People want new stuff all the time
But it has to be good. Also: Why Sweetgreen’s fries are canceled. And notes from Q2 earnings.
Hello hello! It’s Dan Frommer, back with The New Consumer after a quick mid-summer break. (Welcome, new members! I’ve topped you up with a few extra weeks.) How’s August looking? Anything interesting on your radar?
If you need a beachy escape, I’ve just been on two podcasts, talking mostly about the big, new Consumer Trends report we published with Coefficient Capital. You can catch me on Day One FM, from the excellent Day One Agency, and on HRN’s Brands for a Better World. Thanks both for having me!
Coming soon, I’ll be presenting again at the BRXND Marketing x AI Conference, this time in NYC on Sept. 18. The event is sold out, but they’re open to adding new sponsors, which, of course, would get you and your brand in the room. Happy to connect you — let me know.
Sweetgreen is the latest fast-casual restaurant group to say that its business has been getting worse this year: Its stock fell 26% yesterday after reporting that same-store sales declined 7.6% year over year in the June quarter, its worst performance since the peak Covid era.
Part of its recovery plan is to heavily lean back onto a seasonal menu of limited-time salads and bowls, which it stopped doing last year while introducing steak to its menu.
Sweetgreen’s current summer specials include a Chicken Caprese bowl with pesto-flecked balls of fresh mozzarella (I enjoyed!), the return of its popular Elote Bowl with roasted corn and peppers, and a new spin on its summer peach salad with goat cheese. Customers are choosing one of these items about 15% of the time, co-founder and CEO Jonathan Neman said on the company’s earnings call, and a third of people who’ve tried one have returned within two weeks.
It now plans to launch two more seasonal menus this year and at least eight seasonal or limited-time “moments” next year, Neman said.
I’ll get into Sweetgreen’s Q2 specifics in a bit — some of the weakness there is unique, and it’s blaming some on the broader consumer.
But if you zoom out, it’s a good reminder that newness — a regular cadence of new, appealing product launches — is increasingly important in driving growth for consumer businesses, and even for maintaining stability. People like new things, and they want them all the time. If they’re not getting them from you, they’ll get them from someone else.
Chipotle is discovering this, too.
For decades, the fast-casual Mexican chain has succeeded by barely changing its simple menu, focusing on extreme consistency and value. But its occasional limited-time offerings — developed and tested in a stage-gate process — are often hits, including this summer’s Chipotle Honey Chicken.
Chart of the Day
Last quarter, while same-store sales fell 4%, Chipotle Honey Chicken was a bright spot, included in one of four orders, “the highest incidence rate of all of our limited-time offers,” new CEO Scott Boatwright said on the company’s Q2 call. It will be back. (Hey, sweets make people happy!) And after launching its first new dip in five years, Adobo Ranch, the company sees “more opportunity in sides and dips in the future,” Boatwright said.
This was also one of the more interesting things I learned from Ben McKean, the founder and CEO of Hungryroot, a subscription-based grocery delivery business that is obsessively focused on customer retention.