Burritos Feel Good Too

Since Chipotle began in 1993, the company has rapidly expanded to over
1600 stores with over 300 million dollars in annual revenue. The burrito
chain has become the favorite restaurant of the millennial/gen Y
demographic (Lutz). In 2011, during an economic recession that saw major
losses for food giants a 6.8% loss for Burger King (Forbes, Burger King), a
12% loss for Yum Brands (Yum) Chipotle grew by a whopping 23%
(Kaplan). Even after raising prices by about 6% in the past six months,
Chipotle actually gained traffic by an average of about 29%. Virtually every
description of Chipotles customers includes the words cult or cult-like
(google search results for cult of chipotle return over 3.5 million hits); and
yet, those descriptions still do not manage to fully portray the ridiculous
extremes of the Chipotle fanbase quite like this wonderful Huffington Post
article* (Jennings). Hunger? More like a (burrito) fixation. Chipotle is not
yet a McDonalds killer, but it is clearly a threat; and with such ridiculous
market power, it has become vital for industry insiders to understand how
Chipotle functions.
It is extremely unlikely that Chipotle has fared so well simply because
Americans everywhere love burritos; its astronomical success comes from
more than a good guacamole recipe. Indeed, many restaurants in the new
fast-casual market (including Panera Bread and Five Guys Burgers and
Fries) have experienced the same remarkable growth (Trefis Team). The
success of this food genre is likely predicated upon massive sociological and
gastrointestinal changes in American culture. By understanding why
Chipotle became so successful, we can reveal how American opinion has
changed over the past decades while simultaneously discovering the
impacts of having a new face of fast food.
This essay will begin with a history of Chipotles growth to contextualize
and reaffirm the importance of Chipotle within the industry. It will go on to
examine why Chipotle needed an ethical framework to be successful. The
essay spends the most time analyzing a Chipotle commercial to discover the
specific tenets of the ethical framework Chipotle adopted. It will then
attempt to reverse engineer the changes in American food culture from
Chipotles ethical development. Finally, the essay will explain the impacts of
everything that has been previously discussed, and will expand on the ideas
presented for future real world application.
http://www.businessinsider.com/chipotle-poses-a-surprising-threat-toabercrombie-and-fitch-2014-7

*http://www.huffingtonpost.com/2014/08/18/chipotle-obsession-toofar_n_5676152.html
http://fortune.com/2011/09/12/chipotles-growth-machine/
http://www.forbes.com/lists/2011/21/private-companies-11_BurgerKing_A5EZ.html
http://www.yum.com/investors/annualreport/11annualreport/2011_AR.pdf
http://nrn.com/chipotle/chipotle-grows-traffic-123-2q
http://www.forbes.com/sites/greatspeculations/2014/06/23/how-the-fastcasual-segment-is-gaining-market-share-in-the-restaurant-industry/
A Brief History of a Burrito
Chipotle began as a small taquera near the University of Denver. The
restaurant specialized in the creation of Mission Burritos (a burrito that was
stuffed with ingredients, popular in San Francisco) other than that, it was
not particularly unique. At the time, Taco Bell had virtually uncontested
control of the Mexican fast food market with 1600 outlets; as a measure of
market strength, Taco Bell's nearest rival in the Mexican fast food segment
was Naugles, a California-based chain with only 160 outlets (International
Directory, Taco Bell Corp). It seemed unlikely that the original Chipotle
would survive for long in the face of such competition.
With the perfect vision of hindsight, it is possible to make all kinds of claims
as to why Chipotle succeeded. Perhaps it was the location Colorado has
little Mexican cuisine, and competition was probably slim. Perhaps it was
the consumer base college students are often willing to spend money, and
it is possible that many students from the University of Denver enjoyed a
filling burrito for lunch. Perhaps it was a unique combination of ingredients
Chipotle had, somehow, bought from the right suppliers and built delicious
meals from the get-go. Perhaps people were just tired of the same fast food.
The answer is, unfortunately, lost to history.
But Chipotle definitely had something going for it. Within a month, the small
restaurant was selling over 1,000 burritos per day, more than ten times the
amount needed to be profitable (Forgrieve, Feeding Frenzy). Two years
later, Chipotle opened a second restaurant with the proceeds from the first;
five years later, Chipotle had 14 restaurants operating in Colorado (Farzad).
The company implemented a basic yet effective business model: get money,
expand, repeat. However, expanding outside a regional market is difficult.
Chipotles story could have ended here: another regional chain with a

