Chipotle Mexican Grill is among the most prominent, and was certainly for many years among the most vocal, of a new breed of US fast-casual chains that set out to replace processed and artificial ingredients with fresh high quality while also providing the same speed and efficiency as McDonald's or - more specifically in this case - Taco Bell. The chain's profile was further boosted by a series of charming, widely acclaimed animated films which highlighted its commitment to "food with integrity". Indeed it was all going exceptionally well until summer 2015, when Chipotle suffered unconnected food poisoning outbreaks at different restaurants. A series of further incidents spread across a total of 14 states later the same year prompted a sharp decline in performance, as well as a complete overhaul of all the company's food preparation systems. The precise cause of the outbreak was never solved, but several different ingredients came under suspicion. A gradual recovery during 2016 was up-ended once more during 2017 by new outbreaks and again in 2018 by a single incident in Ohio that poisoned almost 650 people. There have been no further incidents since then. By the end of 2020, there were 2,768 Chipotle restaurants, all company-owned and operated, and almost all in the US, with fewer than 40 outlets in Canada and Europe. Chipotle had almost 27% share of the US Mexican limited service market in 2019 (down from 29% pre-outbreak) behind Taco Bell's 55%. No other chain has more than 5% share. Revenues have recovered strongly since the poisoning outbreaks, almost reaching a best-ever $6.0bn for 2020, with net income of $356m (despite the impact of Covid closures). The company has also experimented with different formats, launching ShopHouse Kitchen offering Asian cuisine, burger concept Tasty Made and Pizzeria Locale. However, there were only ever a handful of outlets, most of which were shuttered between 2017 and 2019. Steve Ells, who founded the business in 1993, stepped down as CEO in 2018 in favour of Brian Niccol, recruited from Taco Bell. Ells remained executive chairman until early 2020, when he finally exited the group. Ironically, a key player in the success of Chipotle was Big Food itself, McDonald's, which acquired a controlling stake in the business in 1999 when it had only 14 outlets in Colorado and helped expand that number to over 500 nationally by the time its divested its stake in 2006 via an IPO.
Capsule checked 12th November 2020
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Adbrands Update 25th Jan 2021: "Can A Burrito Change The World?". Here come the Super Bowl ads! It's a little under two weeks till the first big advertising event of 2021... and its sporting equivalent of course. As you might expect, this year will be quite a bit different. No crowd for example; also the absence of multiple Super Bowl stalwarts like Coke, Pepsi and Budweiser, who are being supplanted by a plethora of first-time Big Game advertisers. One such is Chipotle Mexican Grill whose admirable spot from Venables Bell & Partners is the best of the early releases so far. It's almost a live action reprise of Chipotle's much loved 'Back To The Start' animation from a whole decade ago. This time, instead of an animated Willie Nelson there's an idealistic kid and his snarky big sis, debating the possibilities of mass-market foods derived only from sustainable methods; that's an issue that has long been close to Chipotle's heart.
Adbrands Weekly Update 22nd Mar 2018: Chipotle's new CEO Brian Niccol was quick to fill the vacancy created by the departure of chief marketing office Mark Crumpacker last week. He reached out to his former Taco Bell colleague Chris Brandt, who will join Chipotle as CMO next month. Brandt has spent the past two years as marketing chief of another restaurant group, Bloomin' Brands, parent to Outback Steakhouse and other chains.
Adbrands Weekly Update 15th Mar 2018: Chipotle Mexican Grill's chief marketing officer is the first casualty of new CEO Brian Niccol's overhaul. Mark Crumpacker is leaving the struggling restaurant chain this week. His successor has yet to be named.
Adbrands Weekly Update 15th Feb 2018: Still struggling to maintain momentum following a series of food contamination incidents, Chipotle Mexican Grill poached rival Taco Bell's widely respected CEO Brian Niccol to lead its turnaround. Chipotle's founder Steve Ells had already announced plans to move up to executive chairman. "Brian's expertise in digital technologies, restaurant operations and branding make him a perfect fit for Chipotle," he said. Despite continuing contamination scares, Chipotle's revenues rebounded from its dismal 2016 to $4.47bn, just below the best-ever $4.5bn it reported in 2015. Same-store comps were up over 6%, and net income topped $176m, even after a large one-off tax charge.
Adbrands Weekly Update 30th Nov 2017: Chipotle Mexican Grill's founder Steve Ells launched a search to find his replacement as CEO as the once-feted chain struggles to recover from a string of food contamination outbreaks and a slump in sales. In a statement, the company said it was seeking an executive "with demonstrated turnaround expertise to help address the challenges facing the company, improve execution, build customer trust, and drive sales." Ells will become executive chairman as soon as a new leader can be appointed.
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