The new leaders of Chipotle Mexican Grill aim to take the company back to the future.
In the midst of a move from Denver to Newport Beach, the company turned to its roots in the Mile High City for its latest advertising campaign, “For Real.” Chipotle built its reputation on fresh, healthy ingredients since the first restaurant opened in 1993.
The “For Real” campaign is based on the premise that Chipotle dishes are made with a “very short list of 51 ingredients,” and they all have common names like chicken, cumin, lime juice, thyme, tomato paste, and avocado.
“There’s a notion for Chipotle that food that is sourced and raised responsibly just tastes better,” said Chris Brandt, chief marketing officer. “We took that to heart as our starting place.”
In a phone interview, he described how he conceived the campaign while visiting a Florida Chipotle before customers arrived.
“The restaurant at the beginning of the day looks much more like a farmers market than any other restaurant that I’ve ever seen.”
Brandt described himself as a “longtime Chipotle user” but he only joined the company in March, shortly after Brian Niccol became the company’s chief executive officer. Before Chipotle, Brandt and Niccol spent overlapping time at Irvine-based Taco Bell. Chipotle has since moved its headquarters from Denver to Newport Beach, returning both men to Orange County.
“I literally bought a house a mile from my old one and put my family back in their old life,” Brandt said.
In a recent investors conference call, Niccol said the “For Real” campaign has been successful in reaching Chipotle’s target audience, millennials and Generation Z — people born in the early 1980s and the late 1990s, respectively.
The “For Real” campaign came together rapidly, Brandt said, as did the move to Newport Beach and much else in recent months. Brandt said it is becoming “a more agile and innovative company.”
Chipotle has been known for innovation for most of its 25 years. It was widely credited with launching the “fast casual” category of restaurants, which don’t offer full service but emphasize high-quality ingredients as opposed to fast food chains, which emphasize low prices and speed.
As recently as 2015, Forbes ranked Chipotle as No. 15 in its top 25 list of disruptive brands, meaning that it changed consumer expectations. But a 2016 E. coli outbreak took some of the luster off the company. Since taking charge, Niccol has talked about building an engaging and culturally relevant brand.
To engage millennials, the company is ramping up its digital presence and pushing online ordering. In October, it launched a new rewards program in three pilot cities in the Midwest.
The push seems to be working. Digital sales grew 48.3 percent July through September compared with the same three months in 2017. Digital accounted for 11.2 percent of sales, according to Chipotle’s third quarter report.
The digital bump, however, potentially increases the amount of time walk-in diners have to wait in line for service. Suddenly the company that helped transform fast food to fast casual has a need for speed.
To address the issue, Niccol launched an initiative to have digitized secondary “make lines” in every restaurant. The system separates digital orders from walk-in orders with a computer, a printer and several monitors.
Here’s how it works at Chipotle in Irvine’s Woodbury Town Center:
- Online orders that come in show up color coded on a computer monitor. If the order shows green, it needs to be made immediately. If the order shows red, it’s an advance order that will change color when the time for preparation arrives.
- Staff members build the order to the customer’s liking. The Chipotle app lets customers choose every ingredient the way walk-in customers do by talking to employees.
- When the food is ready, a staff member prints out two labels with the customer’s name, one to be put on the lid of the tin containing the food, and one to go on a paper bag.
- The paper bag is put on a rack near the counter, to be picked up by the customer on an honor system. Since the food was paid for online, ideally the customer can just grab it and go.
The system is similar to Panera Bread’s Rapid PickUp, but a lot of other restaurant chains are getting into grab-and-go, including Dunkin’ Donuts and Starbucks.
About 750 of Chipotle’s 2,463 restaurants have digitized make lines and 350 have pickup racks, but the goal is to have both in all restaurants by the end of 2019, said Marnie Henziak, field marketing manager for 400 restaurants in California and Nevada.
Henziak said the first restaurants to get the digitized make line were picked by volume and that many are near colleges.
Other solutions are being considered, she said, such as adding drive-thrus just for the pickup of online purchases, not for ordering food.
The Woodbury location has had its digitized line for three for four months and has shortened the walk-in customer line, which can be out the door during the lunch rush, said restaurateur Javier Jara.
He said it has also served as a good recruiting tool for the Chipotle app.
“They see the screen and ask, ‘What’s that?’ The next day, they come in and order through it.”
That’s the way Niccol described growing business to investors, through “customer focused innovation.”
Chipotle is also looking at expanding its menu, and has done some testing in Orange County, including offering bacon as an add-on to its burritos and other dishes. Brandt said it was an “operational test” to see if restaurants could pull off serving it rather than to see if customers want it. On that level, he called it successful.
“A great idea that’s poorly executed or that creates a problem in the store is a bad idea,” he observed.
He said the move from Colorado to Orange County is working as well in terms of bringing talent to the company.
“I think it’s been a really good recruiting tool for us, because the level of interest that we’ve had since coming to California has been incredible.
“The talent level of people, particularly in media and the restaurant business … They are the kind of folks that look at change as an opportunity, and I think that will hold us in good stead as we go forward.”
