Chipotle Roars Back from Food Crisis with Hard-Hitting Strategy
It wasn’t that long ago in restaurant time that Chipotle suffered a major food safety crisis, but since then the brand has overhauled its marketing strategy to drive profitable volume growth and double its stock price.
The Mexican grill, with more than 2,500 company owned restaurants, offers a menu filled with wholesome food with no artificial flavors, colors or preservatives. The restaurants have no freezers, microwaves or can openers.
“We use more local produce than any other restaurant group and always responsibly source real food prepared with classic cooking techniques that we’ve made fresh every single day,” Chipotle CMO Chris Brandt said. “If you’re going to have food this good you want to show it to people.”
That thought planted the seed for a new marketing playbook that would transform the way consumers understand and engage with the brand.
One major change took place last year when Chipotle moved its headquarters to California, closing its New York and Denver offices. That offered a chance to reset its marketing department with a new team.
“I wanted agile and innovative marketers who looked at this changing world as an opportunity, not as a problem,” he said. “I really wanted people who generate ideas because ideas differentiate you. Ideas separate you. Ideas enable you to win.”
Brandt personally interviewed every person on his team to ensure they have the right chemistry and that everybody passes what he calls the “Friday afternoon” conference room test.
“In the unfortunate event that you have to go in a conference room on a Friday afternoon at four o’clock, are you happy to see a person there or are you sad? And I will tell you if you’re sad to see that person there you should not hire them, no matter what their qualifications are,” he said earlier this month at ANA Masters of Marketing Week.
Chipotle also fully embraced digital growth to engage Gen Z and Millennials.
“It’s clearly where the action is and one of the biggest things consumers want when we surveyed them was more access to the brand,” he said.
Brandt doubled down on the digital budget with delivery capability through DoorDash in Chipotle’s app and pick up shelves in every restaurant so customers didn’t have to wait in line to pick up their orders.
“Our operating model is so efficient that we can make the food really, really fast, getting order to delivery times of less than 30 minutes—which is incredible,” he said. “It’s a giant growth area for Chipotle.”
A new tone
“In the years since the crisis, the message for the brand was really heavily focused on what others don’t do as opposed to celebrating what Chipotle actually does. I wanted to have a much more positive tone. I wanted to have a lot more fun with the brand and I wanted to really engage with our consumers and we wanted to be more insightful and relevant in culture,” Brandt said.
That new positive tone included the new tag line, “For Real,” which debuted last fall.
“We needed a rallying cry for the brand with our customers, but also with our employees. We’ve got 75,000 employees out there, so we had to make them proud to wear that badge on their uniform,” he said. “And we wanted a tagline that few brands would dare say and fewer still could back up. The beauty of ‘For Real’ is that tagline is new, but it really harkens back to the principles the brand was founded on 26 years ago. We were off to a good start. But the job certainly wasn’t done,” he said.
With the campaign, Chipotle worked to change consumer perceptions and retell the “real” story in new and different ways and to show up in places where consumers didn’t expect brands like Chipotle to appear.
On the job training
In his third week on the job, Brandt, who joined as CMO in April 2018, went to work in one of the restaurants.
“I showed up at the restaurant at 7 a.m. and I was blown away because what I saw in the restaurant was whole heads of romaine lettuce, crates of whole peppers, bags of onions—whole ingredients. Then I saw the employees get to work cutting and chopping and cooking in that restaurant to make everything fresh for that day and I thought man, if we could show this to everybody they will love it,” he said.
He immediately called Chipotle’s agency Venables Bell & Partners in San Francisco and scheduled a team to experience what he just had.
The results were the global campaign launched in February, “Behind the Foil,” the most intimate look into the company’s operations in its history. The documentary-style digital and TV spots, shot by documentarian Errol Morris, aimed to “pull back the foil” by featuring behind-the-scenes footage of Chipotle restaurants, including its kitchens, equipment and prep routines, and featuring Chipotle employees and the farming partners that grow the brand’s real ingredients. This spot is titled “The Guac Smasher.”
Supporting the campaign was a push to remind consumers that Chipotle uses only 51 ingredients, “all of which you can pronounce.” A massive billboard in New York City kicked off that part of the campaign and then the brand showed up at a very unexpected place—a spelling bee.
“Nobody expects Chipotle to show up at the National Spelling Bee, but we had this insight that the only thing that’s hard to spell at Chipotle is Chipotle, but that’s not necessarily the case with our competitor ingredients,” Brandt said.
Merging with current cultural moments helped Chipotle move forward. The brand had no involvement in February’s Super Bowl until Maroon 5’s Adam Levine took his shirt off during the half time show. A consumer posted on social that Levine without a shirt looked like one of Chipotle’s signature paper bags.
“So we poured on the gas adding 170 million views,” he said. “We kind of won the Super Bowl without even participating.”
In March, Chipolte launched a new loyalty program, Chipotle Rewards, reaching out to Venmo for a contest that used Venmo payouts to give away up to a quarter of a million dollars, to 25,000 Chipotle fans per day. Then in June, the NBA finals got underway. Chipotle, with no rights to the game, tweeted out that the first 500 people to use a special code could win a free burrito every time the announcer said the word “free” as in a free throw.
“We got a billion impressions on this thing and a bunch of Twitter followers,” Brandt said.
Another major piece to its comeback was menu innovation. In January, a collection of Lifestyle Bowls were introduced like Paleo Salad Bowl and Keto Salad Bowl available only for digital customers. The bowls were so successful that Chipotle followed up with “influencer bowls.” For example, the brand got in early with a Fortnite team and debuted a bowl after one of its streamers “because I felt like Fortnite single handedly lowered the GPAs of the entire nation,” he said.
And there were other bowls and burritos tied to David Dilbert and World Cup soccer champs Julie Ertz, Lindsey Horan and Rose Lavelle.
“We got real results,” he said.
As all components of the turnaround began to gel, Chipotle’s work was paying off.
“The category of restaurants in general runs about plus two or three on comp sales and traffic is flat to negative. It’s a tough business,” he said. “In Q4 we launched the ‘For Real’ campaign and saw comp sales up plus six and traffic up plus two and that was the first time Chipotle saw traffic up in two years for a quarter. Then in Q1 we were plus 10 and plus six. Q2 we were plus 10 and plus 7. The beauty of this growth is that it’s profitable volume growth because it’s really driven our earnings per share and that earnings per share has driven our stock price to more than double over the last year or so.”
According to The Motley Fool, Chipotle has more than tripled its share price since bottoming in early 2018.
“The numbers are amazing,” Brandt said.