Chipotle Essay

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.

In 2012, the restaurant industry was a $435 billion dollar industry (Tristano, 2013).This amounts to a very large market that Chipotle has the opportunity to capture. In that same year the casual Mexican restaurant market totaled a whopping $31 billion in sales (Tristano, 2013). This was a 13% increase for the casual Mexican restaurant market and only amounted to 7% of the entire restaurant market. According to Tristano’s (2013) research, Chipotle Mexican Grill was the second fastest growing fast casual restaurant of all the fast casual restaurant markets in 2012.

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

Another point that reinforces this statement is related to their employees and the way they benefit them in many different ways because from the beginning, they become part of Chipotle by a trainee program and after that if they show that their store is running in a very positive way, they will promote making possible going up the ladder. They

During his visit, Ellis learned that raising livestock without traditional farming practices produces better tasting meat. After discovering this, Ellis wanted to serve food to customers within his restaurants that are only organically produced by suppliers who conduct humane sustainable practices with their animals. The growing concern for where the company food comes from and how suppliers grow their livestock and crops caused Ellis to create the company’s philosophy “Food with Integrity” to guide future company operations. However, the company quest for having a higher quality of food comes at a higher cost in food supply. In order to offset these costs, Chipotle raised the price of some of their meat items by $1 or $2 (Pederson).. Sales continued to rise to a total of $131.6 million besides the sudden price hike because customers could taste difference in their food and loved how the company changed their recipe. In 2005, McDonalds decided to sell their stake in Chipotle and focus on their core business operations. The next year, the company became public and sold 7.88 million shares on the New York Stock Exchange (Pederson). Since ending their relationship with McDonalds, the company has been able to open over 800 stores including one Toronto, Canada during the year 2008. Expansion of new stores caused sales in 2009 to increase 14 percent to $1.52 billion and

Chipotle Mexican Grill (NYSE: CMG) is a quick-service and casual Mexican-inspired restaurant chain based out of Denver, Colorado. The company takes pride in doing a few things exceptionally well: To serve high quality and delicious food quickly with an experience that not only exceeded, but redefined the fast food experience. Chipotle focuses on sourcing the best possible ingredients, serving the tastiest food, and growing the most capable team possible.

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

Since 1993, Chipotle has made it their mission to use high quality farm produced products to serve quality “food with integrity” (). In accordance to their 2015 annual report, Chipotle had a net income of $475 million, along with revenues of about $4.5 billion (). Within twenty-three years since the company began, Chipotle now has restaurants all over the world, including “Canada, the United Kingdom, France, Germany, and over 1500 others in the United States” (). “During 2014, Chipotle even opened nearly 200 new locations bringing the 2013 total of 1500 up to 1700 total worldwide locations” ().

Part 3 Chipotle’s first store opened in 1993, and since then has grown to more than 900 stores in the United States. However, Chipotle’s experimentation in international markets has evolved slowly. In 2008, Chipotle opened its first restaurant outside of the US, in Toronto, Canada. In 2010, a second restaurant opened in Toronto and in 2012, a third in Vancouver. Chipotle has also expanded to Europe, with its first European restaurant opening in 2010 in London of the United Kingdom.

They make customers can see the whole process of cooking through using an opening kitchen and obtain client confidence. According to CMG consolidated statement of income from 2009 to 2011, annual revenue almost grows 1 million and net income increased significantly. However, from the exhibit 2 the cost of Chipotle is higher than other competitors, so Chipotle’s price almost is about twice of competitors, it also the

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,

CMO Mark Crumpacker stated, fast-food marketing typically is a game of trying to obscure the truth; The more people know about fast-food, the less interest they’d want to be a customer. Chipotle’s mission statement “Food with Integrity” reflects its focus on fresh ingredients; great food with a socially responsible message made them one of the first organic oriented fast-food restaurant

Chipotle is a Mexican, fast casual restaurant located throughout the United States and also expanding into different countries. Fast casual restaurants are defined as “…fast food restaurant that offers better-quality food and whose check size is higher than at a typical fast-food place” (Fast Casual, 2013, para 1). The restaurant prides itself on serving fresh and sustainable food that is reasonably priced. The restaurant uses ingredients from local farms and prepares the food options daily. It has been noted that no restaurant has a microwave or a refrigerator located inside, forcing the products to be made fresh each day (Chipotle Marketing Plan, 2015). Steven Ells, founder of the company as well as co-chief executive officer, opened