Chipotle Mexican Grill, Inc. (/t??'po?tle?/) is a chain of restaurants in the United States, United Kingdom, Canada, Germany, and France, specializing in Mission burritos and tacos. Its name derives from chipotle, the Nahuatl 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.
With more than 1700 locations, Chipotle had a net income in 2013 of US$327.4 million and a staff of more than 45,000 employees as reported in a 2015 CNN Money syndicated report via WTVR.
History
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 at 39.67834°N 104.967682°W / 39.67834; -104.967682 (First Chipotle Mexican Grill location), 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. 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, the first restaurant outside of Colorado opened in Kansas City, Missouri. The company opened its first location in Minnesota by opening near the campus of the University of Minnesota in Minneapolis in March 1999.
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 and Atlanta. 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.
International expansion
According to an article in The Motley Fool, Chipotle had 17 locations outside of the United States by October 2014 with the majority in Canada and the UK and was in the process of opening more locations.
In August 2008, Chipotle opened its first location outside of the United States in Toronto. The second location in Toronto and Canada was not opened until 2010. The first Canadian location outside of Toronto area was open in Vancouver in December 2012. Except for the single location in Vancouver, all Canadian locations were within the Toronto area at the end of 2014.
Chipotle has expanded to Europe, with the first European restaurant opened in May 2010 in London. A second location open in London in September 2011. The following year, three addition location were quickly opened in the London area. After this growth spurt, the rate of further expansion in London slowed greatly with the sixth location appearing in 2013 and the seventh in June 2015. Although Chipotle blames the slow growth in the UK on the British unfamiliarity with Mexican Foods, several locally owned burrito chains had opened locations across the UK during the same time period.
A location first opened in Paris in France in May 2012 and Frankfurt in Germany in August 2013.
Expansion in France was much slower than that in the UK or Canada, with a second location in Paris opening in 2013 and a third location in 2014. At 7,000 square feet, the restaurant at La Défense is currently, as of 2015, the largest Chipotle location in the world while a typical Chipotle restaurant is usually between 2,200 and 2,500 square feet.
By February 2013, there were only 10 locations outside of the United States with five locations in Toronto, four locations in London, and one in Paris. The rate of overseas expansion was slower than expected. Many of the press reviewers thought that the food was overpriced for their area.
Operation and distribution
All of Chipotle's restaurants are company-owned, rather than franchised. As of December 2012, 1430 restaurants have since opened throughout the United States and Canada, with locations in 43 states, Ontario, British Columbia, and the District of Columbia. Founder Steve Ells serves as chairman and co-chief executive officer, and has a 1.25% stake in the company.
ShopHouse Southeast Asian Kitchen
In September 2011, Chipotle opened an Asian fast-casual concept restaurant named ShopHouse Southeast Asian Kitchen 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's plan was to start with only one store, and see how the restaurant works out before expanding the concept. ShopHouse Southeast Asian Kitchen features "cuisine inspired by Thai, Malaysian and Vietnamese cuisines" served in bowls or initially as banh mi sandwiches. The sandwiches were quickly dropped a few months later after receiving mostly negative reviews on the quality of bread that was being used and ShopHouse's inability to find a dependable supplier of decent bread.
In 2014, Motley Fool noted that Chipotle was expanding the ShopHouse concept rather slowly when compared with the expansion of Noodles & Company during the same time period. A writer for MarketWatch commented in 2015 that some of the procedures that Chipotle had developed for providing affordable quality burritos quickly "may not work with other cuisines". As of 2015, there have been, on average, three new ShopHouses opened each year, while 150 new Chipotles were opened annually during the same time period, or nearly three opens per week.
As of April 2015, there are four ShopHouse locations in D.C., three in the D.C. suburbs of Maryland, and three in Los Angeles County, California.
The ShopHouse concept was primarily developed by Chipotle's culinary manager Nate Appleman and Chipotle's director of concept development Tim Wildin. Appleman was primarily responsible for developing the menu and the procedures to produce the final product. Wildin was responsible for the look of the facilities, the location of the initial restaurants, and initial marketing.
Sell House Fast Denver Video
Corporate management
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.
Salaries
The labor-market research firm Glassdoor reported that Steve Ellis earned $29 million in 2014, versus an median of $19,000 for Chipotle's workers, making the CEO-to-worker pay ratio 1522:1 .
Field team
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.
Menu
Chipotle's menu consists of four items: burritos, bowls, tacos, and salads. The price of each item is based on the choice of chicken, pork carnitas (available only in some locations), barbacoa, steak, tofu-based "sofritas", or vegetarian (with guacamole). Additional optional toppings include rice, beans, four types of salsa, sour cream, cheese, or lettuce. When asked in 2007 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." Chipotle also offers a children's menu. Most restaurants sell beer and margaritas in addition to soft drinks and fruit drinks.
