Business
Why is L.A.’s salad titan, Sweetgreen, wilting?
Sweetgreen’s salad business isn’t as fresh as it used to be.
Not long ago, the Los-Angeles-based company’s fresh bowls of fancy salads were all the rage, and its shares soared on hopes that salad-slinging robots could make it more profitable.
Last year was tough, though, as enthusiasm for the brand waned and cash-strapped diners abandoned fast-casual options for cheaper fast food and homemade meals.
Sweetgreen’s same-store sales slid 9.5% last quarter, even as it increased portion sizes and tried new menu items — including French fries, which flopped. It laid off 10% of its support center workforce in Los Angeles, and one of its founders stepped down.
Over the last 12 months, Sweetgreen shares have tumbled more than 75%. The stock closed Thursday at $8.
“Sweetgreen is more of a premium health product, and it’s going to cost more than a Big Mac,” said retail expert Dominick Miserandino, who runs the company Retail Tech Media Nexus.
“The average consumer, when they’re hit with survival-type questions about basic necessities, wellness is not going to be No. 1 for them,” he said.
Younger consumers are showing less interest in Sweetgreen salads at the same time as tariffs and other factors are driving inflation. The company fell short of Wall Street’s expectations last quarter with a net loss of $36.1 million on revenue of $172.4 million.
“Performance was impacted by softer sales,” Sweetgreen co-founder and Chief Executive Jonathon Neman said in November. “This was coupled with lighter spending among younger guests.”
As it braces for the future, Sweetgreen decided to sell the food automation company it bought only a few years ago. Sweetgreen closed the sale of its automated kitchen technology, dubbed Infinite Kitchen, to the takeout and food delivery company Wonder Group last month.
Spyce, the business unit behind Infinite Kitchen, was sold for close to $200 milion in cash and shares of Wonder’s Series C preferred stock. Sweetgreen bought Spyce in 2021 for about $70 million. Sweetgreen will continue to use the technology in some restaurants. The tech uses automatic conveyor belts to assemble salads and other meals.
“The sale marks a strategic milestone for Sweetgreen, enabling the company to reinvest in key priorities and focus on growth and operational efficiency,” the company said in a news release.
Sweetgreen did not respond to a request for comment.
Sweetgreen was founded in 2007 in Washington by Georgetown students looking to make healthy food as convenient as fast food. It moved its headquarters to Los Angeles in 2016.
The chain has grown to more than 280 stores in the U.S.
California — with 56 Sweetgreens — is the state with the most locations.
The company made its initial public offering in 2021, and a day later was valued at nearly $6 billion. Sweetgreen is now worth around $900 million.
Fast-casual eateries — considered a step above fast food but more affordable than a full-service restaurant — once boomed in popularity. But value-seeking consumers are now turning to other options, said Evert Gruyaert, head of U.S. restaurants and food service at Deloitte.
“There is extremely strong competition and pressure coming from quick-service brands, and casual dining now has very compelling value offers too,” he said. “Fast casual is really squeezed in the middle.”
Fast-casual chains such as Cava and Newport Beach-based Chipotle popularized the customizable lunch bowl, usually including a protein, grain, and veggies.
The idea took off after Chipotle founder Steve Ells noticed that customers were opening up their burritos and asking for a fork. The Mexican chain launched bowls in 2003, paving the way for the Mediterranean bowl destination Cava to open in 2006.
Sweetgreen’s menu includes a range of salads as well as warm bowls featuring rice, salmon and chicken. A caramelized garlic steak bowl sells for $17.95, and a garden cobb salad is $15.75.
With tax, tip and a drink, customers could easily spend more than $20 on lunch.
The trend of lunching on big bowls of healthy ingredients has lost some momentum in recent years.
On social media, some diners are complaining about “slop bowls,” saying that lunch shouldn’t be just a collection of ingredients thrown in a bowl.
Chipotle shares have slid about 30% over the last year and Cava shares have fallen close to 40% over the same time frame. Ells, who left Chipotle in 2020, returned to sandwiches and handheld foods in his new venture Counter Service.
On an earnings call in November, Sweetgreen’s Neman said the chain’s new handheld product will begin market testing early this year.
Whether in a bowl or on bread, much of Sweetgreen’s appeal comes from the perception that it’s a healthy choice. But even in Southern California, where wellness is often top of mind, its offerings are failing to attract as many customers as they once did.
“If you’re financially pushed to the limit, you need fast food to get you through the day at the cheapest possible price,” Miserandino said.
