While Chipotle is not our client, it is clear that they are in good hands.  Chipotle (aka “Chipotbae” by super fans) started 30 years ago as a basic burrito restaurant near the University of Denver in 1993.  As of August 16, 2023 there are 3,236 Chipotle restaurants in the United States.  Their core audience is college students and younger millennial professionals aged 18 – 30.  This audience doesn’t just like Chipotle, they adore the brand and are massively loyal to it.

On February 7, 2024, Chain Store Age had a feature article about Chipotle with this headline, “Chipotle delivers strong Q4; to open 285 to 315 new locations in 2024.”

Chipotle Mexican Grill smashed fourth-quarter earnings and sales expectations amid traffic gains that bucked recent industry trends.

We believe Chipotle’s success is a result of delivering on 5 essentials of all strong brands.

1). STRONG SENSE OF PURPOSE. They are a brand that had a driving philosophy from the outset: food with integrity. The philosophy is embedded in their core belief that food can change the world. They have not wavered from their food philosophy or core belief in over 3 decades.

2). GREAT PRODUCT.  In the restaurant business the product isn’t just food. It’s also service, atmosphere, packaging, ordering, etc.—the entire experience whether it’s dine-in, drive-thru, catering, to-go, or 3rd party delivery.

• Real Food. “Being real means… we only use 53 ingredients that you can pronounce.” Chipotle has led the industry in sustainability practices including working with suppliers with rigorous animal welfare practices, and supporting organic, transitional and local growers and farmers. Guests appreciate the fresh and healthy ingredients and that they can customize any of the menu items to their liking.

The only place i know of that uses really fresh ingredients and the meats aren’t filled with antibiotics, growth hormones and the like. really excellent food!!!  – Cathy L. Bradenton, FL (on Yelp)

• Service. The company is constantly evaluating and improving service. Recent improvements include:
  • Staffing the front line with 4 crew members instead of 3
  • Adding order ahead “Chipotlanes” (guests place their order through the Chipotle mobile app or via website, then pick it up in the Chipotlane drive-thru, all without ever having to leave their car) to their stores
  • Using data to personalize add-on suggestions and more

Chipotle’s incidence of sides has grown steadily in recent quarters, partly thanks to this feature and other digital efforts, like rewards communication. “Historically, you get a Mexican Coke with your order,” Niccol said, offering an example. “When you get to check out it, if you don’t have Mexican Coke in your basket, we will serve you a suggestive sell of, ‘hey, you forgot your Mexican Coke.’ Versus before, we might have just been saying, ‘hey, maybe you should think about chips and queso.’ – QSR Magazine

• Store Design/Atmosphere. In April, 2023 Chipotle piloted a new responsible restaurant design utilizing 100% renewable energy to reduce GHG emissions. The new design also features cactus leather chairs, artwork made from recycled rice husks, and EV charging stations.

3). SOLID OPERATIONS. The stores are 100% company owned. This is a benefit for operations– providing more control and consistency, speed to innovation and maintaining high standards.  Their recent operations emphasis on throughput (speed of service) has bolster the company’s confidence in reaching $4M AUV (average unit volume) in coming years.

Part of strong operations is staff. In January of this year (2024) the company announced new benefits to attract and support its growing GenZ workforce, with an emphasis on financial and mental health. With moves like this, it is easy to understand how they’ve been able to lower restaurant crew turnover from nearly 200% to low 100% range.

4). BRAND PROMISE. The brand promises to “Be Real.” Having a promise that you can deliver on is massively important to building trust with your audience—the foundation of any great, long-standing relationship—as it ultimately builds a bond between the brand and customer driving loyalty and sales. According to a recent study by WARC and HBR, Advertising campaigns that make a brand promise (e.g. “Be Real”) are more likely to change consumer behavior, drive a sales spike, improve brand health, and result in long-term brand and sales growth. We think it is fair to say that Chipotle’s “Be Real” promise and brand campaign contributed to their 7.9% comp store sales increase in 2023.

5). LONG-TERM COMMITMENT TO BRANDING AND PERFORMANCE MARKETING. So many brands have shifted so many resources towards performance marketing they’ve essentially crowded out brand-building activities, resulting in losing their brand narrative and ultimately suffering from declining sales. This is not the case with Chipotle, which is one of the reasons we admire them so much. They understand the value of brand building, from priming the funnel for future sales to fortifying competitive moat and driving pricing power. They’ve also consistently invested in brand building and performance marketing (to drive short term sales spikes) for 30 years. Even in 2015 – 2016 when they encountered food safety problems, which had a huge impact on sales in 2016 (see chart below), they continued to build out new stores and invest in brand marketing.

You can see their “For Real” brand-building messaging shine through at every guest touchpoint, as well as in their latest commercial execution:

On the performance side, they introduced “Freepotle” drops (up to 10 free food items over 12 months) for reward members and use limited time offers like the Chicken Al Pastor promotion to drive more immediate sales.

If you are a restaurant brand and need a strategic brand and marketing partner that believes in the power of brand and performance, please reach out.  We have experience building a wide range of concepts from Red Lobster, Logan’s Roadhouse and Uncle Julio’s to Piesanos, Gator’s Dockside, Fortina and Sally’s.