Dive Brief:
- Sweetgreen is selling Spyce, which developed its automated Infinite Kitchen makeline, to Wonder for $186.4 million, the company announced Thursday.
- The salad brand will continue to deploy Infinite Kitchen technology in its stores as part of the agreement. It is currently in over 20 restaurants.
- Sweetgreen will use the proceeds of Spyce’s sale “to reinvest in key priorities and sharpen its focus on growth and profitability,” following three consecutive quarters of same-store sales declines that saw the brand’s losses mount.
Dive Insight:
This cash infusion could help Sweetgreen recover from significant consumer pullback, which sparked sharp contractions in same-store sales in Q2 and Q3, according to its earnings releases. Losses also reached $36 million, or a negative 21% margins, in Q3 — significantly worse than the year-ago period.
To cope with these headwinds, Sweetgreen has eliminated 10% of open and existing roles within its support center teams and discontinued its popular but operationally complex Ripple Fries. The Infinite Kitchen has been a significant part of Sweetgreen’s strategy for more than four years, starting with the brand’s acquisition of Spyce for about $70 million in 2021.
According to the release, the Infinite Kitchen has the “ability to deliver significantly faster throughput and enhanced food quality, accuracy, and consistency.”
In exchange for the technology division, Sweetgreen will receive $100 million in cash and $86.4 million in Wonder stock based on the price per share of the food hall and delivery company’s latest funding round.
As part of the sale, Sweetgreen and Spyce reached supply and licensing agreements that will allow Sweetgreen to continue to deploy Infinite Kitchens across its restaurants after the sale, meaning the tech remains central to the chain’s scaling efforts, Sweetgreen’s co-founder and CEO Jonathan Neman said.
Approximately 38 Spyce employees, including its co-founders Michael Farid, Kale Rogers, Brady Knight and Luke Schlueter, will transition to working for Wonder as part of the acquisition.
Wonder, which is led by Marc Lore, has been working to rapidly scale its system following major infusions of funding in May of this year and in March 2024. Wonder bought Grubhub for $650 million in late 2024, and in 2023 it acquired the meal kit company Blue Apron. The food hall company has about 80 locations, and its acquisitions set it up to be “a tech-driven food platform owning both robotics and infrastructure,” according to the press release.
