Chipotle Mexican Grill
|Traded as||NYSE: CMG
S&P 500 Component
|Founded||July 13, 1993|
|Headquarters||Denver, Colorado, U.S.|
|Number of locations||1,600 (2013)|
|Area served||United States, Canada, United Kingdom, Germany, and France|
|Key people||Steve Ells (Chairman and Co-CEO)|
|Operating income||US$455.865 million (2012)|
|Net income||US$327.4 million (2013)|
|Total equity||US$1.245 billion (2012)|
|Divisions||ShopHouse Southeast Asian Kitchen|
|Subsidiaries||ANGR Holdings, LLC|
Chipotle Mexican Grill, Inc. (//) is a chain of restaurants in the United States, United Kingdom, Canada, Germany, and France, specializing in burritos and tacos. Its name derives from chipotle, the Mexican Spanish name for a smoked and dried jalapeño chili pepper.
The company has released a mission statement called Food with Integrity, which highlights its efforts in using organic ingredients, and serves more naturally raised meat than any other restaurant chain. Chipotle is one of the first chains of fast casual dining establishments.
Founded by Steve Ells in 1993, Chipotle had 16 restaurants (all in Colorado) when McDonald's Corporation became a major investor in 1998. By the time McDonald's fully divested itself from Chipotle in 2006, the chain had grown to over 500 locations.
Founder Steve Ells, attended the Culinary Institute of America in Hyde Park, New York. Afterward, he became a line cook for Jeremiah Tower at Stars in San Francisco. There, Ells observed the popularity of the taquerías and San Francisco burritos in the Mission District. In 1993, Ells took what he learned in San Francisco and opened the first Chipotle ( ) in Denver, Colorado, in a former Dolly Madison Ice Cream Store near the University of Denver campus using an $85,000 loan from his father. Ells and his father calculated that the store would need to sell 107 burritos per day to be profitable. After one month, the original restaurant was selling over 1,000 burritos a day. The second store opened in 1995 using Chipotle's cash flow, and the third was opened using an SBA loan. To fund more growth, Ells' father invested $1.5 million. Afterwards, Ells created a board of directors and business plan, raising an additional $1.8 million for the company. In 1998, the first restaurant outside of Colorado opened in Kansas City, Missouri. Ells had originally planned to use funds from the first Chipotle to open a fine-dining restaurant, but instead focused on Chipotle Mexican Grill when the restaurants saw success.
In 1998, McDonald's made an initial minority investment in the company. By 2001, the company had grown to be Chipotle's largest investor. The investment from McDonald's allowed the firm to quickly expand, from 16 restaurants in 1998 to over 500 by 2005. On January 26, 2006, Chipotle made its initial public offering (IPO) after increasing the share price twice due to high pre-IPO demand. In its first day as a public company, the stock rose exactly 100%, resulting in the best U.S.-based IPO in six years, and the second-best IPO for a restaurant after Boston Market. The money from the offering was then used to fund new store growth.
In October 2006, McDonald's fully divested from Chipotle. This was part of a larger initiative for McDonald's to divest all of its non-core business restaurants – Chipotle, Donato's Pizza, and Boston Market – so that it could squarely focus on the main McDonald's chain. McDonald's invested approximately $360 million into Chipotle, and took out $1.5 billion. The company currently trades on the New York Stock Exchange.
Competitors in the fast-casual Mexican market include Qdoba Mexican Grill, Moe's Southwest Grill, Rubio's Fresh Mexican Grill, Panchero's Mexican Grill, Freebirds World Burrito, and Baja Fresh. In a list of fastest-growing restaurant chains in 2009, Chipotle was ranked eighth, based on increases in U.S. sales over the past year, and in 2010 Chipotle was ranked third. Consumer Reports ranked Chipotle as the best Mexican fast-food chain in 2011. The company serves approximately 750,000 customers per day.
In December 2010, Chipotle hired chef Nate Appleman to develop new cuisine. Appleman has won Rising Star Chef from the James Beard Foundation, was named "Best New Chef" by Food & Wine magazine, and competed on The Next Iron Chef.
