The Cost of Loyalty: Sweetgreen’s Sweetpass Is the Latest in a Wave of Restaurant Subscription Programs
Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.
This is the web version of dot.LA’s daily newsletter. Sign up to get the latest news on Southern California’s tech, startup and venture capital scene.
Good news for Los Angeles’ salad-obsessed populous: Sweetgreen is the latest in a string of restaurants to embrace a loyalty program.
Sweetpass, announced Monday, is the salad chain’s latest membership program. According to the press release, there’s a free version and a premium version of the subscription called Sweetpass+ with extra perks that cost $10 monthly. It’s not the first time Sweetgreen’s experimented with a loyalty program; the Culver City-based chain began testing various membership options over the years to gauge what customers wanted, CEO Johnathan Neman said in a statement Monday.
Originally, Sweetgreen’s loyalty program was based on “challenges,” with rewards in the form of discounts doled out to people who bought a specific amount of food in a given week (usually around $20, which for bowls starting at $11, wasn’t a bad deal). That still exists, but the Sweetpass+ version now offers more rewards like $3 off daily orders, exclusive menu items and access to an online store with exclusive merchandise.
The news was a welcome uptick for Sweetgreen’s stock, which saw a roughly 2% increase Monday morning. Sweetgreen went public in June 2021 at a $2.7 billion valuation after raising more than $671 million in venture funding.
To that end, the salad chain's pivot to the subscription economy illustrates a larger trend among restaurants. In January, Chipotle announced a program called Freepotlethat promised existing members the chance to win free food 10 times throughout the year if they placed at least a $5 order.
Starbucks has long had a rewards program where buyers earn one “star” for every $1 spent that can be redeemed for free food or drinks. And competitor Dunkin’ Donuts operates Dunkin’ Rewards, which gives members 10 points for every $1 spent to count towards free drinks.
According to the New York Times, the pandemic brought online ordering to new heights with the global market size ballooning to $150 billion in 2021. Online ordering went hand-in-hand with the loyalty program, as it became a viable way to keep people engaged with their services online while also attempting to foster any sense of community lost in the in-person ordering process.
The Times reported that Chipotle’s rewards program was off to a robust start – Chipotle CEO Brian Niccol told analysts in February that rewards membership had grown 20% annually to 31.6 million. And Chipotle has tried to make the program more personal; Niccol also told analysts that 60% of rewards promotions were personalized, as the company tries to make rewards members feel individually appreciated for their loyalty.
For the consumer, it’s usually a no-brainer: Everyone likes free food.
But while restaurants are eager to expand their loyalty programs, many are also coping with inflation and realizing that there’s a tightrope to walk in giving the clientele a great deal while also not losing money. All of the companies listed here have retooled their schemes in recent months, including Sweetgreen.
This restructuring has riled up customers who feel the whiplash isn’t worth it. In February, a disgruntled former Dunkin loyalist interviewed by the New York Times said her free drink supply was cut in half, down to one per month after the company changed its rewards structure. Dismayed, she switched to Starbucks, which later upped the purchasing threshold for its rewards.
It’s a story we’ll likely see play out repeatedly, as these companies continue to try and strike the right balance between cultivating customer loyalty without losing money.
Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.
