Luiza Niemeyer, Claudia Sanchez, and Felipe Caro
Sweetgreen is a restaurant that was founded in 2007 in Washington, D.C with the aim of bringing healthy options to the fast-casual food business. Currently, they have 89 locations across the country and offer a rotating menu of salad and grain bowls that is based on the season and produce availability. The secret of their success? Ensuring freshness and quality through an extended network of local suppliers. Sweetgreen is a part of the “farm-to-table” (and more recently “seed-to-table”) movement, which promotes using locally-sourced, high quality ingredients in food preparation. Their ethos goes: “We believe the choices we make about what we eat, where it comes from and how it's prepared have a direct and powerful impact on the health of individuals, communities and the environment.” To support it, they have a network of over 500 small and mid-sized suppliers, many of whom service a specific local region of their 89 locations. This means that on any given day, each of their stores handles products that were sourced from upwards of 200 suppliers. Everything is delivered and tracked on a daily basis to ensure the freshness and quality of the products.
The farm-to-table movement has very specific implications for the sweetgreen supply chain. Operationally, sweetgreen embraces a number of effective supply chain practices that are key to ensuring their day-to-day operations run smoothly while also ensuring the company stays true to its social values. Some of them include: dual sourcing, distributor controls, information sharing, and forecasting.
From a sourcing perspective, sweetgreen leadership identifies local and organic farms that they would like to work with before deciding where to open up a new location. They begin building a partnership relationship from the start, contributing to positive top-down effects by giving business to local farmers that enables them to expand and improve their own practices. To mitigate the potential disruptions that inevitably happen in the agricultural industry, sweetgreen adopts a dual-sourcing model where larger farms in California support produce demand that cannot be met locally. This approach helps balance the company mission with customer satisfaction and operational flexibility. Strong-relationship building and management also occurs with distributors, whose role extends from simply delivering supplier produce to assisting sweetgreen in delivering transparency to customers through their in-store menu displays. Every night, the distributors must log into sweetgreen’s proprietary supplier portal and note which stores are set to receive product from one supplier over another. This information is then updated in a physical chalkboard at each sweetgreen location so that customers are able to trace their meal to the farm(s) it originated from.
Because sweetgreen’s menu is seasonal and highly dependent on produce availability, demand forecasting is a little tricky but extremely important. To circumvent the challenges that come with seasonality, planners use historical demand data from a selected proxy menu item, knowing that most of their offerings follow a similar sales pattern. These forecasts are updated daily to monitor specific trends and subsequently orders with their suppliers are adjusted if needed. All of the information, from the original predicted forecasts to the daily updates, are shared with suppliers to ensure everyone has access to much needed information. A challenge however is that updates to forecasts are not received in real-time, particularly because small farmers do not have access to the technology and software needed to support real-time data sharing.
Freshness and forecast difficulties also bring challenges in managing customer expectations, as some customers end up having inconsistent experiences depending on their location and time of the year. While this is certainly a constant concern, it is also a trade-off embedded in sweetgreen's model that customers looking for freshness can at least understand. Another consideration that might be trickier is the use of environmentally friendly packing, especially as sweetgreen transforms itself into a lifestyle brand. Rethinking the use of single use utensils, plastic straws, along with their carbon footprint should be within sweetgreen's agenda as they continue to expand.
Possible ways to address these issues include: deepening supplier relationships by creating or facilitating financing programs to help family owned business invest in IT. Better data management systems would not only help sweetgreen and farmers address their forecasting issue, but they would also be an important tool for the farmers themselves, allowing them to grow and potentially become exclusive sweetgreen partners, which could help reduce potential disruption. As sweetgreen builds its reputation as a lifestyle brand, it would also benefit from mimicking certain practices seen in their food sourcing to their material sourcing and packaging supply chain. Building strong relationships with partners that provide in-store packaging products will enable them to become thought partners, opening up potential for them to innovate in this space and continue to be leaders in sustainable supply chains.
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