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Chipotle outlines new marketing, tech, sourcing strategies

Chipotle Mexican Grill is planning to keep a spotlight on the simplicity and purity of its food with an integrated, multiyear marketing effort known internally as “collective beauty.” 

The chain also is striving to keep its same-store sales growing at least in single digits with such technological advances as offering an ordering app compatible with the Apple Watch, starting April 24. It acknowledged that the order-ahead capability of its earlier mobile app did not perform as expected, and the company took a $2.8-million charge to cover the misfire.

The Tex-Mex specialist also has begun the rollout of delivery through a partnership with the Postmates third-party service. The sales channel is being added in the 67 cities where Postmates currently operates, Chief Creative and Development Officer Mark Crumpacker told financial analysts yesterday. Postmates promises delivery within an hour.

Meanwhile, after feeling an impact on sales, the chain is rethinking how it deals with a self-created shortage of carnitas meat. To stretch supplies, Chipotle had been taking the pork off the menu of a market for a six-week stretch before rotating it back into that area and foregoing it elsewhere, an approach the company likened to a rolling blackout. But some fans of the meat stopped visiting when the pork wasn’t available, according to CFO Jack Hartung. Now, Chipotle plans to keep carnitas on the menu in markets where that meat is particularly popular.

It also has located a supplier that meets the chain’s thresholds for meat suppliers, and it anticipates a bounce back in supply starting in the summer and climbing back to normal levels during the fourth quarter.

Chipotle had stopped using a particular pork supplier, because its animal-welfare policies fell below the chain’s standards, leaving about one-third of the chain without carnitas at any given time.

The chain’s focus on the purity and integrity of its food ingredients is the cornerstone of the new marketing campaign, which began this spring. It “highlights the simple beauty of the minimal number of whole unprocessed ingredients in our food,” Crumpacker said.

There are more than 800 artificial ingredients used in food, he explained, noting that 85 are used in a single burrito offered by a competitor. The only Chipotle product that contains preservatives or additives is tortillas, and the chain is reformulating the item to removes artificial elements.

“In fact there are only 68 ingredients used to prepare all of the food we serve at Chipotle, the vast majority of which are simple ingredients you could buy at the local market,” Crumpacker said.

He added, “A majority of our customer, about 60 percent, are willing to pay more for better food,” which they define in part by the purity of ingredients.

That “collective beauty” message currently is being drummed in billboard, radio and print ads across 30 of the chain’s top markets, Crumpacker said. “Additionally, we are running more national advertising than ever before, leveraging print, streaming radio, search and social,” he said.

Another flight of ads will air this fall, with “a large online initiative” running during the summer, Crumpacker added without disclosing details. Other components will be deployed “over the coming years.”

The marketing and technology initiatives followed Chipotle’s posting of a year-over-year same-store sales gain of 10.4 percent for the first quarter, a jump that far outpaced industry growth but fell short of analysts’ expectations by about a percentage point.  CFO Jack Hartung said the chain expects comps to dip into the “low and mid-single digits” for the remainder of the year.

Meanwhile, the chain continues to focus on raising throughput. Restaurants served an additional 21 orders a day on average during the first quarter, according to co-CEO Monty Moran.

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