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Diving certificate:
- Sweetgreen is well on its way open seven new restaurants with Infinite Kitchensits automated production line and will retrofit two to three existing restaurants with the technology this year, CEO Jonathan Neman said Thursday during a conference call on quarterly results.
- The company opened its first remodel with an Infinite Kitchen in New York City’s Penn Plaza on July 15 – a process that took seven weeks. Since reopening, that location has seen increased throughput, Neman said.
- Given the improved throughput, Infinite Kitchens could increase sales at its existing stores, which grew 9% companywide in the second quarter. according to an earnings announcement.
Diving insight:
The fast-casual chain opened its first Infinite Kitchen in Naperville, Illinois, in May 2023. That location generated $2.8 million in revenue in its first year and a restaurant-level margin of 31.1% in the second quarter, said CFO Mitch Reback.
In addition, the first-year employee turnover rate was about 45% lower than at a standard restaurant, Reback said. The chain had previously reported that the kitchens also resulted in 10% higher bills.
A store in Huntington Beach, Calif., that was outfitted with the Infinite Kitchen about six months ago is seeing similar results to the Naperville location, Reback said. At Penn Plaza, the Infinite Kitchen showed strong performance on its second day, producing nearly 200 trays in 30 minutes with 100 percent on-time delivery, he said, adding that there is potential to reach 500 trays per hour. The average order fulfillment time at Penn Plaza is just under 3.5 minutes, Reback said.
Locations with Infinite Kitchens will likely see a higher return on investment over time than traditional locations, William Blair analyst Sharon Zackfia said in an emailed report to Restaurant Dive. That gap is influenced by rising labor costs, falling manufacturing costs with increasing scale, and the potential sales benefits from faster service and improved customer satisfaction and order accuracy.
“IKs should also help open up true drive-thru options for Sweetgreen (some drive-thrus are planned for 2025) versus its digital order-ahead, pick-up Sweetlane location (of which there is only one today in a Chicago suburb),” Zackfia wrote.
The chain expects to accelerate the rollout of Infinite Kitchens, with more than half of new homes planned for 2025 expected to feature such a kitchen. However, Neman did not provide any information on new homes planned for next year.
Sweetgreen is focused on introducing automation into stores with higher volume or higher throughput needs that present greater challenges from a labor perspective, Neman said.
“The vision would be to get to a point where all stores have an Infinite Kitchen in the future,” Neman said. “Right now … we’re still learning a lot and trying to make sure we hit our return on investment threshold.”
Among the major fast-casual chains, Sweetgreen is the most advanced in automation. Chipotle has tested an automated hyphae production line and an automated avocado slicer, but these have not yet been deployed in a restaurant.
