What do blockbuster movie premieres, posh nightclubs and burritos from Chipotle have in common? Long lines.
During a typical lunch rush, the briskly moving queue at Chipotle — a national "fast casual" Mexican chain — regularly spills out of the restaurant and onto the sidewalk. Patrons come looking for fresh, "gourmet burritos," and a healthy fast-food alternative to the same old rotation of McDonald's, Burger King, KFC and back again. And whether or not they know it, they also come for a taste of Chipotle's unique, organic fast-food philosophy.
Touted by marketing slogans like "Chicken From Farms, Not Big Pharm" and "Slow Food, Fast," Chipotle has established itself as an unlikely leader of sustainable dining. In 2000, Chipotle's founder — a Culinary Institute of America graduate named Steve Ells — got turned on to the idea of serving humanely raised meat at his new restaurant after reading about the now-famous Niman Ranch. Nine years later, the Chipotle chain is the largest buyer of naturally raised meats (not to mention avocados) in the country, and sources much of that meat via partnerships with thousands of family farms.
Adding to its green profile, the company also sources sour cream and cheese that's free of recombinant bovine growth hormone, and is headed toward purchasing milk from pasture-raised cows. Thirty-five percent of the pinto and black beans in a Chipotle burrito are organic, and Ells recently stated his intention to use locally grown produce when possible. Two locations in Texas are certified "green" by the city of Austin, one storefront in Illinois is powered by wind energy, and three locations — the one in Illinois, along with stores in Minneapolis and Long Island — are on their way to becoming LEED-certified.
According to Chris Arnold, Chipotle's public relations director, nearly all of Chipotle's restaurants incorporate some element of green design, whether that means using Energy Star appliances, recycled drywall, or — now — wind power.
"Most companies ask, 'What does it cost to go green?' Arnold says. "We flip around that equation by looking at what we spend on a new building [typically around $900,000] and asking what the options are within those budget parameters."
For a fast-food joint, Chipotle's commitment to, as Ells calls it, serving customers "Food With Integrity" is impressive. Still, some food activists might question if it's doing enough. According to a May 2008 article in Newsweek:
"Chipotle uses few USDA-certified organic products and instead follows its own, sometimes less stringent, protocol. Pigs destined for a Chipotle Carnitas burrito receive no antibiotics, eat a vegetarian diet and must have access to either open pasture or deeply bedded pens. [But] Unlike organically raised animals, their feed does not have to be organic and pesticide-free. Both protocols allow pigs to spend their lives indoors in crowded conditions."
For a CEO like Ells, the bottom line is not always straightforward. The company's website proclaims Chipotle's food values will never be "finished or set aside to make room for other priorities" — presumably like higher profit margins. Still, those food values come at a premium. According to Newsweek, Chipotle's food costs account for 31 to 33 percent of its revenue — "among the highest in the 'fast casual' restaurant category." Even in flush economic times, spending more to source sustainable ingredients without passing a prohibitive percentage of that cost onto customers is a challenge. So what happens when, like now, the economy hits a rough patch? Can Chipotle sustain its vision in times of economic trouble?
According to an article on the financial website Seeking Alpha, maybe. Over the last several years, Chipotle has grown incredibly quickly, adding new locations and consistently reporting high profit growth (no less than 20 percent growth per quarter). Clearly, as the around-the-block lunchtime lines indicate, customers have been happy to dig in to Chipotle's organic fast-food model. But the weakened economy has taken a toll on some customers' willingness, or ability, to shell out an extra dollar or two for their daily dose of humanely raised meat, smothered in fresh guacamole. Meanwhile, elevating food costs have forced Chipotle to raise the price of some of its products even beyond the "organic premium."
Arnold keeps a positive outlook. He said that while Chipotle is not immune to the current economic conditions, and has had to raise some prices, it's unlikely to let it impact the quality of the food it serves. "If you start degrading the quality of what you do [as a quick fix], it becomes hard to ratchet it back up," he says. Instead, the company continually works to improve service and the overall restaurant experience, so that when it does have to raise prices, its "loyal customer base," continues to feel like they're getting a good value for their buck. Arnold believes that through Ells' vision — the vision that turned a small Mexican restaurant into a beloved national brand — customers at Chipotle will be able to have their organic burritos and pay for them, too.