CHALLENGES WILL BE DIFFERENT AT CHIPOTLE
than beef, and the brand lost relevance with consumers.
During Niccol’s tenure — he took the top job in 2015 — Taco Bell became more digitally savvy and experimental. He helped to push new breakfast items, revamped the company’s social media strategy and even toyed with a more “upscale” concept (although that never really took off ).
The slogan “Think Outside the Bun” was abandoned in favor of “Live Más,” a nod to the emphasis on lifestyle, not product, that consumer brands have favored in recent years. New menu items, like the Doritos Locos Taco — which essentially turned a taco shell into a giant Dorito — helped create buzz. And it aggressively sold off company-owned stores to independent owners and operators, putting more of the risks and costs on franchisees.
Instead of being the ugly stepchild, Taco Bell became frequently cited as one of the top chains in the Yum Brands empire, which also includes Pizza Hut and KFC.
But Chipotle owns all of its 2,400 stores, and it rarely makes major updates to its menu. That means its marketing campaigns must focus more on details like the quality of its ingredients — an advantage that has lost some of its edge in the wake of several widely publicized outbreaks of food-borne illness at its restaurants.
“How do you revive a brand without innovation and without new news?” said David Palmer, a restaurant and food analyst at RBC Capital Markets. “They need to establish the brand momentum and get the cool back, which usually takes something new.”
Chipotle declined to make Niccol available for an interview. In a statement, the company said it had searched for the “skills and track record” that Chipotle needed.
“What’s more, he’s proven that he can apply those talents to a variety of environments and operational settings, keeping the customer experience top of mind,” the company wrote.
One issue with Chipotle’s limited menu, Palmer said, is that people tend to stick with their favorites. Customers can choose from four main items — burritos, tacos, burrito bowls and salads — and add a handful of ingredients to each.
“How do you get them on carnitas if they’re in chicken?” he said. “That’s the sort of clever stuff a real ace marketer can figure out.”
On a recent weekday afternoon at a busy Chipotle location in Midtown Manhattan, Sering Jallow, a 27-year-old hospitality student, was enjoying his usual order — a burrito bowl with brown rice, pinto beans and chicken. It’s a frequent destination on his lunch break, and he doesn’t even need to look at the menu board when he walks in.
“The first time I had it, I was just like, I’m sticking to this,” he said between bites. “When I’m walking in here, I know what I want.”
When Chipotle does introduce new menu items, it faces different challenges and considerations than the big fast food companies. It’s more vulnerable to changes in, say, the price of avocados or chicken than a fast-food brand, which can push some of those costs onto its franchisees. And so-called fast-casual restaurants like Chipotle — where, in theory, better ingredients justify slightly higher prices — are not used to churning out new options at the same pace as their lower-priced competitors.
Steve Ells, the company’s founder and CEO, told analysts on a conference call this month that adding menu items at Chipotle was tricky. He pointed out that the menu board itself is much simpler than, say, a Taco Bell, with its colorful displays for dozens of food choices, combinations and promotions.
“It’s not like you can put a whole new thing up on the menu board — like at a typical fast-food place,” said Ells, who will yield his post to Niccol next month. “Ingredients sort of become part of the overall offering.”
Chipotle introduced one major item last year: queso, a cheese dip. It was widely panned by critics, and the company altered its recipe after a surge of negative feedback. Chipotle did, however, credit queso with contributing about 2 percent of sales to the average check in the most recent financial quarter.
Whatever Chipotle does, it will not compromise on quality, according to Ells, who will remain at the company as executive chairman.
“I don’t think you’re going to see a situation where someone says, ‘To hell with food with integrity. We’re going to buy cheap commodity meat now and really turn this thing around,’” he said during the analyst call Feb. 6. “I just don’t — I don’t worry that that kind of a thing would happen.”