FROM FASTCO WORKS AND SAP - Growth Agents: The inside story of Sweetgreen’s rapid rise to the top
12:12 Share

Hey, this is Yaz, host of Most Innovative Companies. Here's a special custom mini-series from FastCo Works and SAP. Enjoy. Welcome to Growth Agents, a special mini-series in partnership with SAP. I'm Matt Robertson with FastCo and Inc. Studios. Our guest today is Mitch Reback, CFO for Sweetgreen.

Thanks for sitting down with us today. I'm a big fan of Sweetgreen, but I wonder if you could just give kind of like the elevator pitch for someone who might not be familiar with your company. Like what is Sweetgreen? Sweetgreen is a fast casual restaurant. We have about 220 restaurants today across the country. We serve farm-to-table food that's fresh and delicious. And what is, in your estimation, Sweetgreen's kind of overall mission? Our mission is to connect more people to real food.

We're out on a mission to change the food system and change the way people eat.

And how do you guys operate? Like, where are you located? What's your footprint, either nationally, internationally? Can you kind of take us out of the hood of how this operation works? The company started in around 15 years ago in Washington, D.C. When we opened up, we spread up the East Coast from Washington up through Philadelphia, New York, Boston, and we leaped to Chicago and California, and then went back through Texas and the Southeast. Today, we're in about 20 states.

So why don't we switch over to a little more personal about you. What drew you into your line of work?

Well, I was always interested in economics. I majored in college, love economics. And at the same time, I was always interested in people and people and how they engage with markets and behave. And I saw finance as kind of the intersection of economics and a degree of people watching. And have you always been working in this field? Yes, always worked in finance. What were you doing before and how did you get involved with Sweetgreen? I'd love to hear a little bit about your history that kind of led you to this, where you are now.

I was working as a CFO at my previous company, and there was a person there who was the chief operating officer who had left and joined Sweetgreen. When I left this company, she immediately called me and asked if I would have lunch with the founders of Sweetgreen. John, Nick, and Nate were on their way to Santa Monica to look at real estate, and we agreed to have lunch.

She told John, Nick, and Nate that I was the only CFO who chopped his own salad every day for lunch. I thought we would have salad, but they went out for sushi. So how would you say that your background in finance has influenced how you operate here now at Sweetgreen?

When I think about my background in finance, I have really two general types of roles. One working for founders and one working for a company that grew and scaled very, very quickly and became global. And I kind of see my role at Sweetgreen as a mix of those two functions.

What are some of the biggest challenges and complexities here as a CFO for you? I think Sweetgreen's on a huge growth spurt. Part of the role of finance is to keep up with that growth spurt, to be sure that we have adequate capital and adequate resources, and drive the company forward as fast as we can move it. I think we've been keeping up with the growth. Are there any successes that you've been able to achieve or share in as CFO?

I think one of my big successes was helping to scale the infrastructure of the company. When I first joined Sweetgreen, there were approximately 25 people in the corporate structure, three people in finance. Today we have over 300 people. So really trying to add more experience to the company to help drive the growth forward.

You know, I think one of the big successes of Sweetgreen is just being able to grow so rapidly. I joined the company, we had about 25 stores. Today we have over 220 stores. So we're really able to drive rapid growth to meet more customers and drive it through other new markets. Same time, we had to scale up the infrastructure to keep up with the growth.

When I joined the company, we had about 25 people working in the support center. Today, we have over 300 people. And just scaling the infrastructure to align with the growth and building a culture that supported the growth is really critical. What's that unique perspective that you can share as a CFO, since we don't often get to hear from your side of things?

When you're a CFO working for a founder, you need to be all in. Founders have dedicated their life to building their company and they're all in. And they expect the people who work for them to be all in and all committed. And you need to be bought in. And I think the people who work for people like myself also need to be bought in. We drive our company hard, we drive it fast, and we have a lot of fun. And how are you able to get yourself in that all-in mindset?

I've always been there. I've completely bought in. I see what we're doing as fun. I see what we're doing as really important. We're connecting more people to real food. We're trying to change the food system. We're trying to make the world healthier. What's it like to help lead a company that has such an innovative and battery-pushing idea and strategy?

Well, you know, I think there's a lot of innovation at Sweetgreen from the way we supply our product and source it to our role of technology, both meeting our customer and technology to running our store. You know, the role of a CFO is really to push the innovation forward, but to do it in a way that's capital efficient and be sure that the company can continue to sustain that growth level. How do you view your role as a growth agent here at this company? As CFO with Sweetgreen, I see my role in two big areas.

First area is raising capital. Companies need capital to grow and you need to be sure you have adequate capital at all time. Second area is we get to allocate that capital. And how good we are at capital allocation is critically important to the success of the company. For example, do we want more new stores, more new investments in technology, more marketing, more investments in people and culture? It's always a trade-off that the CFO has to be engaged in that decision-making.

