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Soggy fries, lettuce woes: LA-based Sweetgreen’s $5 billion wipeout

February 26, 2026

By Redd Brown | Bloomberg

It turns out, making a healthier French fry is a nightmare.

Sweetgreen workers warned their managers that the salad chain’s attempt — crinkle-cut potatoes air-fried in avocado oil — was too labor intensive.

But senior management, led by Chief Executive Officer Jonathan Neman and encouraged by a share price that climbed on every mention of the fast-food moonshot, persisted. Last March, Ripple Fries made their nationwide debut.

Soon, harried workers were coming up with workarounds to avoid the constant preparation needed to keep the fries hot and crispy. By fall, they were pulled from the menu.

The side item’s doomed introduction and swift demise are a microcosm of Sweetgreen’s disastrous year, in which the Los Angeles-based company squandered almost 80% of its market value. Executives have blamed the brand’s woes on young people cutting back on going out to eat and a tough economic climate that has hurt the restaurant industry.

Sweetgreen has positioned itself as a farm-to-table lifestyle brand on a mission to “reimagine fast food for a new era.” Photo Illustration: Nigel Lujan Jones/Bloomberg

But Ripple Fries were only the latest instance in which Sweetgreen underestimated logistical and operational complexities. It’s not just the high costs of quality ingredients and compostable packaging that have kept the company from ever turning a profit — avoidable mistakes also are to blame, analysts say.

“They don’t need to reinvent the wheel,” said Logan Reich, an analyst with RBC Capital Markets. “They just need to execute in a more consistent way.”

On Thursday, Sweetgreen is expected to report that same-store sales fell 8% in 2025, according to analyst estimates compiled by Bloomberg.

The chain’s rivals, while also struggling, have fared better. And customers say Sweetgreen just doesn’t taste as good as they remember.

“It used to hit,” said Marika Minor, 25, after eating at a Sweetgreen in Los Angeles recently. Now, she said, “there’s a quality difference.”

She’d ordered a Harvest Bowl but only ate half before tossing her crumpled napkin on top of the leftovers. The roasted chicken felt “more crumbly,” said Minor, who works in social media.

“It’s satisfying, but it’s not 20-dollar-satisfying.”

A spokesperson for Sweetgreen said the company is taking steps to strengthen operations with a “deeply experienced leadership team and a clear strategy.” It recently brought in a new chief financial officer and a new chief operating officer, both former Chipotle executives. It has also expanded its menu beyond salads and bowls, adding wraps, and introduced a new process for testing items before broadly rolling them out.

From its start two decades ago, Sweetgreen positioned itself as a farm-to-table lifestyle brand that would “reimagine fast food for a new era.” Sourcing premium ingredients from local farmers was the top priority, a philosophy the three founders vowed to stick to even as the chain grew.

They routinely touted their lack of restaurant experience as an advantage that enabled them to dream big: hosting an annual music and food festival called Sweetlife that featured high-profile performers including Kendrick Lamar and Lana Del Rey, pioneering an in-house mobile ordering app and orchestrating limited-edition merch drops for tote bags and T-shirts that read “Friend of Plants” and “Burrata 2020.”

When the fast-casual chain went public in 2021, in the first full day of trading investors valued the company at $5.7 billion. They were hyped on the founders’ vision and the company’s new “Infinite Kitchen” robot technology, which promised to transform restaurant prep.

Yet, in the pursuit of its mission, Sweetgreen repeatedly ran into costly supply issues — often without sufficient backup plans.

In late 2022, the salad chain was hit by a romaine shortage after intense heat and a virus wiped out crops in California and Arizona. Most national restaurant brands have several vendors spread out geographically for key ingredients in case disruptions arise, said David Henkes, senior principal at foodservice industry data firm Technomic.

Sweetgreen said it had five to six romaine growers around the country at the time. But it was still caught flat-footed, paying up to twice the usual cost for romaine before briefly using other greens in its salads.

Its restaurant-level profit margin fell in the last quarter of that year, which the company attributed to an increase in food, beverage and packaging costs associated with romaine, arugula and tomato shortages.