strong regional fan base, and nothing more not unlike InandOut
(California), ShakeShack (East Coast), or SmashBurger (North East).
Maybe it was luck, maybe it was the scent of money (a strong force in a
capitalistic society). In 1998, McDonalds turned its piercing gaze towards
the regional Colorado chain with 16 stores. An initial investment mixed with
the Chipotle business model (get money, expand, repeat) led to the birth of
Chipotle, Kansas (Farzad). Additional capital infusion allowed Chipotle to
become a national chain; by 2005, it had over 500 restaurants in the US
(Farzad). It had cemented its place in the fast food market and had already
begun redefining what it meant to serve food. The rest, as they say, is
history.
http://web.archive.org/web/20060218200835/http://www.rockymountainnew
s.com/drmn/money/article/0,2777,DRMN_23908_4419634,00.html
http://www.fundinguniverse.com/company-histories/taco-bell-corp-history/
http://www.businessweek.com/articles/2013-10-03/chipotle-the-one-that-gotaway-from-mcdonalds
A Marketing Pattern and The Land Ethic
Chipotle has about 1600 stores. One of them is near the
University of Denver. Another one is near Columbia University. There is one
near MIT, one near Stanford, and two near Harvard. See a pattern yet? All
told, there are over 300 Chipotle restaurants on or near college campuses,
and another 200+ on or near high school campuses (Chipotle on Campus);
Chipotle restaurants in general tend to be near high-density student
populations, including malls, downtown urban hubs, and, of course, schools.
Chipotle has shown a clear and consistent marketing pattern: they are
targeting relatively high education millennials and generation Y adults, 1834 year olds that identify with Chipotles Food with Integrity philosophy
(Low et. al., Strategic Analysis). In order to appeal to these inherently
modern individuals, the restaurant has created an inherently modern selfimage.
In crafting its identity, Chipotle had to deal with a unique challenge: the
speeds at which ideas were spread. Today, companies and individuals in the
public sphere cannot risk a single misstep, for fear of absolute destruction
at the hands of the Twitter hoards think about the increase in public
apologies from celebrities, politicians, and CEOs due to public pressure.
The pervasive spread of smart phones and the resulting wired in effect
means every individual has access to an instant messenger for
disseminating tales of dissatisfaction (George). This kind of public pressure

forces corporations to undergo careful and continuous maintenance of their

public image. The digital age is an age without hidden transactions and
secret dealings. If Chipotle wanted to convince customers to buy, the
company had to have an ideology that was reflected in both mind and body;
otherwise, someone would call them out.
It is important to note that the above musings on the importance of
technology in the food industry is not mere speculation. When the novel
Fast Food Nation and the film Fast Food Nation were released in 2001 and
2006 respectively, traditional fast food chains suffered massive, possibly
incurable damage to their public image. Customers no longer trusted these
restaurants, and there was a general shift away from them when and where
it was possible. According to Mr. Schlosser, the author of Fast Food Nation,
US food culture today rejects highly processed foods, genetically modified
foods, and the whole industrial approach to food productiontodays top
menu trends are local sourcing, sustainability, and nutrition (Schlosser,
Still a Fast Food Nation). This is because consumers realized, partially due
to Fast Food Nation, that the industry they bought from operated only under
a framework of profits, instead of moral and ethical considerations. These
complaints could only have existed en masse within a technological sphere
they bounced around in an echo chamber as outrage, horror, and disgust
fueled their spread on platforms that allowed them to spread, first on
MySpace, and later Facebook and Twitter.
The ethical complaints are, of course, intertwined with debates on green
energy, climate change, and environmental sustainability all hot topics
that only came about thanks to revolutions in technology and information
communication. According to Mr. Walsh of Time Magazine, As the food
movement matures and grows, it could end up being the best vehicle
available for achieving environmental goalsReforming agriculture and
promoting sustainability won't just help us get better and healthier food; it
will also fight greenhouse-gas emissions and water pollution (Walsh). The
nature of the necessary moral ethic for food is, as a result, inherently a
green one. Exploitation is no longer viable; the rhetoric of the nation has
fundamentally transformed.
This focus on the ethics of food would make at least one philosopher proud.
Aldo Leopold, an author, scientist, and early member of the
environmentalist movement, wrote about the need in society for a moral
system that includes soils, waters, plants, and animals[and] their right to
continued existence (Leopold). He founds his arguments in the idea that
man is part of an ecological community. Leopold would therefore be
disgusted by the profit-based ethical framework that fast food companies
use; his major criticism of society in 1966 was its focus on economic selfinterest instead of social conscience (Leopold).