MIKE GREEN: What type of rate of growth is going to be essential to the success of this company? DAVID ROSENBERG: Sweetgreen has grown about 20% for the past nine consecutive quarters. It feels about the right pace for the next couple of years going forward. MIKE GREEN: As CFO, how do you balance keeping a lid on costs versus funding strategies that you need for this company to grow? DAVID ROSENBERG: It's always a balancing act between how fast you want to grow and how fast you want to invest in the infrastructure.

but you need to do it in a way that's absolutely coordinated. You want to be sure that the growth is fast enough to meet our customers and that the infrastructure can keep up with the growth.

If you grow the infrastructure too quickly, it chokes off the growth. If you grow it too slowly, the growth stumbles. It's a balancing act. The role of the CFO is to have your hands on the dials at all times. You adjust the balancing act. What are some of the biggest challenges in terms of sustaining or building growth for this company? I think one of the big challenges for Sweetgreen is to be selective in where and how we grow. We have a huge opportunity before us, a huge marketplace, and a lot of customers who want our product and want us to open up.

I think it's being careful about where we go and what sequence we go, how fast we go, and how frankly we build the team member support and culture to support that growth at the store level. And are there any examples of kind of growing pains that you've encountered and maybe how you've been able to kind of get around them or overcome them? I think all companies that grow at our pace go through growing pains.

occasionally have challenges in markets and stores and things that you learn from. And any examples of things that you've kind of helped get the company over in terms of these growing pains? You know, one of the growing pains that I think back on is when we first opened our store at Bryant Park in New York. Bryant Park was a huge investment for the company. It's one of our largest stores. And at the time, I remember speaking up in the real estate meeting, say, this is the last store we'll do with this rent structure in New York.

Today, whenever I go to Bryant Park, I laugh and think we'll take 20 more of them. So it was worthwhile? Very much worthwhile. It's about taking a risk and knowing the priority order and to take the risk and how to balance it. So you believed in this and pushed for it? I believed in it and pushed for it, but was also very concerned about it. The role of finance is a balancing act. I thought it was a great risk to take, but I was very weary of taking too many of them at the same time. You know, I think when I first joined Sweetgreen, we had a huge discussion about upgrading our app.

It was in 2015, it was a major strategic decision. It was a huge investment for a very small company at the time. We clearly saw the path towards technology. We had a complete conviction in it. And we jumped forward and went forward with a new app and building secondary make lines in all of our restaurants. At the time, a lot of people thought we were crazy for doing it, but clearly defined the company and changed the company forever and for the best.

So that component of, I guess, ordering, visiting, making your decision about what you're going to get on the app, has that been a big part of Sweetgreen's growth versus just the in-store experience? When I look at Sweetgreen, I kind of see it in a chain.

We have a very, very strong brand, which took us a long time to build and craft, and we have a lot of customer love. Strong brand supports a large footprint and gives us the opportunity to open up more stores. We sell a product that's sourced from farmers where our customer can taste freshness, and that freshness allows the customer to eat it frequently.

We then developed an app. The app allows the customer to order frequently and seamlessly and as conveniently as possible. We then developed a lot of technology to run our stores, because in each of our stores, we have five ordering channels coming in at the same time.

All of this together made for a very, very tight business model that allows the company to grow and grow in a way that's really repeatable and sustainable. What are some of the goals for the future of the company in the next five years and beyond? When I think about Sweetgreen, we're at the infancy of our growth.

We see the opportunity for thousands of stores in the United States, international expansion at some point in time. So I see us executing and opening up more new markets, more new stores, and really broadening our menu and continuing to reach new customers every day. Are we entering a new era in this industry?

I think that we did enter a new era in the industry as we came through the COVID pandemic. I think you saw a few more people developing greater use of technology and faster service models and adapting to a different environment. In your view, how would you say, based on your own experience, maybe what you've seen, the role of the CFO, is that changing in today's C-suites? And if so, how? I think the world's changing. The world's moving much, much quicker.

Think about the impact of the pandemic, the recovery of the pandemic, how quickly interest rates have moved. The role of the CFO is to allocate capital. That means you have to adjust as the world changes. The faster the world changes, the faster we need to adjust.

I think that's brought new challenges and opportunities to the role of the CFO. And how has that affected your approach to a workday or your general philosophy towards what you do for your career? You know, I think what I would say is some people look at the industry and say it's a

It's a slow-moving industry, but this is a very, very fast-paced culture. I think we use speed to our advantage and speed to reach more customers and speed to drive our culture. That's one of the key attributes in making us successful. Does the CFO have a role in building the culture here? I see myself as a key builder of the culture at Sweetgreen. We want to build a smart, fast-paced culture that has a lot of fun together.

I think culture is really what makes a company successful. Culture is how you align your organization and get everyone driving behind the same mission. We spend a lot of time building the culture, and it's something we look for in every hire we do. Yeah, and how would you say you do that? People don't particularly associate the CFO finance with building the cultural identity of a company. How do you pull that off?

I think for me it just comes naturally, but I think what we do largely is we look for the people we bring in. We bring in smart people who are fun and like to have a good time. When you find that magic, they help spread the culture and they help make the place stronger. And that makes people drive our mission faster.

That is all for our discussion on growth agents. This custom episode is produced by Fastco and Inc. Studios in partnership with SAP. I'm Matt Robertson. Our producer is Avery Miles, and our editor is Nicholas Torres.