A leader in the fast-casual space, Chipotle Mexican Grill has stirred up attention in recent years with out-of-the-box marketing of its “better ingredients” philosophy.
It began in 2011 with the short animated film “Back to the Start,” in which a farmer realizes the error of his ways as part of the Big Food industrial machine and returns to local farming. In 2013, another short, “Scarecrow,” depicted a scarecrow’s journey away from processed factory food to bring wholesome ingredients to people. This year, the chain took its message to Hulu with an original comedy series called “Farmed and Dangerous,” a satirical look at the evils of industrial agriculture.
The intent was clear: to better communicate Chipotle’s use of “responsibly raised” meats, organic and local produce grown without genetic modification. It’s a positioning that has worked extremely well for the chain, which earns the No. 4 spot among the Top 10 Growth Chains. It finished its March-ended first quarter with 1,637 units and a same-store sales increase of 13.5 percent, driven primarily by traffic.
Chipotle has seen success with the rollout of catering, and it became the first national chain to feature a tofu protein option: what has been dubbed Sofritas, an organic tofu flavored with tomatoes, chiles, cumin and other spices. First tested last year in the San Francisco Bay area, Sofritas quickly jumped to about 3 percent of sales in markets where it was available.
Keys to growth:
Targeting. Chipotle has a solid grip on its Millennial target audience with its use of non-traditional marketing with a tendency to go viral. The chain also features annual music festivals in certain cities, celebrating the movement toward naturally raised meat, locally raised and organic ingredients and the elimination of genetically modified foods.
Throughput. With traffic climbing, Chipotle has spent several years working on throughput to build sales by moving more customers through the line. At Chipotle, those efforts have focused on labor deployment, and the chain has improved throughput to record levels without damaging customer service scores. During the fourth quarter ended in January, the chain added an average of six transactions during peak lunch hours, and another five during dinner.
Employee development. Chipotle is known for its “restaurateur culture,” a system of hiring, recruiting and providing career growth that identifies internal talent and builds those “top performers” into a network of elite managers. “Every crew member comes in and knows that he or she has this opportunity,” said Ells. “In fact, we want them to become the future leaders of the company.”
Diversification. In addition to the namesake brand, Chipotle is applying its model to Asian cuisine with the growing ShopHouse Southeast Asian Kitchen brand, and last year invested in a fast-casual pizza concept called Pizzeria Locale, offering more opportunities for growth.