Millennials and Gen. Z, who according to Neman make up about a third of Sweetgreen’s customer base, are facing a difficult job market and cutting back on spending more than their older peers.
Sweetgreen is trying to find a way back into the sweet spot of salad consumers. It debuted a new nutrient-dense menu, created in collaboration with the wellness company Function.
The menu, which follows a recent surge in demand for protein and other macronutrients, includes options with extra iron, omega-3 fatty acids and antioxidants.
“Amid a challenging macro backdrop, our priorities remain clear,” Neman said in November. “I am extremely confident that our leadership team and focused strategy will lead Sweetgreen back to sustained, profitable growth.”
Business
The Homesteading Mother of 6 Taking On Big Tech
Everyone will know more, he told me, when Quantica signs a contract with a tech company to use the facility. That announcement could come by the end of the year.
Besides, Mr. Peterson said, much of the apprehension over the data center comes from people who are afraid of A.I. more broadly, as if “Big Brother is going to take over,” he said.
Those people, he added, “have no role in this conversation.”
What Mr. Peterson could tell me now, he said, was that the project would have minimal impact on the land and the people who live nearby. And residents wouldn’t have to pay a thing for it. He offered no guarantees, but said the project would bring its own power — at least some of it from solar and natural gas.
Despite what opponents have been saying, and despite the information gleaned from data centers around the world, Mr. Peterson said the Broadview site would need “not that terribly much” water.
It will bring jobs, he said. Thousands of temporary workers could descend on Broadview for the construction. The number of permanent jobs would be 30, 40, 100 — he doesn’t know for sure. But he described them as good-paying jobs that would not require specialized training or a college education. Jobs like janitors, maintenance workers or security guards.
He likened it to “being a miner, but not having to grab a drill.” Generations of families could stay in Broadview because people would not have to move to make a living, as many are doing now. They could say, “Oh my gosh, I could push a broom and come home to my home in Lavina that I love — and my kids can do that?”
For anyone who doesn’t like the idea of living next to a data center, he added, “there’s probably a county up the road that doesn’t have one.”
He said the eventual deal would include a “community benefits package,” which could help Broadview pay for things like its problematic wastewater lagoon. The Montana Department of Environmental Quality issued the town a violation in March for longstanding issues at the site, demanding compliance. Remediation could cost millions.
Business
Can Disney recapture the Force with ‘The Mandalorian and Grogu’?
After a 6½-year hiatus from theaters, “Star Wars” returns to the big screen this weekend with “The Mandalorian and Grogu.”
This time around, however, the franchise faces a much different universe than it did in 2019 when the last film came out. For one, theatrical attendance has fallen dramatically since “Star Wars: Episode IX — The Rise of Skywalker” grossed more than $1 billion worldwide in the pre-pandemic days.
Then, there’s Walt Disney Co.-owned Lucasfilm’s own trajectory. In the last few years, new “Star Wars” stories have come only via streaming series on Disney+. And since the service debuted in 2019, the San Francisco-based studio pumped out 13 shows, including “The Mandalorian,” which inspired the film, though others received mixed reviews.
Lucasfilm is also under new leadership, as veterans Dave Filoni and Lynwen Brennan are now co-presidents after George Lucas’ handpicked successor, Kathleen Kennedy, stepped down this year.
It all adds up to a crucial question: Can the nearly 50-year-old franchise still delight its longtime fans, while bringing in new viewers to help it endure?
“There’s a lot riding on this,” said Jeff Bock, box-office analyst at entertainment data and research firm Exhibitor Relations. “It’s close to a make-or-break strategic test … just to see if the modern ‘Star Wars’ is still viable theatrically.”
“The Mandalorian and Grogu” is expected to gross around $80 million in the U.S. and Canada for the four-day Memorial Day weekend, according to studio estimates.
That would rank among some of the top openings this year, including Amazon MGM Studios’ “Project Hail Mary” ($80.5 million) and Disney-owned 20th Century Studios’ “The Devil Wears Prada 2” ($76.7 million). Another big sci-fi installment, Warner Bros. Pictures and Legendary Entertainment’s “Dune: Part Two,” opened to $82.5 million in 2024.
But for a “Star Wars” movie, that’s considered low.
2019’s “The Rise of Skywalker,” for example, opened to $177 million, with 2015’s “The Force Awakens” and 2017’s “The Last Jedi” each debuting to more than $200 million. The $84-million opening for 2018’s “Solo: A Star Wars Story” was considered a disappointment at the box office.
To be sure, theatrical expectations have changed dramatically since the pandemic, which altered moviegoers’ habits and trained many to wait and watch films at home.