Sweetgreen has repeatedly run into problems with its supply chain. Photographer:Angus Mordant/Bloomberg

Neman, one of the co-founders, said that while macroeconomic conditions had become “more complicated and unpredictable” since Sweetgreen’s IPO, the company was also to blame. In its first full year as a public company, Sweetgreen lost more than $190 million — roughly $37 million more than the year before.

“We know that our execution was not up to our standards,” he said on a call with investors.

Yet the company continued to struggle with that very thing. In early 2023, the company paid elevated packaging costs after its supplier of bowls, which were compostable and made without so-called forever chemicals, ran into financial trouble. It recorded a loss of $34 million that quarter.

A limited supply network creates a “huge amount of vulnerabilities,” Henkes said.

“If you don’t have contingency plans in place where you have backup suppliers,” he said, “then you’re at the mercy of the market.”

Facing impatient investors, Sweetgreen soon devised a cost-cutting plan that threatened the very ideals on which the founders promised to never compromise.

It called for “transitioning from organic to conventional” versions of its ingredients, including almonds, cashew butter and olive oil, according to an internal presentation viewed by Bloomberg. It was a follow-on to a previous company decision to move to “sub chicken.”

A spokesperson for Sweetgreen said changing the company’s chicken didn’t reflect a strategic decision to downgrade to an inferior product, but that several major chicken suppliers reversed their antibiotic-free commitments in 2023. Scaling the chain meant that the company couldn’t always secure enough of its preferred chickens, the spokesperson said, so it had to make substitutions.

The company also noted that organic certification can be cost-prohibitive and administratively burdensome for small farms, and that many ingredients don’t come in organic at the scale Sweetgreen needs. The substitutions still met Sweetgreen’s sourcing and quality specifications, the spokesperson said.

For Sweetgreen’s founders, the challenge has been reconciling their vision with the need to make money.

“They have been precious around the brand,” said Rahul Krotthapalli, an analyst at JP Morgan.

The Ripple Fries fiasco was yet another operational miscalculation made in the name of the company’s ethos. The fries were part of Sweetgreen’s push to eliminate seed oils, which critics say are chemically processed and contribute to inflammation.

The move made sense from a branding perspective — but the business justification was murky. Seed oils, such as canola and corn oils, are ubiquitous because of their lower cost and neutral flavor. Swapping them out can be an expensive, cumbersome process, requiring months of research and development and employee retraining, said Neil Doherty, senior director of business growth and culinary strategy at Sysco.

Sure enough, Ripple Fries became an unwieldy endeavor.

During test runs, workers at the salad chain were overwhelmed by the complicated prep. Because the fries were air-fried and made with no additives, they had to bake new batches every hour to keep them fresh, leading to kitchen bottlenecks, according to two former store managers who were not authorized to speak publicly.

Sweetgreen first delayed the debut of the fries, a company spokesperson said, but eventually greenlit a nationwide rollout.

Things only got worse. To ensure maximum crispiness, the company mandated new fries be baked every half hour. The process was so involved that workers would avoid it: They’d fire up empty ovens to trick sensors that could track whether metrics were being met, according to a former manager who oversaw multiple locations.

Chief Operating Officer Jason Cochran, who joined Sweetgreen shortly after the launch, pushed management to ditch the fries as they were “killing operations,” according to Citi analyst Jon Tower.

Neman told investors on the company’s earnings call in August that the fries would be discontinued, saying they had become a “distraction for our teams.”

With so many locations underperforming, Cochran moved quickly to stabilize the restaurants, implementing checklists and scorecards and introducing a new menu testing protocol.

In the months since Sweetgreen discontinued Ripple Fries, it has suffered more blows.

The company sold off the robotics unit that had boosted its stock when it first went public — it couldn’t add the expensive kitchen automation technology to its restaurants fast enough to deliver the profitability boost it had promised. It scaled back its expansion plans, now only planning on as few as 15 new restaurants this year, down from the 37 projected to open in 2025. Then, in January, one of the co-founders left, saying it was for personal reasons.

In a statement, a Sweetgreen spokesperson said the chain is back on track after a difficult year, which allowed it to “take a clear-eyed look at the business.”

But perhaps Sweetgreen is dealing with an issue its own CEO diagnosed on a podcast in 2023.

“Most food companies, as they get bigger, they typically get worse,” Neman said. “Scale kills the product.”

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