In many ways, consumers today demand many of the same ethical

considerations Leopold suggested in 1966. Leopolds beliefs that (a)
creatures are members of the biotic community and (b) the communitys
stability depends on its integrity are reflected in modern calls for animal
rights and environmental sustainability. Leopolds argument for an
individualized conservation movement instead of a governmental one are
likewise represented today in the organic garden programs and the its-onyou-type marketing campaigns about reducing personal waste. The modern
environmentalist movement is about ethical obligations on the part of the
private owner (Leopold), just as Leopold demanded. But while the ethical
rules of food exist in the social conscience today, at the turn of the century,
food-focused moral discussion was just reaching the public consciousness.
The food value system Leopolds Land Ethic was only just forming in the
minds of the US population. People knew they needed to be ethical with
food; but they did not know HOW to be ethical with food.
Perhaps because of market insight, perhaps because of divine intervention,
Chipotle created a specific implementation of this food-based ethical
framework around the same time Fast Food Nation (the novel) was released.
In 2001, a simple mission statement entitled Food with Integrity was
adopted by Chipotle branches around the country. The statement set out
rules for how Chipotle should operate with regards to food by defining a
Land Ethic something that had never been done before in the industry.
So now we understand the historical context and facts of Chipotles growth,
and we understand why Chipotle needed to appeal to its customers using an
ethical framework that was inherently conservationist and environmentalist
in content. Chipotle titled this moral framework Food with Integrity. What
were the guidelines espoused in Food with Integrity? More importantly,
how does Food with Integrity link back to consumer concerns about ethics
and good food?
http://www.chipotleoncampus.com/
http://www.sfu.ca/~sheppard/478/syn/1141/Group_B.pdf
http://www.thedailybeast.com/articles/2012/03/12/still-a-fast-food-nationeric-schlosser-reflects-on-10-years-later.html
http://content.time.com/time/health/article/0,8599,2049255,00.html
Leopold
Pure Imagination and Food Inc.

A companys marketing is its public face; thus, the best way to analyze
Chipotles Food with Integrity value system is to look at it through the
lens of its commercials specifically, a commercial titled The Scarecrow.
Chipotles commercial is unlike any other fast food commercial in existence.
Besides the obvious tangible differences in medium The Scarecrow exists
entirely online, as a reflection of Chipotles modern viral marketing
strategy The Scarecrow differs from a traditional fast food commercial in
content and style.
Take a McDonalds commercial, Working Together, as an example of the
traditional fast food marketing TV spot. The piece features bright colors,
happy feel-good pop-synth, and smiles literally everywhere (I checked; there
is not a single actor who does not have a smile). There is subtle laughter in
the background as people go about their day, even though they are getting
up at sunrise. There are the sounds of fryers and scraping pans, indicative
of the wholesome food being made. The title itself, Working Together, is a
much happier euphemism for an assembly line. The overarching message of
the piece is explicitly clear: McDonalds is a happy place. They are,
according to the commercial, working together to make your day better
(Working Together).
The McDonalds commercial obviously has a lot of forgivable bias towards
McDonalds. However, it is important to note that the commercial frames
McDonalds as if it existed for the betterment of the customer as if it had
an ethical framework of helping the consumer. It obviously doesnt;
McDonalds is far too large for the chain to care about anything but profit
margins. It is also important to point out that the McDonalds spot does not
inspire critical thought. One does not leave the commercial thinking about
anything; the piece instead appeals to deeper emotions and instinct that tie
directly to hunger and enjoyment. It is not that the advertisement itself is
thoughtless on the contrary, it was carefully put together by experts in the
field specifically to discourage critical thinking of McDonalds and its
practices.
Compare Working Together with The Scarecrow. The Scarecrow starts with
haunting music as what seems to be a pleasant farm turns into a faded
painting on the corroded wall of a factory symbolism in the first 10
seconds. The color scheme is inherently depressing rust and cold metal,
instead of rubber and welcoming shades of yellow and red. Here, there are
no smiles. The pervasiveness of the commercial culture represented by the
omnipresent robotic crows is complete. The commercial introduces
viewers to the titular character, The Scarecrow, as he goes through what is
presumably another day at his job. The Scarecrow can only look on and fill
his part in the machine as he witnesses false advertising (100% beef-ish!),
animal cruelty, and environmental degradation. If he tries to do more, he

