2023-04-05 12:54:17 ET
Sweetgreen ( NYSE: SG ) shares marked a double-digit percentage decline on Wednesday as Chipotle Mexican Grill ( CMG ) accused the chain of trademark infringement.
The suit, filed in the U.S. District Court for the Southern District of California, follows the introduction of the “Chipotle Chicken Burrito Bowl” at Sweetgreen on March 30. The new menu item consists of blackened chicken, chipotle salsa, wild rice, and lime cilantro black beans, sliced tomatoes, and cabbage.
“Inspired by bold chipotle spices, this protein-heavy option balances a brand new flavor profile for sweetgreen, with whole grains and better-for-you ingredients that our customers love,” Nicolas Jammet, Sweetgreen Co-Founder and Chief Concept Officer, commented upon the new item’s launch.
Chipotle contends that the use of “Chipotle” in Sweetgreen ads and menu presentations uses a similar font to that utilized by Chipotle and is presented in a color palette akin to the burrito chain’s trademarked Adobo Red color scheme. As such, the menu offering is “very similar and directly competitive” with Chipotle’s burrito bowl and may confuse consumers. A cease and desist letter was sent to Sweetgreen ( SG ) prior to the suit, according to the complaint.
Sweetgreen ( SG ) stock slid 11.56% in afternoon trading on Wednesday.
Read more on why Seeking Alpha’s Quant team has rated the stock a Sell since late 2022 .
For further details see:
Sweetgreen stock slides as Chipotle files lawsuit