In 2010, U.S. Immigration and Customs Enforcement (ICE) audited Chipotle's Minneapolis restaurants, and found that some employees had been hired using fraudulent documents. In December, Chipotle fired 450 employees from its Minneapolis restaurants as a result of the audit, resulting in protests by local groups. In February 2011, ICE expanded the audit to include 60 restaurants in Virginia and Washington, D.C, which resulted in 40 workers being fired. In April 2011, the criminal division of the Attorney General's office in Washington D.C. joined the case, and ICE agents began interviewing employees at 20-25 restaurants in other locations such as Los Angeles, CA and Atlanta, GA. In response to the government investigations, Chipotle hired former director of ICE Julie Myers Wood and high-profile attorneys Robert Luskin and Greg Craig. In addition, a Mexican citizen is suing Chipotle for "mental anguish and suffering", claiming racial and national discrimination because a Minnesota restaurant allegedly refused to acknowledge his Mexican passport as a valid identification for an alcohol purchase.
In 2011, Steve Ells was a judge for the TV show America's Next Great Restaurant and investor of ANGR Holdings, the company that will be running the winning concept's restaurants. Chipotle has agreed to purchase Ells' investment in ANGR at his cost, provide support for ANGR operations, and invest a total of $2.3 million in cash contributions.
On December 18, 2013, the company revealed that it had opened its first fast-food pizza chain in Denver back in May 2013. According to The Associated Press, Chipotle partnered with a local full-service restaurant called Pizzeria Locale to create a fast-food version of the eatery, keeping its name. The company plans to open at least two more pizzerias in the Denver area.
In April 2014, Chipotle announced an increase in menu prices for the first time in nearly three years, due to increasing costs for steak, avocados, and cheese. The price increase is expected to be rolled out from the end of second quarter of 2014 until the end of the third quarter.
Operation and distribution
All of Chipotle's restaurants are company-owned, rather than franchised. As of December 2012[update], 1430 restaurants have since opened throughout the United States and Canada, with locations in 43 states, Ontario, British Columbia, and the District of Columbia. Chipotle has expanded to Europe, with the first European restaurant opened in May 2010 in London, and a location opened in Paris in May 2012. Founder Steve Ells serves as chairman and co-chief executive officer, and has a 1.25% stake in the company.
In September 2011, Chipotle opened an Asian fast-casual concept restaurant named ShopHouse Southeast Asian Grill in Washington, D.C. The company has said the new restaurant "would follow the Chipotle service format and its focus on 'food with integrity' in ingredients." Chipotle will start with only one store, and see how the restaurant works out. ShopHouse Southeast Asian Kitchen features "cuisine inspired by Thai, Malaysian and Vietnamese cuisines" served in bowls or as banh mi sandwiches.
Chipotle’s team includes a residing corporate office of managers and its board of directors. Members of both teams are appointed to serve on committees: audit, compensation, and nominating and corporate governance. The top management team consists of the co-Chief Executive Officers, the Chief Financial Officer, the Chief Development Officer, and the Chief Marketing Officer. Seven individuals currently sit on the board of directors: Steve Ells, Montgomery Moran, Patrick Flynn, Albert Baldocchi, Neil Flanzraich, Darlene Friedman, and John Charlesworth.
The field team are the employees who work closely with but not directly within specific restaurants. The field support system includes apprentice team leaders (step up from restauranteurs), team leaders or area managers, team directors and regional directors (not atypical for them to oversee more than fifty locations). Because Chipotle does not franchise, all restaurants are corporately owned. Thus, whenever Chipotle is in the process of launching a new location, the field team hires a new general manager and trains them at a current location so that they will be ready for the new location when it opens for business. The corporate office takes care of finding and funding new locations as well.
