Why salad chains have popped up all over US cities

Editors note: To clarify, at 5:51, we state that the average price at Chopt and Just Salad is over $US10 ($AU13). In this instance, we are referring specifically to the salad menu items.

Following is a transcript of the video.

Narrator: This is what most people consider a salad. It costs about $US1 ($AU1) to make, and it’s not very exciting. But this is a salad from Sweetgreen. It’s packed full of ingredients and it costs a whopping $US12 ($AU16).50. If you buy this every week…

Claire Banderas: My 365-day total is $US613 ($AU827).

Narrator: So, how did we get from here to there? In the past two decades, salad has gone from a side dish to something you brag about on Instagram. And the biggest player, Sweetgreen, is valued at $US1 ($AU1).6 billion. That’s a lot of salad. Its popularity means more people might be making the choice to eat healthier. But at an average of over $US10 ($AU13) per meal, the healthy revolution could be leaving millions of Americans behind.

Let’s talk salad history. Salad has actually had a ton of different phases, from Jell-O salads to salad bars and of course, the classic Caesar salad. The idea of salad began to take off in the early 20th century. But salad was often associated with refinement and wealth because you needed to own a fridge to chill your Jell-O salad.

Salads of that era included things like lime cheese salad, Perfection salad, and an egg cream cheese salad. But a couple of decades later, salad had gained a pretty bad reputation.

Seinfeld Clip: Jerry, I’m thrilled you like my mutton. I was afraid you only ate salad.

Jerry Seinfeld: Hey, salad’s got nothing on this mutton.

Narrator: For a long time, it was only thought of as diet food.

Archive Clip: Those who are reducing learn to include many vegetables and fruits in their diet.

Narrator: Salad at that time just wasn’t a full meal. One of the first salad-focused restaurants actually opened back in 1986, over 20 years before Sweetgreen. In an interview with the Atlantic, CEO Paul Steck said: “We didn’t have a single competitor that we could identify in the country, and now I could probably identify 50.”

Hans Taparia: For the longest time, salads were simply boring. Greens are central to our diets, and yet we haven’t been consuming very much of it.

Narrator: But in the early 2000s, the way that people thought about food started to change. Adult obesity rates had nearly doubled in just two decades. And in 1997 obesity was declared an epidemic. One contributor to a poor diet is consuming a lot of food away from home where the most convenient options are often the least nutritious. As consumers became more health-conscious, salad chains offered a healthy food option away from home.

In 2001, Chopt the self-titled “Creative Salad Company,” opened its first location in New York City. Chopt prioritized high-quality ingredients at a time when consumers were seeking out more nutritious options. It wasn’t the first to experiment with salad, but since then, many companies have followed the customized salad production model. Like Just Salad in 2006 and Sweetgreen in 2007.

Taparia: The big change has been around the types of ingredients and the flavors we’re using in salads. Falafel, and tofu, and lentils. Plus a combination of interesting flavors, and that’s made it possible for a salad to become a complete meal.

Narrator: All of these innovations fought back against the boring salad label, and they appealed to career-focused millennials who wanted a quick, healthy lunch. By offering mobile orders and the ability to have salad delivered right inside your office. In fact, Sweetgreen has almost 700 of these pickup outposts.

But it’s not just salad chain versus burger joint. Salad chains differentiated themselves from other fast-casual restaurants by focusing on fresh ingredients.

Taparia: Fresh is key.

Narrator: There’s also a focus on local and seasonal ingredients. Fresh & Co and Dig Inn, for example, both bought a farm to source ingredients. Sweetgreen works with over 300 farms. These chains pride themselves on transparency and want customers to know where their ingredients come from. Putting everything on display right in front of the customer. No more mystery meat. Many of these chains have also adopted a Chipotle-like production model. Giving customers the option to customize their order exactly the way they want.

Taparia: That innovation is what’s driving this growth.

Narrator: And it’s paid off in a big way.

Taparia: Walk through midtown Manhattan, throw a stone, and chances are you’ll hit a salad chain.

