Sweetgreen the Ultimate Millennial Brand?

Started in 2007 by three millennials, the health fast-food company sells locally sourced salads, cold-pressed juices, and a socially responsible image.

BY NANCY COOK

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September 4, 2014 When Jonathan Neman was a senior at Georgetown University back in 2007, he and two of his friends couldn't find many options for cheap, healthy food. So naturally, the three guys collected money from family, friends, and college classmates ($5,000 here, $10,000 there) and opened up a casual salad shop called Sweetgreen, down the hill from campus.

As the son of textile entrepreneurs originally from Iran, Neman always knew that he wanted to build his own business. "It really started because we wanted to create something for us and for our friends that did not exist," he says. "It was so obvious to us. 'How has no one created this simple place to eat healthy?' "

Seven years later, the company not only still exists, but boasts 27 locations in Washington, Boston, New York, and Philadelphia, with plans to expand to Los Angeles, Neman's hometown. Sweetgreen employs about 800 people, and starts its restaurant workers at a wage of $10.50 an hour. Part of its success comes from customers viewing Sweetgreen not just as a fast-food-esque restaurant that sells salads, cold-pressed juices, and frozen yogurt, but as a lifestyle brand that traffics in healthy and sustainable food, music, design, technology, and community service.

That's a recipe that has proven to be catnip to the millennial set, which the young founders know as well as anyone. "Millennials are looking for more than just a transaction," Neman says. "This generation wants to associate with things that have purpose."

Infusing purpose and meaning into the business world will be one way for companies to woo the key millennial demographic in the coming years. A recent Brookings Institution study estimatesthat the millennial generation will make up 75 percent of the workforce by the year 2025. Already, financial institutions and marketers are eyeing millennials as the next generation to control a good chunk of this country's wealth. Businesses will adapt or fold based on the millennial generation's preferences and demands as both consumers and workers.  And what are those? Out are lots of corporate hierarchy and obsession with the bottom line. In: socially responsible companies that make an effort to connect with and reward consumers.

Already, the food industry is one sector that's seen the influence of millennials' buying power. The earnings of healthier fast-food chains—known in food-world parlance as "fast-food casual stores"—shot up this summer, giving a boost to chains such as Chipotle, Panera Bread, and Tender Greens. In survey after survey by consultants and marketing professionals, millennials have defined themselves as foodies who enjoy eating out in groups, paying attention to the source of their food, and—don't forget—Instagramming all of those beautiful, colorful dishes. Experts on millennials such as Christine Barton, a partner at the Boston Consulting Group, predict that as this generation gets older, members will care not just about where they dine out but also about eating organic and sustainable food at home.

Part of the reason that the food sector already displays hallmarks of the millennials' influence is that food touches on so many trends important to the millennials, such as quality, trustworthiness, good corporate practices, authenticity, a sense of adventure, and transparency in the supply chain, say Barton and Jeff Fromm, president of FutureCast, a millennial marketing consultancy.

None of this is lost on major corporations like Coca-Cola or Kraft Foods, Fromm adds, even if they have not yet cracked the precise code to reach this generation. "The most unique and meaningful brands will be the most successful, and the size of the company is not a determining factor," he adds. "If you are a really great brand, millennials will pay for it."

That's certainly been the strategy behind the rise of Sweetgreen, where a salad can retail for roughly $10. In addition to selling healthy meals, Sweetgreen also hosts an annual music festival called Sweetlife—billed as "a party with a purpose"—and a community-service program that teaches healthy eating habits to roughly 1,000 students each year in D.C., Maryland, Virginia, and New York. The chain embodies a farm-to-table ethos, with local ingredients from nearby farms appearing on menus along the East Coast. This summer in D.C., those items included heirloom tomatoes, feta cheese, and watermelon. Even the plastic cutlery and napkins are eco-friendly and compostable—values that are important to the Sweetgreen founders and, as it turns out, also good for business with millennials.

Neman isn't sure what the long-term future is for Sweetgreen, apart from focusing on building the company and expanding into communities that want healthy food. But, as the founder of a lifestyle-oriented company, there's no reason for him to know exactly which direction the company will take as long as it's consistent with the founders' values and their consumers' needs. "At first, the company we created was just based on the things we liked, like a product of our personalities," he says. "As we grew the business, it became more of a structured approach to adding these things."