Chipotle Mexican Grill Case Study

Chipotle saw an opportunity in the fast-casual restaurant industry and launched an innovative concept. It believes that fresh and quality ingredients are key and that customers are willing to pay more for such ingredients. To ensure such ingredients, Chipotle uses a large amount of organic food in their restaurants. This not only creates fresher and healthier food options for consumers, but also assists local farms that supply the organic food. Not only does Chipotle use organic food, but it uses produce that is in season. This reduces the costs of transporting produce and ensures that the ingredients are fresh. While competitors attempt to replicate the menu, style, and flavors of Chipotle, they do not have the resources to use organic ingredients as efficiently as Chipotle does. This is one strength of

Additionally, support for local and organic farming has shown a decrease in fast food sales. Recently fast food giant, Mcdonalds, has had to close nearly 700 restaurants due to lack of sales (Wahba). The general public is speaking out more and is stating they want fewer additives and more “real” food to be convenient. According to the WORLD HEALTH ORGANIZATION “GMO’s or “Genetically Modifies Organisms” are organisms in which the genetic material has been altered in a way that does not naturally occur”. The actual effects of GMO’s in food have had extensive research done to confirm suspicions that they are hazardous to the human body and are not suitable for consumption. Chipotle was the first fast food chain to disclose any artificial ingredients

Due to the fact that Chipotle is worried about providing customers with the best possible ingredients and in the same time, concerned of taking care about environment, animals as well as farmers, which in this case, are the main suppliers, we can encapsulate Chipotle in a Sociocultural segment.

Officials are still working on confirming the specific source of the outbreak. They believe it to have been an “undisclosed ingredient,” and Chipotle has resourced the item being investigated.

If you are not aware of the recent food poisoning incident with Chipotle, then clearly you have been taking some time off from the internet. An outbreak occurred from Chipotle in which more than 40 people became ill with E. coli. Chipotle has been in hot water since this, and it makes us realize that not all food is safe. With this in mind, the idea of other dangerous foods, outside of Chipotle, should be addressed.

This company, the Frutas Y Hortalizas Organicas De Michoacan, grows organic avocadoes in Michoacan, the largest avocado-growing state in Mexico. The owners (The Tungui family) run the day-to-day logistics of the family business and are also active in a larger association of organic avocado growers. This method of organic farming was expensive and costly because the company lost 30% of its produce, but now the Frutas Y Hortalizas Organicas produces a higher quality and better tasting crop that is grown without any chemicals.

It is a bit strange that Chipotle, a restaurant chain that has done the most work to align itself

Hispanic Americans have a strong tie to their culture and display it in their cuisine. Rice and beans are staples to la familia, together they provide a complete protein, and are inexpensive. Spicy peppers and hot sauce provide antibacterial and digestive health qualities that were imperative to provide healthy meals in Mexico because the water supply isn’t guaranteed to be safe for drinking. Historically, many tomato products were introduced to the United States by Mexico, including burritos, tacos, other Mexican cuisine and even ketchup (Sowell, 1981).

Chipotle is determined to obtain only the finest ingredients and naturally raised meats from local farms. Also, Chipotle watches the news, industry issues, weather, exchange rates, foreign demand, crises and other world events that could possible affect their prices.

Most advertisements are designed to sell a good or a service. The Scarecrow, a rather artistic advertisement from Chipotle Mexican Grill, has a similar aspiration. This advertisement, however, wants to sell the idea of Chipotle. The scarecrow’s path from supporting the devious industrial food corporation can be paralleled to the evolution of Chipotle’s business model. The United States is filled with industrial fast food restaurants that operate similarly to the Crow Foods Incorporated in the advertisement; they used mass produced animals that are exploited for their products. A well-known member of this system is McDonalds, who at one point owned Chipotle (Mathews). The idea behind Chipotle is practically the opposite of McDonalds: it

Chipotle is facing numerous challenges due to the fact that E. coli outbreak which requires the corporation from the key stakeholders to keep it under control and apply the new food safety protocols which can aid to bring the regular customers back. Although the main cause remains a mystery, Chipotle’s E. coli outbreak has been authoritatively declared officially over by the experts. However, since the poisoning outbreak, the impact of the reduced number of customers affects the profit which the company used to enjoy before such eventuality (Scholes 27).

Currently, Chipotle serves 100 percent naturally raised pork and over 80 percent naturally raised chicken and beef. Chipotle is also looking into using more sustainably grown produce and locally sourced produce when in season.

Changes in customer preferences, general economic conditions, discretionary spending priorities, demographic trends, traffic patterns and the type, number and location of competing restaurants have a moderate effect on the restaurant industry (Chipotle, 2010). One example of customer preferences being a driver in the industry is the “Whole Food-ism Movement” which has put a large focus on organic, antibiotic-free, and non-processed foods (Mansolillo, 2007). Consumers now look for healthier options when eating and an overall healthier lifestyle. Chipotle has been able to benefit from this movement by carrying on their “Food with Integrity” mission (Chipotle, 2010).

One can only assume that Chipotle uses concentration strategies for their corporate level strategies, because they only concentrate on the restaurant industry. Market penetration and market development is their main focus, as they are attracting new customers as they increase brand awareness through their business strategies and their “Food With Integrity” campaign, Farmed and Dangerous live action story-telling comedy series, and Cultivate Foundation, which is a non-profit organization supporting sustainable agriculture, family farming and food education, and they are expanding into new markets with international expansion, so Chipotle can continue “to change the way people think about and eat fast food” (Chipotle, 2015). Chipotle also, uses ‘product development’, but not as aggressively as market penetration. The most recent product development is a meat alternative made from tofu, called “Sofritas”. Chipotle is highly invested in Pizzeria Locale, suggesting the possibility of horizontal integration in the near future, and is using an adjacent strategy with its sister restaurant ShopHouse Southeast Asian

This business believes in “Food with Integrity”, meaning “whenever possible Chipotle uses meat from animals raised without the use of antibiotics or added hormones. They use organic and local produce when possible. Also, Chipotle supports and sustains family farmers who respect the land and the animals in their care.”