 and $168M as of Q2 2025—at some point it’s going to need more capital, especially if it can’t tighten up its operations to generate more cash. At that point, one could imagine whomever provides that funding might require their departure as a condition of the money.  

Someone new needs to come in and look at Sweetgreen and see where its model needs to change to be a sustainable, profitable business.  

• Where does the concept need to be rethought?  

• Should it move more food preparation to central kitchens to improve consistency and lower costs? 

• What precisely is the vision for a “Sweetgreen of the future” that’ll get this concept to its stated goal of 1,000 locations? 

(Keep your eye on Monty Moran, who just joined Sweetgreen’s board of directors in June. Moran was president and then co-CEO of Chipotle during its run from 2005-2015, and now he’s sitting right there. )  

In 2019, Inc. profiled Sweetgreen and its fixation on being a tech company. This bit hits different when you read it today:  

“One gets the sense that Sweetgreen’s founders, who have been at this