The majority of food is prepared in each restaurant. Some exceptions are 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.
The chain experimented with breakfast foods at two airports in the Washington (D.C.) metropolitan area but decided against expanding the menu in that direction. Starting in 2009, selected restaurants had offer a pozole soup, which has since been discontinued.
In June 2015, Chipotle began test marketing a pork and chicken chorizo-type sausage as a new protein option at selected locations in the Kansas City area. Some food writers have expressed their health related concerns over the protein's relatively high sodium content since a 4-ounce serving contains 293 calories and 803 milligrams of sodium while the American Heart Association's recommended daily amount is less than 1,500 milligrams of sodium. In contrast, the protein options with next highest sodium contents are Barbacoa with 530 milligrams and sofritas with 555 milligrams. An earlier version on the Mexican sausage was tested in Denver and New York City in 2011, but that test was terminated when that version of the sausage was perceived as looking too greasy.
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, and access favorites and recent orders.
Nutrition
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 and the chips are the only items that contain gluten.
In 2008, Chipotle was implicated in a norovirus outbreak in Kent, Ohio, where over 400 people became ill after eating at a Chipotle restaurant.
Another norovirus outbreak was confirmed to have occurred in August 2015 at a Simi Valley, California location in which 80 customers and 18 employees reported becoming ill. Ventura County health inspectors found various health violations during two inspections following the outbreak report. Despite those violations, the restaurant passed both inspections.
At almost the same time as the Simi Valley norovirus outbreak, Minnesota health officials confirmed a Salmonella outbreak that affected 17 Minneapolis-area Chipotle restaurants in mid-August 2015. The source of the outbreak was traced back to contaminated tomatoes that were grown in Mexico.
Food sourcing
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. Chipotle only uses the leg and thigh meat from its chickens; the breast meat is sold to Panera Bread.
Founder Steve Ells has testified before the United States 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.
In January 2015, Chipotle pulled carnitas from its menu in a third of its restaurants; company officials cited animal welfare problems at one of the suppliers, found during a regular audit, as the reason. Subsequently, a false rumor spread online claiming it was done to appease Muslims who consider pork to be unclean, leading to some protests on social media. The company still uses antibiotic free steak in its restaurants, despite during the summer of 2013 being forced to use "regular" beef for a short period of time; Roberto Ferdman of The Washington Post noted that these supply problems are at odds with Chipotle's stated mission to sell "food with integrity", a mission Ferdman says might be "untenable".
Also in 2015, Chipotle stopped using GMO corn and soy bean in their foods, claiming to be the first nationwide restaurant to cook completely GMO free.
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. It was named one of the worst advertisements of 2013 by the Wall Street Journal.
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 directly from petroleum, instead of corn and soybeans, which rely on fertilizers produced through an energy-intensive industrial process. The process uses natural gas as a source of hydrogen.
In 2014, Chipotle debuted their "Cultivate: Food, Ideas & Music Festival" in several cities across the nation. 2015 festivals are scheduled for Phoenix, Kansas City, and Minneapolis. Cultivate headlines of-the-moment bands and draws huge crowds to the free festival. In between band performances, attendees can enjoy food, drinks, activities, free samples from partners (such as Ben and Jerry's), and informational and interactive programs displaying Chipotle's responsible farming methods.
Also in 2014, Chipotle introduced the "Cultivating Thought Author Series," in which notable contemporary writers and other personalities are invited to produce short pieces of work, designed to be read in two minutes, to be printed on Chipotle packaging, such as to-go bags and cups. The program was suggested and is curated by Jonathan Safran Foer. Foer has contributed work to the program; other participating writers include Amy Tan, Paulo Coelho, Aziz Ansari, Walter Isaacson, Jeffrey Eugenides, Augusten Burroughs, Neil Gaiman, Julia Alvarez, Carlos Ruiz Zafon, and Barbara Kingsolver. Former participants include Toni Morrison, Malcolm Gladwell, Sarah Silverman, Michael Lewis, Bill Hader, Judd Apatow, George Saunders, Steven Pinker, and Sheri Fink.
Architecture
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 whose face was loosely based on that of civil rights leader Martin Luther King, Jr., a personal inspiration of Gueswel, 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, claimed he was denied the "Chipotle Experience" because he was unable to see the food preparation. 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." Chipotle is retrofitting restaurants affected by the ruling, replacing the walls in front of the food preparation area with lower ones or transparent panels. They are incorporating the new design elements into new restaurants. The case was one of over twenty ADA-related lawsuits filed by Antoninetti, who died in 2011.
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