“The Mandalorian and Grogu” also stems from a streaming series and does not continue the story line of the traditional “Star Wars” saga films that follow the Skywalker family. (The movie’s reported production budget of $166 million also makes it cheaper than its predecessors.)
And for Disney, box-office revenue will not be the only indicator of this film’s success.
Director Jon Favreau, left, and Pedro Pascal on the set of Lucasfilm’s “Star Wars: The Mandalorian and Grogu.”
(Nicola Goode / Lucasfilm Ltd. / Disney via Associated Press)
The company expects the movie will boost other parts of its business, including streaming, its gaming collaboration with Fortnite and the all-important theme parks, where the film’s main characters appear at the Star Wars: Galaxy’s Edge-themed land, and the Millennium Falcon: Smugglers Run ride has been overlaid with a “Mandalorian and Grogu” storyline.
Then of course, there’s merchandise. (Famously, fans rushed to buy items of Grogu — known colloquially as Baby Yoda — after “The Mandalorian” show debuted in 2019, though products didn’t arrive for months. Once available, 13 million Grogu toys were sold in the two years after they were released, Disney has said.)
“It’s not using cinema in the way ‘Star Wars’ used cinema before,” said Carmelo Esterrich, a professor at the school of communication and culture at Columbia College Chicago, who has written about how “Star Wars” is a reflection of American culture. “It’s using the franchise of television and the power machine of Grogu to bring it to the big screen.”
Grogu’s appeal highlights an important goal for the franchise: expanding beyond its original fan base to new audiences. Although “The Mandalorian and Grogu” builds on storylines from the streaming show, the film was designed to be accessible to viewers who had never watched it.
“I hope that our excitement and joy and love of ‘Star Wars’ translates to a new generation of fans seeing it, experiencing it the way we did for a long time,” director Jon Favreau told an audience in April at the CinemaCon trade conference during a presentation about Disney’s film lineup.
Early ticket sale tracking indicated strong interest from older men, who have historically been the core audience for “Star Wars” films. But after an extensive marketing campaign, Disney’s studio estimates now show audiences are younger, with more families and women represented.
To date, “The Mandalorian” is still the most popular Disney+ series. The show, which has run for three seasons, has won 15 Emmys, including for sound mixing and special effects. The critical and fan response, as well as the opportunity to explore new characters’ backstories, led Lucasfilm to choose this show to spin off into a movie, according to sources close to the studio.
Since the launch of the platform in November 2019, “The Mandalorian” and other “Star Wars” titles such as “The Acolyte” and the second season of “Andor” have seen relatively high audience demand, according to an analysis by Parrot Analytics, a firm that tracks streaming data. Despite several big hits, the average demand for live-action television series set in the galaxy far, far away have shown a slight downward trend over time.
In contrast, demand for live-action series from Disney-owned Marvel Studios has held stable since the premiere of its first streaming show, “WandaVision.” Though Marvel’s television offerings outnumber those of “Star Wars,” overall audience interest in the superhero shows is less than the biggest “Star Wars” hits and more comparable to some of Lucasfilm’s lesser-hyped titles, including “Skeleton Crew,” according to Parrot Analytics.
In the end, “The Mandalorian and Grogu” needs to keep audience interest in “Star Wars” on the big screen. Next year, Lucasfilm will release “Star Wars: Starfighter,” a film starring Ryan Gosling and directed by Shawn Levy of “Deadpool & Wolverine” that has generated great interest, particularly given Gosling’s turn in “Project Hail Mary.”
“This is a safe reentry point,” Bock of Exhibitor Relations said of “The Mandalorian” movie. “If Grogu can bring in the families and if ‘The Mandalorian’ continues to bring in the audiences of the old movies, maybe they can bridge these generations like classic ‘Star Wars’ once did.”
Business
Oil Prices Fall Sharply on News of Possible Iran Deal
Oil prices fell sharply on Monday after American officials said the United States and Iran had agreed in principle to a peace deal that would reopen the Strait of Hormuz, a vital trading route for oil and natural gas that normally carries up to one-fifth of the world’s oil supply. But final approval of a deal could take a while.
President Trump vowed on Monday that either a deal would be “great and meaningful” or “there will be no deal.” Esmaeil Baghaei, the Iranian foreign ministry spokesman, said on Monday that “no one can claim that the signing of an agreement is imminent,” according to Iran’s state broadcaster. Iran’s top negotiators, led by Mohammad Bagher Ghalibaf, the speaker of Parliament, arrived in Qatar on Monday for further talks, Iranian state media said.
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