Chipotle is turning to product innovation to win over reluctant customers, investing in new food and beverage offerings such as cauliflower rice and organic drinks.
“Innovation is a hallmark,” said Chris Brandt, the company’s CMO. “We found out from suppliers that we are one of the few people still doing innovation.”
Today, the fast-casual chain announced it will begin serving new non-GMO and certified organic lemonades, aguas frescas and tea from farmer-founded Tractor Beverage Co. on July 21. The company will donate 5% of its profits from the beverages to causes that support farmers.
And just last week, Chipotle announced the test of a grilled cilantro-lime cauliflower rice in 55 restaurants in Denver and Wisconsin, a low-carb twist on the chain’s classic white rice recipe. Brandt said in a statement that the cauliflower rice in particular was in response to customer requests.
It’s all in line with Chipotle’s “Food With Integrity” marketing, which emphasizes the use of fresh, organic ingredients and played a key role in reversing an image that its restaurants were unsafe to eat at.
The company isn’t just counting on new products to boost business—health and safety are Chipotle’s biggest priority, Brandt said. The chain knows it’s more important than ever to both entice and reassure customers during a difficult time for the entire restaurant industry.
Heading into Covid-19, food safety was already a priority for the company, which instituted the use of gloves and wellness checks for all employees. Additional measures such as increased hand-washing were also added; in tandem, morale remained high as workers weren’t being laid off or having their pay cut, he said.
As a result, it’s been easier for Chipotle to adapt. It’s just a matter of continually getting that “Food With Integrity” messaging out there and visibly emphasizing cleanliness by pulling some previously DIY functions behind the counter coupled with constant sanitization.
It also helps that Chipotle late last year announced a redesign of its restaurants aimed at supporting its to-go business, already sizable at about $1 billion back in December.
The company had already begun installing mobile order pick-up shelves and tech-enabled assembly lines for food preparation, and aimed to add features such as walk-up windows and better placement of digital pick-up areas to help locations fill orders more efficiently and customers to pick them up more quickly.
“Digital really helped our presence. [We had] food that traveled well,” Brandt said, noting that the company had already partnered with DoorDash, then added Uber Eats.
Digital growth is also responsible for accelerating the company’s loyalty program, Brandt noted.
While Chipotle is experiencing some return of customers to in-restaurant dining, Brandt cautioned it may have to re-close some locations in light of recent spikes in Covid-19 cases.
Regardless, as Chipotle reopens its dining rooms, while there is large growth in customers ordering ahead, the chain is only noting some return to in-restaurant dining.
“The in-restaurant dining piece, we would love for that to come back,” he said. The hope is to hold on to the growth in order ahead as in-store ramps back up.
In terms of Chipotle’s marketing efforts, while it has had to switch some things around, the burrito chain continue to press forward.
Before the middle of March, Chipotle began to brace for the impacts of the pandemic—after the successful nationwide launch of queso. It flipped its media plan by placing its messaging in the places it thought its customers would now be, like Twitch and Hulu, and away from sporting events, Brandt explained.
“Each week seemed like a year in the way the consumer psyche changed,” he said.
As the pandemic continued, Chipotle found ways to connect with customers outside of its dining rooms: bringing people in quarantine together, such as tapping musician Luke Bryan to give an at-home performance on Zoom; hosting a virtual prom for graduating seniors; and tapping beauty brand e.l.f. to put together a Chipotle-inspired makeup kit.
Innovation continued on the product side, too: At the end of April, Chipotle tested a quesadilla as a digital-only menu item.
Once the federal stimulus checks began having an effect on sales, and then as states began to reopen, the central part of the U.S. began to bounce back in terms of younger people venturing out. In the Southeast, the chain’s business began to take off rapidly, followed by the Midwest and then the Southwest, with New York and California yet to catch up. But the reopening maybe occurred too quickly, he said, noting the recent spike in cases in some regions.
Throughout, the fast casual chain never went totally silent, Brandt said—Chipotle still spent about 3% of its revenue on marketing.