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AIPROPX ReportCNBC · 3h ago
Sweetgreen isn't linked to cyclospora, but many customers still don't want salads: 'I didn't think it would last' this long, CEO…
Jonathan Neman hoped to spend August 1 celebrating Sweetgreen's 19th birthday.
Instead, the fast-casual restaurant chain's CEO and co-founder woke up pondering the country's ongoing cyclospora outbreak . His first thought of the day, he says: "Oh man, this is real. This sucks."
Sweetgreen has not been linked to the monthslong outbreak, which has nonetheless put a damper on the business as American consumers shy away from lettuce and other produce. The company cut its full-year outlook while reporting its second-quarter earnings on August 6, projecting steeper declines in foot traffic and sales. Its stock price has dropped approximately 30% in the last month, as of Wednesday's market close.
Neman's business isn't alone. Daily foot traffic broadly fell throughout mid-to-late July at Chopt Creative Salad Co. and Panera Bread locations across the country, compared to roughly the first half of 2026, according to data provided by Placer.ai, a location analytics firm. Neither Chopt nor Panera has been linked to the cyclospora outbreak.
The cyclospora outbreak is the largest multistate one on record, with over 10,000 confirmed cases across 47 states since May, according to the Centers for Disease Control and Prevention . Though such illnesses are rarely fatal, the CDC has confirmed two deaths related to this outbreak, as of Thursday morning.
On July 17, the U.S. Food and Drug Administration linked the outbreak to iceberg lettuce sourced in Mexico by fruit and vegetable producer, Taylor Farms. Taco Bell has been the only nationwide restaurant chain linked to the contaminated lettuce — Sweetgreen doesn't use iceberg lettuce, and all its lettuce comes from the U.S., the company said in a July 22 statement — but consumers have been wary of purchasing produce at restaurants and grocery stores for much of the summer.
Navigating uncertainty and sticking to your values while trying to successfully run a business can prove challenging in moments like these. CNBC Make It spoke with Neman, 41, about how he's responding to the cyclospora outbreak and what it's taught him about leadership along the way.
CNBC Make It: Walk me through your thought process and immediate actions the day you found out about the cyclospora outbreak.
Jonathan Neman: We track these things closely. Our [communications team] is looking at it. I'm looking at it personally, as is our supply chain [team]. They flagged it early, and the first gut reaction was making sure we were safe and taking care of our customers.
There was not a lot of information out there at first. If you remember, people were kind of like, "Just avoid all fresh produce." We immediately began speaking to all of our suppliers and growers: Had they been contacted by authorities? Had they heard of anything? We have a lot of food safety practices that we look at carefully, including any reported illnesses, and we were able to see that we were not impacted ourselves.
We have what we call a CRT — crisis response team — that we were able to stand up quickly. [That team met daily], at some points twice a day, to triage everything that's going on in terms of the supply chain side, the comms side and how we steer the business throughout this ... We had a playbook for how to deal with these things, and we just had to operate the playbook.
Everyone's very competitive at Sweetgreen. We're very proud of what we do, so there was this moment where, you know, [our employees felt like] their business was being impacted, and a lot of what I have had to do as a leader is letting people know: This too shall pass. This is, in a lot of ways, a moment for us to tell our story to the world — that we do have different supply chain, sourcing from farmers.
CNBC Make It: Did the crisis strategy change at all as Sweetgreen saw real impact — slower traffic, sinking stock price — due to the outbreak?
Neman: There's the safety side of the playbook — making sure that we're not impacted, our customers are safe. And then there's the piece around navigating the business throughout this, and we can't just wait until people are, you know, ready to eat greens again.
We wrote comms internally for our team members and store managers, and stood up a number of virtual sessions with our head coaches [general managers] to talk them through: What's going on? What do we know? What are we doing? There's a lot of work in terms of [external] comms and social media and telling the truth, in terms of narrative. We have to do a good job of understanding what's actually happening and where is there kind of a panic or hysteria around how media and social media has portrayed it.
And then there's a lot of work in terms of: How do we make sure we can protect the business throughout this? For example, we started really promoting our hot food. Maybe people don't know, and they should, that salads are actually less than 50% of our business. Wraps are about 20%, plates are almost another 20%, warm bowls are another 30 or 40% We began promoting those things. [Consumers were] seeing those in our emails, and [we've been] doing some promos, and just trying to get people back into restaurants.
I have a town hall later today, and what I will tell them is: This will pass, so we just got to use this as an opportunity to become a stronger business, stronger tools, systems, processes, leadership, better marketing and communications. And then when we come out of this, if we can crawl out of this while it's going on, and then it ends, we're going to be in a much better place.
CNBC Make It: Has your confidence wavered at any point during this cyclospora outbreak? How do you maintain confidence in a crisis?
Neman: When crisis hits, I spring into action, and I don't process it. I'm just like, "All right, what do we got to do?" Like, let's go. The adrenaline is driving me and the team.
I didn't think it would last a month, or two months, or as long as it's [been], as long as it may last. These are the moments that test yo...
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