risks getting pecked by the crow hovering over him employee exploitation
at its finest (The Scarecrow).
The piece is laden with symbolism enough to easily warrant its own essay
(for the purposes of this piece, we will only cover the overarching themes).
The major motif that ties the piece together is the idea of reversal.
Everything in this dystopian world is turned around. Scarecrows are scared
of crows; consumers and workers are scared of their employers; a sign
proudly displaying ALL NATURAL hides machines injecting hormones into
chickens, while a massive happy-looking cow holding a burger holds actual,
terrified cows being tortured and detained in the dark; advertisements for
crow foods proudly claim farm freshness, something that is immediately
contrasted by the desolated wasteland that the company is harvesting from
(The Scarecrow). The world shows a blind consumer base happily
swallowing the lies perpetuated by a massive, all controlling company. This
piece isnt just dark; its like the creators read 1984 and thought this is the
world I want to portray, complete with thought-police and doublespeak.
Yet, the pain engendered by the piece encourages thought in a way that the
McDonalds piece does not. It encourages viewers to look beyond the
advertisements in front of them, to question their beliefs as consumers
about what goes on behind the curtain not just about advertising, but also
about what makes a fast food company. Cue key change in the music;
introduce greens and blues and other natural colors. The nature of the
commercial becomes inspirational as the titular Scarecrow opens a Chipotle
stand (complete with the chipotle pepper symbolism and the now-iconic
taco-in-a-red-plastic-bowl). The world is righted as the Scarecrow shoos
away the crow that is watching him. Suddenly, the previously ironic lyrics
about the ease of changing the world seem accessible and accurate; fast
food does not have to be the calculating machine portrayed earlier. The
commercial ends with an imperative to its viewers, and a slogan for
Chipotle: Cultivate a Better World (The Scarecrow).
Clocking in at 3 minutes and 22 seconds, The Scarecrow is much longer
than the minute long Working Together. Yet, one cannot help but think that
the Chipotle piece was worth the time. Almost 73,000 people agree (at
least, based on the YouTube upvote count). What is truly insane is the
massive spread of the Chipotle ad. YouTube shows over 13 million views for
The Scarecrow far more than the 100,000 for Working Together.
Chipotles commercial strikes a nerve in viewers that encourages them to
pass the piece on; McDonalds commercial encourages you to buy frenchfries.
If the themes of The Scarecrow sound and look familiar, that is because they
are almost entirely taken from Eric Schlossers Food Inc. Like Food Inc.,

