Sweetgreen wants to be the ‘McDonald’s of its generation.’ This rival salad chain could beat it

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

But another salad rival could beat Sweetgreen to the punch: Salad and Go.

Founded in 2013, the upstart chain is nearing its publicly traded rival’s store count, with more than 100 locations and counting. With backing from its owner, private equity firm Volt Investment, it has ambitious expansion plans for 2024 beyond its roots in the Southwest.

Salad and Go’s appeal comes in no small part from its affordability. One of its 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 plots an ambitious expansion path, its C-suite is packed with restaurant industry veterans, including former Wingstop CEO Charlie Morrison. He joined Salad and Go’s board in 2020. Two years later, Morrison took over as chief executive, departing Wall Street’s favorite chicken wing chain after a decade in favor of a little-known salad chain that then had only 50 locations.

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

Since Morrison became chief executive, Salad and Go has more than doubled its footprint, which is now around 130 locations across Arizona, Nevada, Oklahoma and Texas. Last year, the chain opened about a restaurant every week, and it plans to keep up that pace in 2024 and enter new markets such as Southern California. For reference, Sweetgreen has 220 open locations, as of Sept. 24.

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

A salad or wrap from Salad and Go starts at one of the chain’s commissary kitchens, where its produce is washed and its proteins are prepared. Those ingredients are then shipped to its 750-square-foot locations, which are roughly the same size as a typical restaurant kitchen. The restaurants have drive-thru lanes, but no indoor seating.

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

Salad and Go customers order online or in those drive-thru lanes, and a team of two employees makes their customized salads and wraps.

The simplified restaurant kitchen features a walk-in cooler and cooling counters underneath the make lines where workers assemble orders. A few ingredients, such as the eggs for its breakfast burritos and avocados for its salads, are prepared on site, rather than in its commissaries.

But the Salad and Go locations lack the freezers, broilers, fryers, hoods and fire suppression systems that typical fast-food restaurants need — and are often a culprit for delays as locations wait on equipment inspections ahead of opening.

On average, a Salad and Go customer exits the drive-thru line in under four minutes, according to Morrison. Increasingly, its customers are picking up orders for more than just one meal.

“The unique thing about Salad and Go against any other [quick-service restaurant] brands out there is that we enjoy a two-daypart single occasion,” Morrison said. “You can show up at 6:30 in the morning and get your breakfast burrito, get your cold brew coffee or hot coffee, and get your salad for lunch during the same occasion.”

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

“We’ve been able to put these stores in these differentiated markets, with different income levels, different levels of diversity, different focal points, and found that great performance quite 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 because of its cheap prices and tasty food.

“What we see with our fans, with our guests, is this very strong loyalty and affinity,” Salad and Go Chief Marketing Officer Nicole Portwood told CNBC.

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

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

But Morrison told CNBC that the chain doesn’t worry about those options, which usually charge at least double what his company does for their healthy fare.

“Our concept is not tailored to compete against them. It’s tailored to compete against eating occasions that are unhealthy for you, but otherwise you couldn’t afford to eat well,” he said.

In other words, Salad and Go is looking to take down fast-food restaurants such as McDonald’s, which pulled its salads off menus during the Covid-19 pandemic and hasn’t brought them back yet.

Salad and Go is looking to emulate fast-food rivals in other ways, too.

“We have expansion plans that will carry us well into the thousands of restaurants,” Morrison said. “Ultimately, we believe this brand has the potential for a very large footprint.”

Similar to Sweetgreen, Salad and Go owns rather than franchises its restaurants. That approach requires more capital — so do its commissaries, or central kitchens, as Salad and Go calls them. But Morrison said the kitchens mitigate labor challenges, requiring less training for its workers and fewer employees in its actual restaurants.

Today, Salad and Go runs two commissary kitchens: one in Phoenix, and the other in Dallas. The Texas kitchen was Salad and Go’s original prototype, and the chain plans to upgrade to an improved facility by this spring that can service as many as 500 locations in the future, including potential restaurants as far away as Atlanta.

For now, Salad and Go’s goals for the future are focused 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 just expanding the footprint and getting into the market, fulfilling our mission,” he said. 

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