Chipotle's menu consists of five items: burritos, fajita burritos, burrito bowls, tacos, quesadillas and salads. According to an urban legend, Chipotle has a secret menu item not listed on their menus, the Quesarito, supposedly a burrito including melted cheese, like a quesadilla. The price of each item is based on the choice of chicken, pork carnitas, barbacoa, steak, or vegetarian (with guacamole). A tofu-based "sofritas" is being test-marketed. Additional optional toppings include rice, beans, four types of salsa, sour cream, cheese, or lettuce. When asked about expanding the menu, Steve Ells said, "[I]t's important to keep the menu focused, because if you just do a few things, you can ensure that you do them better than anybody else." The majority of food is prepared in each restaurant, with some exceptions being the beans and carnitas, which are prepared at a central kitchen in Chicago, Illinois. None of the restaurants have freezers, microwave ovens, or can openers. Most restaurants sell beer and margaritas in addition to soft drinks and fruit drinks. Chipotle was in the process of testing a children's menu, and experimenting with breakfast foods at Washington Dulles International Airport." Select restaurants are also offering a pozole soup.
Chipotle accepts fax orders, and in 2005 the company added the ability to order online from their website. For both online and fax orders, customers proceed to the front of the line to pay for pre-ordered food. In 2009, Chipotle released an app for the iPhone that allows users to find nearby Chipotle locations, place an order, and prepay with a credit card. In 2013, Chipotle released an Android app that allows users to locate nearby Chipotle locations, place an order, prepay with a credit or gift card, access favorites and recent orders.
In 2003, a Center for Science in the Public Interest report stated that Chipotle's burritos contain over 1,000 calories, which is nearly equivalent to two meals' worth of food. MSNBC Health.com placed the burritos on their list of the "20 Worst Foods in America" because of their high caloric content and high sodium. When a burrito with carnitas, rice, vegetables, cheese, guacamole, and salsa was compared with a typical Big Mac, the burrito had more fat, cholesterol, carbohydrates, and sodium than the Big Mac, but it also had more protein and fiber. The restaurant has also received praise – Health.com included the restaurant in its list of the "Healthiest Fast Food Restaurants".
Chipotle's vegetarian options include rice, black beans, fajita vegetables (onions and bell peppers), salsa, guacamole and cheese. All items other than the meats, cheese, sour cream, and honey vinaigrette dressing are vegan. As of late 2013, Chipotle developed a new cooking strategy for the pinto beans, eliminating the bacon and making them vegetarian and vegan-friendly. The cheese is processed with vegetable-based rennet in order to be suitable for vegetarians. In April 2010, Chipotle began testing a vegan "Garden Blend" option, which is a plant-based meat alternative marinated in chipotle adobo, at six locations in the U.S. The flour tortillas used for the burritos and soft tacos are the only items that contain gluten.
In 1999, while looking for ways to improve the taste of the carnitas, Steve Ells was prompted by an article written by Edward Behr to visit Concentrated Animal Feeding Operations (CAFOs). Ells found the CAFOs "horrific", and began sourcing from open-range pork suppliers. This caused an increase in the price, and also the sales of the carnitas burritos.
In 2001, Chipotle released a mission statement called Food With Integrity, which highlighted Chipotle's efforts to increase their use of naturally raised meat, organic produce, and dairy without added hormones. Almost all of the meat served in Chipotle restaurants is naturally raised, defined by the company as "coming from animals that are never given antibiotics or added hormones and that are raised responsibly—that is, in accordance with our animal welfare standards." While Chipotle targets using only naturally raised chicken, beef, and pork in its restaurants, supply chain issues occasionally cause restaurants to switch to conventionally raised meat. Chipotle only uses the leg and thigh meat from its chickens; the breast meat is sold to Panera Bread. Approximately 40% of the beans are organically grown, and in 2011 approximately 5% of the beans will come from conservation tilling methods. In 2009, Chipotle planned to serve over 60 million pounds (27 million kilograms) of naturally raised meat, more than any other restaurant company, and planned to use 75 million pounds in 2010. The company pledges to use more local produce when possible, using "35 percent of at least one of its produce items for every restaurant sourced from small and midsize local farms throughout the growing season" in 2009, and increasing to 50% in 2010. Chipotle advertises its support of family farms, such as Niman Ranch, a California "natural" meat producer that contracts with farms in the Midwest to raise pork and other livestock. All of the cheese and sour cream comes from cows that do not receive recombinant bovine growth hormone (rBGH), and 30% of the dairy comes from open pasture cows. Founder Steve Ells has testified before Congress in support of the Preservation of Antibiotics for Medical Treatment Act, which aims to reduce the amount of antibiotics given to farm animals.
