Dive Brief:
- Sweetgreen is on track to open seven new restaurants equipped with Infinite Kitchens, its automated makeline, and retrofit two to three existing restaurants with the technology this year, CEO Jonathan Neman said Thursday during an earnings call.
- The company opened its first remodel with an Infinite Kitchen on July 15 at Penn Plaza in New York City — a process that took seven weeks to complete. Since reopening, that location has seen higher throughput levels, Neman said.
- Given the improved throughput, Infinite Kitchens could increase same-store sales, which were up 9% companywide during the second quarter, according to an earnings release.
Dive Insight:
The fast casual chain opened its first Infinite Kitchen in May 2023 in Naperville, Illinois. That location posted $2.8 million in sales during its first year and restaurant-level margins of 31.1% in Q2, CFO Mitch Reback said.
Additionally, the first-year employee turnover rate was roughly 45% lower than a standard restaurant in its first year, Reback said. The chain previously reported that the kitchens led to 10% higher tickets, as well.
A store in Huntington Beach, California, equipped with the Infinite Kitchen about six months ago is seeing similar results to the Naperville location, Reback said. In Penn Plaza, the Infinite Kitchen showed strong performance on its second day, producing nearly 200 bowls in 30 minutes with 100% on-time reliability, he said, adding that there is the potential to reach 500 bowls per hour. Average order completion times are just under 3.5 minutes at Penn Plaza, Reback said.
Locations with Infinite Kitchens will likely produce a greater return on investment over time than traditional locations, William Blair analyst Sharon Zackfia said in a report emailed to Restaurant Dive. That gap will be impacted by labor costs rising, manufacturing costs declining with scale and the possible sales benefits driven by faster speed of service and improved customer satisfaction and order accuracy.
“IKs also should help unlock true drive-thru optionality for sweetgreen (with a few drive-thrus in the 2025 pipeline) versus its digital order-ahead pick-up sweetlane location (of which only one exists today in suburban Chicago),” Zackfia wrote.
The chain expects to accelerate the pace of deployment of Infinite Kitchens, with more than half its new builds for 2025 expected to include one, although Neman did not disclose the projected builds for next year.
Sweetgreen is focused on putting the automation in stores with higher volume or higher throughput needs that have more challenges from a labor perspective, Neman said.
“The vision would be to get to a place where all stores in the future do feature an Infinite Kitchen,” Neman said. “At this moment … we are still learning a lot and we are trying to make sure we meet our capital return threshold.”
Among major chains in the fast casual sector, Sweetgreen is the furthest along in the deployment of automation. Chipotle has been testing an automated makeline from Hyphen and an automated avocado slicer, but those have yet to be deployed at a restaurant.