The Scarecrow examines environmental sustainability, advertising and food

labelling, industry control, and the ethics of food production.
Food Inc. and The Scarecrow both show how the food industry has vertically
monopolized that is, found a way to control food from inception to
consumption. For example, Tyson in Food Inc. can be directly paralleled to
Crow Foods in The Scarecrow; both control the farms (means of
production), the advertising and labelling (means of marketing), and the
distribution and shipping (means of selling). Statistics from Food Inc. about
the consolidated market control of a few companies (80% of the beef market
controlled by 4 companies, for example) are clearly reflected in the
overarching pervasiveness of Crow Foods in The Scarecrow (Food Inc).
Similarly, both Food Inc. and The Scarecrow highlight how genetic
engineering has resulted in the rapid increase of animal growth mostly
chickens for a less time and cheaper cost. Indeed, it is not hard to see how
The Scarecrow reflects the interview with chicken farmer Carole Morison in
Food Inc. both depict the abusive nature of hormone manipulation, and
show the inherent negative effects on the chicken itself (Food Inc).
And, of course, the advertising of food companies depicted in Food Inc. is
rivaled by the depictions Crow Food advertising, both in hypocrisy and in
mind-boggling pervasiveness. Food Inc. points out how healthy food claims
are often bogus (Food Inc); The Scarecrow concisely summarizes fast food
advertising with two words: 100% Beef-ish (The Scarecrow).
In many ways, The Scarecrow depicts a world in which Food Inc. was never
released to the general public. It shows the logical conclusion to a cyclical
process of market consolidation. If one does not have the time to watch
Food Inc. in full, The Scarecrow is probably the best alternative.
What is amazing, of course, is that The Scarecrow is made and advertised
by a national fast food chain. Talk about a reversal: a fast food company is
upholding the same ideals put forward by a film explicitly designed to tear
apart the fast food industry. Unlike marketing for the sake of marketing,
Chipotle seems to truly believe in the sustainable development ideals put
forward by Food Inc.; it speaks volumes that Chipotle branches regularly do
screenings of Food Inc. in stores (Palmer).
Of course, this all ties back to Food with Integrity. Chipotles mission
statement is a reflection of the ideologies put forward by The Scarecrow
and, by extension, Food Inc. Food with Integrity is a commitment to avoid
to the best of its ability practices portrayed in The Scarecrow. It is a
promise to be honest to consumers, employees, and itself. Most importantly,
it is a value system defined by sustainable development, instead of one

defined by profits. It is Leopolds Land Ethic, implemented through

Schlossers vision.
http://www.adweek.com/news/advertising-branding/chipotle-serves-freefood-inc-screenings-106099
Food Inc.
The Scarecrow
Working Together
A New Fast Food is the New Sex
The first instinct will inevitably be cynicism: how can we trust
Chipotle? Fast food companies have been on the defensive for the last ten
years, thanks in large part to Fast Food Nation and Food Inc. Since then,
companies have stressed their green image using various marketing
techniques and public relations changes (100% real beef! 100% white meat!
Apple slices!). Yet, for the most part, these changes are superficial.
Chipotle, on the other hand, seems to take its value system and apply it in
very subtle ways that have nothing to do with public perception. Chipotle
buildings, for example, are built with recycled materials in a neo-modernist
style that emphasizes open pipes, chrome sheets, and polished wooden
partitions. According to Chipotle, these buildings often incorporate
renewable energy production through solar and wind power, water
reclamation, air quality optimization and efficient material sourcing (Food
Tech Connect, Chipotles Vision). Stylish, and green. Chipotle also pays its
employees far more than minimum wage, underscoring their belief that
employees are people, not tools. And, of course, Chipotles music selection
often heard in the background, always personalized, and never particularly
identifiable avoids commercialized pop and feel-good radio hits. Chipotle
speaks softly its marketing budget is slightly more than 1% of sales
(Lukovitz) and its commercials barely feature the brand itself yet it carries
a massive stick.
Everything Chipotle is doing is against the traditional fast food mindset.
Where fast food generally tries to cut costs, Chipotle funnels more money
namely, into employees, food sourcing, and green products. According to
Mr. Yohn, journalist at Fast Company, The common wisdom in the fast food
industry has always been that you grind out your profits through reduced
prices, expanded menus, and raised operational efficiencies...But Ells grew
Chipotle by going in the opposite direction. He determined that Chipotle
could introduce a higher quality of Mexican fare to a broader audience by
defining a different value equation for fast food (Yohn). It is a value system
that is completely counterintuitive to profit margins, and entirely consistent

