What comes to mind when you think of the restaurant Chipotle? Would you say Mexican food with a fast casual environment? Well there is so much more to this publicly traded company. Chipotle was founded in 1993 by Steve Ells who is a trained chef. Steve originally opened the first Chipotle restaurant with the intention of building a place where you could eat delicious food of the finest ingredients cheaply. In 2006 they became publicly traded and have steadily grown from his original in Denver, CO to 1600 worldwide. Much of the success is attributed to the expanding customer base of Chipotle. The success of Chipotle stems from upper management’s ability to expand the operations while maintaining the current experience and quality of food. Since the creation of this chain of restaurants profits have steadily increased from 12% to 24% annually. Chipotle as a company is now looking into new ventures such as the Southeast Asian inspired spinoff, ShopHouse.
“Food with Integrity” is Chipotle’s commitment to finding the very best ingredients raised with respect for the animals, the environment and the farmers. What this means is serving the very best sustainably raised food possible with an eye to great taste, great nutrition and great value. Chipotle supports and sustains family farmers who respect the land and the animals in their cave. This means that whenever possible they use meat from animals raised without the use of antibiotics or added hormones. We also source organic and local produce when practical as well as using dairy from cows raised without the use of the synthetic hormones. “Food with Integrity” is a journey that started more than a decade ago and is one that will never end. (Chipotle Mexican Grill, 2014)
The focus of Chipotle has always been on using higher-quality ingredients and cooking techniques to make great food accessible to all people at reasonable prices. However their vision has evolved. While using a variety of fresh ingredients remains the foundation of our menu, they believe that "fresh is not enough, anymore." Now Chipotle wants to know the sources for all of their ingredients, so that they can be sure they are as flavorful as possible while being mindful of the environmental and societal impact of the business. Chipotle calls this idea, “Food with Integrity”, and it guides how they run their business. (Chipotle Mexican Grill, 2014)
Business Model: Customer Value Proposition
Chipotle's customers are loyal and returning because of good, organic, hormone-free, affordable food. The menu isn't complicated, the food doesn't have too many ingredients, and they can count on everything being fresh. The company is also very sustainable and green oriented. While only a small percentage of customers may know this, it makes them prefer Chipotle over the leading competitors. Chipotle offers a value proposition of better food produced using organic ingredients. The use of the organic ingredients in producing food products has become the USP for Chipotle. Chipotle claims to serve more naturally raised meat than any other restaurant chain. Chipotle focuses on using high-quality raw ingredients, classic cooking methods and distinctive interior design in order to attract and retain customers. (Fool, 2013) As a strategy to involve people in its “Food with Integrity” concept, Chipotle has announced its plan to host cultivate festivals in San Francisco, Denver, and Chicago. The festivals are a one day event and include cooking demonstrations by celebrity chefs, live music, a special Chipotle festival menu, etc. emphasizing fresh food made with sustainable and organic ingredients. The whole idea behind these events is to educate people about how food can be raised responsibly. (Fool, 2013) Business Model: Profit Formula
Chipotle is profitable, maintaining margins near 20% even in 2008 which...
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