Food With Integrity Case Study: Chipotle

Chipotle ventured into a new territory when it was created, as it had an innovative vision for fast-casual restaurants. By using fresh and quality ingredients, Chipotle raised the bar in their segment. The service line where customers could see their order being prepared enhanced the experience of Chipotle. Consumers who were used to eating at fast-casual restaurants where the food was frozen and made out of sight were able to savor the uniqueness of Chipotle. These differences helped Chipotle become successful. However, as competitors copy the traits that make Chipotle unique, Chipotle must adapt and overcome in order to remain a profitable company.

As demonstrated in Exhibit 1 on page 143, the company’s total revenue increased from $1.085.782 million dollars to $3.214.591 million dollars in less than seven years. Beginning at the end of 2007 through the end of 2013, Chipotle’s Mexican Grill total revenues increased at a CAGR of 19.83%. The new provided catering program, the six elements of their strategy adapted to other cuisines (ShopHouse Southeast Asian Kitchen) and the growing number of new restaurants are decisive aspects in increasing revenue yearly.

The Fast food industry is extremely competitive. Although Chipotle is a step up from most fast food restaurants, it still must

Chipotle, on the other hand, “seems to have created a sustainable branding strategy that leverages its good food, humorous ads, distinctive interior design, and in-store world music” (Wikinvest.com, 2010). The company is positioned to capitalize on their organic and farm raised food, and high quality ingredients. “According to the organic Trade Association (OTA), organic food sales are growing at a 20% clip annually in the US, although such food only accounts for 3% of all food and beverage sales” (Wikinvest.com, 2010). Chipotle is also positioned to tap multiple markets: baby boomers who can afford to dine out, Hispanics, two income families who do not have time to cook, and the socially conscious consumer.

Chipotle, ever the noble ambassadors of good burrito will, have been humble and cooperative throughout the investigation. Health officials are giving the company kind words and gold stars (despite, you know, the salmonella). One spokesperson for the department of health said that “Chipotle has been extremely proactive in collaborating with investigators to quickly control the outbreak and identify its source.” Another asserted the Health Department’s confidence that it is now safe to eat at Chipotle, sharing that he had a burrito bowl there last Wednesday.

In 2001 Chipotle adopted the slogan “food with integrity” to describe its approach to sourcing and preparing ingredients (Merkel and Russell, 2017). Chipotle states: Ensuring that all of our fresh ingredients are as safe as possible is a serious effort. Not only do we need to work closely with our suppliers to ensure that the ingredients we buy are safe, but we also need to make sure that once those ingredients reach our restaurants, they are handled and prepared in the safest way possible. Chipotle’s CFO said: “We like the local program, we think it’s important, but with what’s just happened we have to make sure food safety is absolutely our highest priority. If it’s testing and safety versus taking a step backward on local, we would do that

Chipotle has opened their stores in few countries such as the UK, the US, Canada, Germany and France. It is now time for the corporation to follow the lead from other companies like Yum. Brands such as KFC and Taco Bell as well as McDonalds expand their footprint in the Asian market like Japan. For example, Chipotle operates less than 2,000 restaurants in only 5 countries, while McDonalds operates more than 35,000 restaurants in 119 countries, and Taco Bell, another Mexican restaurant, operates 6,500 restaurants in 20 countries which shows that the Chipotle could do better if it expands its business.

When the Washington Post releases the finding from “Friends of the Earth” that Kraft Foods product labeled Taco Bell Originals taco shells contain “Cry9c” known as StarLink, Taco Bell Corporation will face a public perception that Taco Bell restaurants are serving or selling tinted food products. Less than one year ago (November 1999) Taco Bell Corporation lost some public confidence due to the E-coli outbreak from tainted ground meat. Our response during the November 1999 outbreak should be duplicated to assist with the public perception related to tainted products. While the restaurant products are separate from the home products, they will be linked by our Taco Bell branding. Our use of media outlets, phone banks, and websites should be used. Our legal team will need to begin its preliminary research into the subject for reports and recommendations before the press release. Senior executives from Kraft Foods are being contacted to begin planning a united response to the upcoming press

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).

Chipotle is the leader in the fast casual market, with over 1,900 locations, $3.21 billion in annual revenue, and the ability to serve up to 300 customers an hour. It has innovated the restaurant market by providing reasonably priced scratch-made meals, containing local ingredients, all within the confines of a pleasing aesthetic environment (Chipotle Mexican Grill, Inc., 2014; Kaplan, 2011). To reach its success, the firm utilized architectural innovation by stealing components of various types of restaurants already in existence. The company appropriated its rapid meal preparation methods from fast food chains such Subway and Quiznos, adopted its provision of quality food from more upscale casual Mexican restaurants, and implemented a locally based supply chain similar to that seen at many local farm-to-table establishments. This convergence of different properties came together right as the millennial generation was coming of age and demand higher quality, natural, and locally sourced ingredients in meals that could receive quickly. The company has also attempted to utilize an incremental innovation approach by removing all CMO ingredients and testing new foods such as breakfast items, soup, and chorizo sausage (The Associated Press, 2015; Peterson,

Management is the backbone of any good company. In order for a company to successful, a strong management team is needed in order to meet goals in an effective and efficient manner. Chipotle opened its doors in 1993 when Steve Ells took a chance and began his business in San Francisco. Chipotle is a chain of Mexican restaurants that is based in Denver. Chipotle is often cited as the company that started the fast casual movement where customers can get a healthy prepared meal quicker than other traditional styled restaurant. The fast casual restaurant concept was well received and Chipotle’s popularity expanded all across the United States. Customers could not get enough of the Mexican chain and massive lines could be seen stretching outside the stores all across the country. Along with its popular food, Chipotle Mexican Style Grill is a company that contains a successful management style. Why? What sets this companies management apart from the rest? There are many factors that we could analyze to understand the success of Chipotle, yet for the purpose of this paper, we will look into the cooperate culture of the company, human resource management, their leadership style, and how Chipotle deals with and how the company manages in times of crisis.

The purpose of this new product expansion is to increase sales primarily. Increasing sales is very important for Chipotle and these new products can help raise revenues significantly. The project deliverables include the introduction of the project, and the implementation of the project both in the United States and then other

As Chipotle began to grow and expand, Steve took the initiative to learn about the way most of the food in the US is produced and processed. He was quite disturbed when he discovered that pigs were raised in confinement, produce was grown on factory farms with very little respect for the environment and dairy cows were confined and injected with hormones (Ells). This experience prompted Steve to meet with ranchers and

2. What does a SWOT analysis reveal about the attractiveness of Chipotle Mexican Grill’s situation and future prospects?

I believe one segment of the Chipotle customer population is the self-expression people. These people are the kind of customers that want to express their values of supporting the local farmers and the farmer’s mission of growing organic food and their way of supporting that movement is by patronizing this kind of restaurant.