Since 2006, the Coalition of Immokalee Workers (CIW), a Floridian farmworker organization, has protested Chipotle’s refusal to sign a Fair Food agreement, which would commit the restaurant chain to pay a penny-per-pound premium on its Florida tomatoes to boost tomato harvesters’ wages, and to only buy Florida tomatoes from growers who comply with the Fair Food Code of Conduct. In 2009, the creators of the documentary film Food, Inc. (along with 31 other leaders in the sustainable food movement) signed an open letter of support for the CIW’s campaign, stating that, “If Chipotle is sincere in its wishes to reform its supply chain, the time has come to work with the Coalition of Immokalee Workers as a true partner in the protection of farmworkers rights.” In September 2009, Chipotle announced that it would sidestep partnership with the CIW and instead work directly with East Coast Growers and Packers to increase wages for its tomato pickers. CEO Steve Ells has framed the dispute as a fundamental issue of control, stating that, “the CIW wants us to sign a contract that would let them control Chipotle's decisions regarding food in the future." In October 2012, Chipotle Mexican Grill signed an agreement with the CIW and became the 11th company to join the organization's Fair Food Program.
Advertising and publicity
In the past, Chipotle mainly relied on billboards, radio ads, and word-of-mouth to advertise. In 2012, Chipotle aired its first nationally televised commercial during the 54th Grammy Awards ceremony. In 2010, the company initiated an ad campaign that mocks advice given to Chipotle by advertising agencies. Chipotle has run many promotions giving out free food to potential customers, especially when opening a new store. Stores also give out free burritos on certain holidays; for instance, on Halloween, some locations have had promotions in which free burritos are given to people who come dressed as a burrito. Chipotle gave away free burritos to reporters during the 1997 trial of Timothy McVeigh, which took place in Chipotle's hometown of Denver. In addition, stores offered free burritos to those displaced by Hurricane Katrina. Chipotle received attention when Ozzy Osbourne's reality show The Osbournes featured the company's burritos heavily. Chipotle was also mentioned throughout the "Dead Celebrities" episode of the television series South Park. For Halloween 2010, Chipotle announced that customers dressed as a processed food product would receive a burrito for $2. The event was part of a $1 million fundraiser for Jamie Oliver's Food Revolution called "Boorito 2010: The Horrors of Processed Food."  For "Boorito 2011", customers dressed in costumes "inspired by family farms" will receive a menu item for $2, with proceeds from the promotion going to The Chipotle Cultivate Foundation and Farm Aid. The promotion is aimed to increase awareness of family farms. Also in support of family farms, Chipotle released music videos of Karen O of the Yeah Yeah Yeahs and Willie Nelson. On September 12, 2013, Chipotle released an animated short called The Scarecrow with a companion mobile video game; both feature a narrative heavily critical of industrial farming but little in the way of direct marketing for the chain. The short features a cover of "Pure Imagination," from "Willy Wonka and the Chocolate Factory," sung by Fiona Apple.
In 2011, Chipotle created the "Farm Team", which is a rewards program available only by invitation from restaurant managers. The Farm Team members have access to a special Chipotle website, where members can earn rewards, i.e. free food and T-shirts. The site offers members to, "learn where Chipotle’s food comes from, take quizzes and polls, play games and watch videos about the company." In April 2014, the Farm Team program was shut down.
Founder Steve Ells was a judge for the NBC reality television series, America's Next Great Restaurant; Chipotle offered a buy one get one free deal in conjunction with the show. The show featured an episode where contestants worked in a Chipotle restaurant for a day.
