The fast-casual restaurant industry was the pioneered by Steven Ellis, the CEO of Chipotle Mexican Grill. Now considered the leader in the fast casual industry, Chipotle Mexican Grill (CMG), first opened their doors in the spring of 1993 in heart of Denver, Colorado. Immediately Chipotle’s was a hit with the younger college crowd, and through word of mouth, CMG quickly became a staple for many residents near the college where the first restaurant opened. Since then, Chipotle has opened up 1230 stores in 46 states, including stores in Canada and recently London. Chipotle was built around the idea of simplicity, keep the menu simple and serve high quality, farm fresh, free range ingredients. “Food with Integrity” has been the corporate credo ever since.
While continuing to grow its US presence, Chipotle should focus on enhancing its menu offerings, expanding slowly, to ensure it doesn’t stray from its already successful formula. Chipotle should also highlight and continue to promote its “Food with Integrity” campaign by advertising more heavily and focusing on the saving the family farm as a major differentiating factor between themselves and their competitors.
In 1993, Steve Ellis founded Chipotle Mexican Grill in a former Dolly Madison Ice Store in Denver, Colorado. A former student of the Culinary Institute of America in Hyde Park, New York; Steve Ellis became a line cook for large restaurant in San Francisco, California. Taking what he learned, Ellis decided to open a restaurant near the University of Denver campus using a loan from his father of $85,000 dollars. He calculated that in order to turn a profit he would have to sell 107 burritos a day! After one month in business the little restaurant named “Chipotle” (the Mexican Spanish name for a smoked, dried jalapeno chili) was selling over 1,000 a day.
With the money made from the first Chipotle Mexican Grill, Ellis had planned to open a fine-dining restaurant; however following the success of his first restaurant, he decided to re-focus on the growth on Chipotle instead. Five years after he opened his first restaurant, a minority investment was made in the company by McDonald’s. In 2001, McDonald’s had become Chipotle’s largest investor enabling the fledgling restaurant to expand from just 16 locations in 1998 to over 500 by 2005. By 2006, McDonald’s had fully divested itself of Chipotle, a restructuring move that allowed McDonald’s shed its other investments such as Boston Market and focus on its main restaurant chain. In a list of fastest-growing companies in 2009, Chipotle was ranked eighth, based on increases in U.S. sales over the past year. As of 2011, Chipotle had opened over 1100 restaurants throughout the United States and Canada. Chipotle is considered the pioneer of the Fast-Casual restaurant market. It is a highly socially aware corporation that believes strongly in using fresh locally grown ingredients, promoting naturally and organically grown foods, and repurposing (recycling) the majority of its corporate materials for new and exciting products/uses.
The Internal Environment
Marketing goals and objectives
Chipotle’s main marketing strategy is to maintain its leadership in the “fast-casual” restaurant marketing segment. Chipotle holds the largest share of this segment and wants to continue to expand their stronghold on the competition. Chipotle currently has over 1,400 locations and plans to open an additional 10% of locations in the United States. Chipotle also targets prospects that want to experience, and expect, food quality that is in line with that of full service restaurants, and is also easily obtainable and convenient. The marketing idea and objective is to provide quality food, with quality ingredients, at the speed of normal “fast-food” restaurant chains. Chipotle’s marketing segment is known as “fast-casual”, and implies that customers want to have a...
References: Bank of America Merrill Lynch Consumer & Retail Conference. (n.d.). Chipotle Investor Relations - Investor Relations Home. Retrieved April 1, 2012, from http://ir.chipotle.com/phoenix.zhtml?c=194775&p=irol-presentations
Chipotle: Food with Integrity
Chipotle Investor Relations - Annual Reports. (n.d.). Chipotle Investor Relations - Investor Relations Home. Retrieved April 1, 2012, from http://ir.chipotle.com/phoenix.zhtml?c=194775&p=irol-reportsAnnual
Chipotle Investor Relations - Press Release
Larson, L., Jevsevar, M., & Seidman, S. (n.d.). Cambrian Consulting Strategic Report Chipotle. Cambrian Consulting. Retrieved April 1, 2012, from http://www.cambrianconsulting.com/
/uploads/. (n.d.). chipotle_profile.pdf. Retrieved April 2, 2012, from www.sabrepointinc.com
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