with ethics. It seems that individuals put more importance on the latter;
even with Chipotles money allocation, the chain has grown like clockwork.
Ethics, it seems, is more profitable than profits.
This realization is indicative of massive societal changes. Chipotles success
shows that their marketing strategy is effective and accurate; that the
assumptions that were made about their targeted demographics are
correct; and that the corresponding cultural and sociological changes that
spurred Chipotles growth actually occurred.
What, then, happened in American society?
Chipotle assumed from the start that the modern generation would not be
fooled by looks something that the prevalence of video technology
eventually corroborated. The company leadership realized that in order to
appeal to customers, they had to actually act instead of appear to act. This
also implied that the younger generation would care less about the cost of
food, and more about the quality of food. The increasing prevalence of the
green movement and information about climate change suggested that taste
was not going to be enough; people had to feel good about eating the food
almost as much as they had to feel good while eating the food.
Ms. Eberstadt, an essayist and senior fellow at the Ethics and Public Policy
Center, points out that Chipotle was basically correct. The conversation
surrounding food rapidly became one of morality. Today, dietary laws are
not intended to be handmaidens to a higher cause, but moral causes in
themselves (Eberstadt). The result is a form of high-mindedness, a sense of
superiority that is easily capitalized upon. In a moral system, there is no
leeway; if something is immoral, it cannot be associated with. This is why
many peoplewouldnt be caught dead with an extra ten pounds or
eating a hamburger or wearing real leather (Eberstadt); doing so today is a
moral equivalent to condoning racism or sexism, and is often vilified as
such. Regardless of quality, restaurants that espouse moral values are
guaranteed some customer base; and, on the flip side, it is now seen as
social suicide to walk into a McDonalds.
Because Chipotles stated motivations line up so perfectly with those of the
current youth, it is not surprising that Chipotle has a cult following, or that
its popularity is dependent on word-of-mouth. The company is, in many
ways, a physical embodiment of the moral-food craze that has spread
throughout the nations culture. As a company, Chipotle can exploit the
moral requirements of its ethics-minded customers to expand its user base
and its physical presence.

http://www.foodtechconnect.com/2014/06/24/chipotle-vision-for-futuresustainable-restaurant-design-operations/
http://www.mediapost.com/publications/article/216937/client-of-the-yearchipotle-mexican-grill-the-c.html
http://www.fastcompany.com/3027647/lessons-learned/how-chipotlechanged-american-fast-food-forever
Food is the New Sex
Conclusions
Chipotle is an example of a brand being in the right place at exactly
the right time. Its predictions about the food market turned out to be
accurate, and as a result the chain was able to expand very quickly after its
initial regional spread. It is interesting to contrast McDonalds with Chipotle,
because the latter almost definitely could not have existed without the
former. As Mr. Farzad of Businessweek puts it, Amazing to think now, but
Chipotle, a torchbearer for eating out thoughtfully and sustainably, was for
a long time controlled by the very symbol of mass-produced, agro-heartless
fast food (Farzad). As an initial investor, McDonalds smelled money and
jumped on the chance to help Chipotle expand. Yet, McDonalds motivations
were decidedly profit based. In its attempts to make money, McDonalds
accidentally helped develop a type of fast food market that did far more
long term harm to its wallet a fitting tragedy for a tragic figure.
If the current market trend continues, the next decades will see the rise of
the fast casual marketplace. Chipotle has already begun to expand its
empire it has opened two pizza stores in Colorado, and Chipotle locations
in France and in China. It is likely that Panera and Five Guys, chains with
similar quality-over-price mentalities, will follow. The best case scenario is
obvious: because of the radical redefinition of fast food, the food industry as
a whole will overhaul its current system in favor of one that focuses on
environmental sustainability. Leopolds Land Ethic would finally become a
cultural fact instead of an intellectual dream. In the long term, food
contamination, animal rights violations, and profit chasing will give way to a
cleaner and more natural system.
However, a darker alternative is possible. Chipotle has been riding a swell
in cultural awareness that is predicated on a system wealthy enough to
afford cultural awareness. While Chipotle was successful in the latest
economic downturn, it is difficult to predict market fluctuations or their
effects. As a publically traded stock, Chipotle will certainly be more
sensitive to national and global economics; and, at the end of the day,
Chipotle is still a business. The question is: if one removes Chipotles

profits, how long would Food with Integrity survive? When profits become
scarce, Chipotles high minded anti-profit mindset will likely be the first
thing to go. Hopefully, this would be temporary; however, the damage to
Chipotles ethical standing may be irreversible.
The only way to avoid the latter scenario is to expand Food with Integrity
so broadly that the food system as a whole could not survive without it, even
in a time of economic downturn; and this in turn can only be done if
consumers everywhere demand change. Thanks in large part to Chipotle
and the rhetoric it encourages, a broader system of food-based ethical
consideration may not be that far away. Chipotle will now have a chance to
influence the conversation that surrounds food. And as Chipotle grows and
becomes more successful, more companies will be encouraged to take up
Chipotles ethical standards. At that point, culture will have changed not
only how it eats, but also how it thinks; and while the former is valuable, the
latter is entirely priceless.