Chipotle sponsors Team Garmin-Barracuda (formerly Team Garmin-Chipotle, Team Garmin-Slipstream, Team Garmin-Transitions and Team Garmin-Cervélo) of the International Cycling Union, and is an official team partner of the Boston Celtics, and the Boston Bruins. In June 2009, Chipotle sponsored free screenings of Food, Inc., a film that criticizes the corporate food industry. Founder Steve Ells stated that he hoped the film would make customers appreciate Chipotle's Food With Integrity policy. From May until September 2009, Chipotle ran a contest on mychipotle.com, a microsite which had a competition for the best user-created audio and video presentations about different combinations of ingredients. In July 2010, Chipotle began a campaign to support healthier lunch alternatives for students, in which money will be donated to The Lunch Box program based on how many spam E-mails consumers forward to a company E-mail address. For Chipotle's 18 year anniversary, the company began wrapping its burritos in gold foil as part of a larger promotion to draw attention to its Food With Integrity mantra. Also as part of the gold foil campaign, Chipotle is offering prizes for customer-created pictures of items wrapped in gold foil. Chipotle hired comedian Amy Sedaris to create a comedic how-to video on wrapping with gold foil, and spread the video using Twitter. In March 2013, Chipotle pulled its sponsorship of a Boy Scouts of America event, citing that organization's ban on LGBT members.
On February 17, 2014, Chipotle released the first webisode of a four-part series titled Farmed and Dangerous on Hulu.com. The comedy is a satire of "Big Ag" and "Big Food" practices, featuring the fictional megacorporation Animoil feeding cows petropellets, which are made from petroleum directly rather than indirectly, from the corn and soybean that require so much petroleum products to grow (nitrogen fertilizer is made from the nitrogen present in the air and hydrogen present in natural gas from fracking.)
Architecturally, all Chipotle restaurants are built using most of the same materials (plywood, corrugated metal, stainless steel, exposed ductwork), although each store is unique. The interiors have been described as having an "industrial, sheet metal look". Chipotle has built restaurants using white ceramic tile instead of stainless steel, citing the relative ease of recycling white tile compared to steel. It costs the company approximately $850,000 to open a new restaurant. When the first Chipotle opened, Steve Ells asked his friend, sculptor Bruce Gueswel, to design the chairs and a styled Mayan king for the restaurant. Both items were made from wood and metal. Gueswel has continued to design and build the art and chairs for all subsequent Chipotle restaurants. Most Chipotle locations display a photograph of the original restaurant, which is near the University of Denver campus on Evans Avenue. Instead of a photograph of itself, the original location has a photograph of the Dolly Madison Ice Cream that previously occupied the location. In 2010, Chipotle began opening "A Model" restaurants, which are smaller concept locations, citing the lower costs of development and occupancy. Chipotle uses environmentally friendly packaging, with bowls made from recycled newsprint, unbleached tray liners, and napkins and cups made from postconsumer waste.
Chipotle's architectural design team incorporates the principles of sustainable architecture in their projects. The "green" restaurant in Gurnee, Illinois features an on-site six kilowatt wind turbine, which generates about 10% of the restaurant's electrical needs. The Gurnee restaurant has received Platinum level LEED certification from U.S. Green Building Council. A restaurant in Tulsa, Oklahoma, uses recycled drywall, low-VOC paint, and energy-efficient appliances. A Chipotle restaurant in Austin, Texas was the first to receive a four-star rating from the city's Green Building Program. Additionally, Chipotle has made arrangements to add solar panels to 75 of its restaurants. Chipotle has contracted to clean its stores in New York City, NY and Long Island, with "plant-based, environmentally preferable cleaning supplies and technologies." The cleansers are readily biodegradable and non-toxic to humans or aquatic life.
Chipotle was the defendant in a lawsuit for failure to comply with the Americans with Disabilities Act (ADA). Maurizio Antoninetti, a customer who used a wheelchair was unable to see the food preparation, denying him the "Chipotle Experience". The case against the company was upheld in the 9th U.S. Circuit Court of Appeals, and the U.S. Supreme Court declined to hear Chipotle's appeal, leaving the 9th Circuit's ruling intact. Chipotle has, "an official disability policy of bringing ingredients to the tables of diners with disabilities and doing tableside preparation." The plaintiff in the case has a history of filing ADA-related lawsuits, and has sued over 20 restaurants. Chipotle is retrofitting restaurants affected by the ruling, and incorporating the new design into new restaurants.
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|Wikimedia Commons has media related to Chipotle Mexican Grill.|
- Official website
- UK website
- Chipotle Mexican Grill at the Wayback Machine (archived January 17, 1999)