Narrator: Sweetgreen now has over 100 locations and over 1.5 million app users. In an interview with Recode, Sweetgreen cofounder Jonathan Neman said: “We see us as the McDonald’s of our generation.” But it’s not just Sweetgreen. Other chains are growing too.

Chopt now has 65 locations and Just Salad has over 40. But they’re not just successful businesses. A huge affinity has grown around these brands. Even thought fast-food chains have tried offering “healthy” options for a while, they’re still associated with an unhealthy brand. In 2013, McDonald’s told investors that salad made up only 2% to 3% of sales in the US.

Taparia: Brands like McDonald’s and Burger King are having great difficulty being credible with healthy food.

Narrator: Sweetgreen isn’t just a restaurant. It’s associated with a trendy lifestyle.

Taparia: And they pulled a marketing chapter out of brands like Warby Parker or Lululemon to create impact brands that are aspirational. They’ve turned them into lifestyle brands and very hip lifestyle brands.

Narrator: Even its bags are trendy. But it’s not a lifestyle that’s accessible to everyone. In New York City, the cheapest salad at Sweetgreen cost over $US11 ($AU15).

Lisa Paradise: My typical order at Sweetgreen costs probably $US14 ($AU19) to $US17 ($AU23).

Grant Tyler: Around $US14 ($AU19).50.

Irene Kim: $US18 ($AU24) to $US20 ($AU27).

Paradise: I’m apologizing to my wallet.

Narrator: But it’s not just Sweetgreen. The average price at Chopt and Just Salad is over $US10 ($AU13) which makes fast food way more affordable than any of these salads. These chains are also usually located in higher-income neighborhoods and areas with a lot of office workers. Like in Manhattan, most are concentrated in midtown and lower Manhattan. Where several neighborhoods have a median income of over $US100,000 ($AU134,855).

Sam Polk: Healthy food has also become a luxury product that only a few can afford.

Narrator: That’s Sam Polk. He started a salad chain called Everytable. Instead of having one price for its food, Everytable sets its prices based on the area it’s selling in.

Polk: Our meals cost $US7 ($AU9) to $US8 ($AU11) in some communities, in locations like Compton and Watts and South LA, which are communities that have basically been left out of a functioning food system, we’ll sell the same meals for $US5 ($AU7) or $US6 ($AU8).

Narrator: Which is a lot closer to fast food prices. Everytable is able to offer these lower prices by premaking its meals in centralized kitchens instead of assembling them at each Everytable location. It hopes that by providing nutritious food in previously underserved areas, it can help with the problem of food deserts. But Sam doesn’t vilify his competitors.

Polk: A lot of that is unfair on some level. It’s not like Sweetgreen is selling a salad for $US15 ($AU20) and they’re making it for four and they’re just taking all this profit. Sweetgreen’s restaurants are very complicated, and very expensive, and there’s a ton of people in them. So when they’re selling a salad for $US15 ($AU20), it’s basically costing them $US12 ($AU16) to make it and they’re making their little spread on it.

Taparia: In the case of chains like Sweetgreen and Chopt, they are opening in very high-income neighborhoods. They have very high rent costs, they’re very labor-intensive and they have high build-out costs. That’s one of the big drivers behind their high price point.

Narrator: We reached out to Sweetgreen about its prices, but it hasn’t returned Insider’s request for comment.

But price is a huge deciding factor when buying food. A $US12 ($AU16) salad simply isn’t an option for a lot of people. Just like its predecessor, a bowl from Sweetgreen is often associated with wealth or disposable income.

One study found that between 1999 and 2012, diets had improved more for wealthy Americans than those with lower incomes. As more brands try to follow Sweetgreen’s success, this problem could get worse.

But Sweetgreen is still only a fraction of the size of McDonald’s, Starbucks, or even Chipotle. Right now, there are a lot of competing salad chains. Over time, smaller brands might have a harder time standing out. And some analysts think that all these chains will likely face challenges when expanding outside of cities.

The salad trend is likely to keep growing, and ultimately, that’s a good thing if it means more people are choosing vegetables over fast food. But if Sweetgreen really wants to be the next McDonald’s, it’s going to have to make its food a lot more accessible.

EDITOR’S NOTE: This video was originally published in July 2020.