Sweetgreen Seeks a Salad Delivery Empire With First Acquisition

June 17, 2019

By Rebecca Heilweil

In its quest to expand into delivery, the fast-food salad joint Sweetgreen has purchased the D.C. delivery food company Galley Foods. The acquisition, the terms of which were not disclosed, signals Sweetgreen's intent to perfect its logistics as it prepares to launch its own delivery service.

Galley Foods is Sweetgreen's first acquisition. Like Sweetgreen, Galley Foods is in the healthy fast-food space, though its menu goes beyond Sweetgreen's premiere product, salads.

"As we look ahead and really want to reach more customers, with less friction, we looked at their expertise in delivery," Sweetgreen co-founder Nic Jammet told Cheddar.

"Having the Galley Foods team as part of the greater team gives us a ton of unparalleled knowledge of delivery logistics and that technology and ultimately how to reach the customer with our food."

He said that moving into delivery requires attention to both transporting Sweetgreen's meals quickly and maintaining a high-quality product.

In a letter to customers about the acquisition, Galley Foods CEO Alan Clifford said its customers will remain able to order food from the company, but it will be shrinking its service area from the mid-Atlantic region to just the D.C. metro area.

"We will share our combined teams across both brands, so don't be surprised if you see your favorite Galley driver delivering your Sweetgreen salad soon. Plus, in the coming months on Galley, you will see improvements such as meal customization, utilization of the world-class Sweetgreen supply chain to provide more delicious options, and more," the letter said.

Clifford, who is joining Sweetgreen as a vice president of logistics, said the company has delivered more than 1.5 million meals in its four years.

Sweetgreen has raised at least $328 million, according to Crunchbase since its founding in 2007.

Much of that funding came late last year when the salad startup raised $200 million in a round of fundraising led by Fidelity Investments. While the company has built an empire serving salads in its stores, Sweetgreen's executives are increasingly looking toward other ways of reaching customers.

Jammet says that the fastest growing portion of Sweetgreen's business is digital, and that more than 50 percent of the company's transactions happen online (including payments made on the Sweetgreen app and pre-pickup ordering).

"Once we add delivery, we think that will continue to grow," said Jammet.

The company is also piloting a program called Outpost, a catering-esque service that delivers salads directly to offices ー including some WeWorks ー for no fee.

"There's a larger conversation going on in the country around people's relationship with food, and we get to be a brand that really celebrates that," Jammet told Cheddar late last year.

"It's about this broader change in how people eat, and how they define fast food."