Amazon's playbook applied to Sweetgreen
Personalized nutrition increases perceived value while automation could reduce prices
Should Sweetgreen lower its price to gain market share? Can they do this while growing restaurant-level profit?
This is Amazon’s playbook applied to Sweetgreen.
It’s 2026. The future of Sweetgreen is here.
You’ve ordered on the Sweetgreen app. The meal is personalized to YOU - taste, health goals, biomarkers. Sweetgreen calls this Spotify for Food.
You walk into the store🚶♂️
The robotic Infinite Kitchen assembles your meal 🤖
The only question remains… the price you pay.
If the price of Sweetgreen today = 💰💰, do you now pay 💰 or 💰💰 or 💰💰💰?
This is part two of The Modern Acre newsletter featuring Sweetgreen.
In the words of Scott Galloway, there are three lines in a business: Perceived Value, Selling Price, and Cost to Produce.
Execs can increase shareholder value through:
1️⃣ Increase perceived value (i.e., remove seed oils) ➕ keep prices the same 🟰 attract new customers and drive loyalty 🟰 increase market share 🟰 higher GM$ per store.
2️⃣ Increase perceived value ➕ increase price 🟰 higher gross margin dollars / unit 🟰 higher GM$ per store.
3️⃣ Lower costs ➕ keep prices the same 🟰 higher gross margin dollars / unit 🟰 higher GM$ per store.
Sweetgreen team members cook and prep or assemble. Infinite Kitchen automates most of the assembly, reducing labor costs.
These savings could flow to the bottom line or be passed along to customers via lower prices. If the latter, the delta between Perceived Value (constant) and Price (decreasing) grows.
This delta grows even further as Perceived Value is not constant but rather growing through the Spotify for Food initiative. This now becomes a supercharged combo of Scenarios 1️⃣ and 3️⃣.
Is there an example where a company executes against this dual strategy of increasing perceived value while lowering its price? If so, they almost certainly are market share leaders as the delta between value and price far exceeds its competitors.
Cue: Amazon.
Amazon’s ecommerce business is built on the backs of both levers:
🅰️ By offering free 2-day shipping, then 1-day, and now same day, Amazon continues to increase Perceived Value.
🅱️ By bringing cost centers in-house (data processing, warehousing, logistics), Amazon passes along some cost savings by often having the lowest prices on the market.
The result: 40% share of the US ecommerce market.
Sweetgreen may be able to increase its market share through the Amazon dual strategy: a better value prop (tailored nutrition) at lower costs to produce (automation) at lower prices to customers, driving loyalty while attracting the fried chicken and burger clientele.
An equally important KPI to track is restaurant-level profit. I’ve created a Pro Forma P&L for Sweetgreen across three scenarios: Increase, Maintain, and Decrease Selling Price. It projects revenue and restaurant-level profit.
Link to model here.
And if you missed Part 1 on Sweetgreen, check it out here.
Please let me know your thoughts in the comments below!
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