Integrity Served with a Side of Chips

One of the hazards of being in or associated with retail is that you can never really take a complete holiday. Retail is everywhere you go, and there’s always something to catch your attention or imagination and flick the work switch back to “on”. So it was that while on a break in the US in January, I couldn’t help but be captivated by a “fast-casual” dining concept in California called Chipotle Mexican Grill.

The first thing that caught my eye was the queue. It wasn’t even lunchtime, but a line of people was snaking its way out the door, so obviously something good was going on here. As I made my way inside, I discovered this was a case of a retailer who had absolutely nailed the trend to “value and values” – a compelling mix of high perceived value in a business that embraces environmental and social responsibility.

In terms of “value”, Chipotle specialises in burritos, or as they say in their distinctive brand language; “not just a burrito. It’s a foil-wrapped, hand-crafted, local farm supporting, food culture changing, cylinder of deliciousness.” The food is fresh, simple, nutritious, served in generous portions, and built on a Subway-like assembly line. It’s delicious but relatively speaking it’s not cheap. A burrito will set you back around $6.50 in a country where fast food restaurants still scream daily about 99c deals.

When it comes to “values”, Chipotle’s catch cry is “food with integrity” – a “commitment to finding the very best ingredients raised with respect for the animals, the environment and the farmers”. That means a bias to organic and local produce, and meat that is hormone and antibiotic free and definitely not sourced from “factory farms”. The approach does translate into higher food costs, and is part of the steeper tab for customers. As evidenced by the queues though, consumers are definitely buying into the philosophy.
 

The interior design of a Chipotle restaurant is a step up on the average fast food joint too. The accent is on raw, stripped down materials – plywood, corrugated metal, stainless steel, and exposed ducts. It feels natural and authentic, and every store is unique.

This is no niche concept. Founded in 1993, Chipotle now has over 1,000 company-owned locations in the US, Canada and England. In 2009, it was the eighth-fastest growing company in the US. (Interestingly, McDonald’s was an investor from 1998 to 2006, turning a US$360 million investment into a US$1.5 billion payoff.)

You can see Chipotle’s influence in the rash of “taquerias” and “Mexican grills” popping up on the Australian fast-food landscape. Salsa’s Fresh Mex Grill (backed by Boost Juice’s Janine Allis), Mad Mex, Beach Burrito Company and Guzman y Gomez are four recent market entrants all vying for business. In terms of format, menus, and brand language, they all tip their sombreros to Chipotle to varying degrees.

Chipotle has successfully “premium-ised” what is essentially peasant food, and is a great example of a contemporary retailer delivering on both value and values.

Jon Bird is CEO of specialist retail marketing agency IdeaWorks (www.ideaworks.com.au). Email jon.bird@ideaworks.com.au. For more retail insights and inspiration, visit www.newretailblog.com.

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