Ah, Chipotle (NYSE: CMG)
The burrito’s version of Subway.
An astonishingly successful fast food – sorry, restaurant – chain. Started when a white, ambitious culinary grad, with his daddy’s money, who couldn’t hack it as a line cook, saw the popularity (and profitability) of burritos in the Mission district of San Francisco.
These weren’t no Taco Bell $0.39 mystery meat eats, either. In the Mission district, you’ll find some of the most delicious, freshest food that hard-working folk can create. Much of it from scratch.
Real produce. Real meat. Real flavors. That’s what inspired our young Steve Ellis into opening the very first Chipotle in… Denver. His ‘restaurant’ was founded on a very basic but shockingly forgotten idea – serve food with integrity.
Walk into any Chipotle and before you even order, you’ll find posters, fliers, and banners assuring, no, bombarding you that all their ingredients – meat and vegetable alike – are as natural as can be.
Grass fed beef. Free range chickens. And produce that’s grown without pesticides, poisons, or Michael Bolton music.
The timing couldn’t have been better… when Americans were just starting to latch on to the “organic” and “natural foods” craze… McDonald’s was rumored to sell artificial meat… and when Whole Foods (NASDAQ: WFM) traded for just $2.27 (worth over $50 today).
“Healthier” eating now had a real hero – sorry, Subway, but there’s nothing fresh about you.
But no one, not even the founder had any idea how popular the “Anti-McDonald’s” franchise would become. His initial plan was to sell just a little over 100 burritos a day.
By the end of the first month, his shop was selling more than 1,000 a day. And soon after, the 2nd Chipotle would open.
After that (ironically, thanks to the financial backing of McDonald’s) the chain would spread faster than pink-eye in a frat house.
Today, there seems to be more Chipotles opening than Starbucks. In fact, in 2014, a new one opened its doors every 48 hours.
Forget hotcakes, Chipotle’s selling like iPhones
Since going public in 2006, the “healthy-habits hero” has handed hungry Hathaways a handsome hunk of hoolah.
The stock IPOd for $22. And today it’s on top of the world, trading for more than $640.
All because it was around to hand people what they want. A simple menu. With basic ingredients that – I believe – you could actually pronounce.
And barring the fact that their food – like pretty much every restaurant – has the salt content of the Dead Sea, it’s among the healthiest, most trustworthy options out there.
But like Apple, when you are on top of the world, you find it gets harder to get bigger.
But could the restaurant do it?
On Monday they announced that the chain is finally – officially – GMO free!
… which might sound like a big deal… until you consider that the chain already was GMO free, except for the corn in its tortilla recipe.
So, I have a feeling this announcement was geared to increase the appeal to the anti-Monsanto-GMO crowd… and half designed as an early warning to regular shoppers that prices will certainly increase soon, as our pandering to get a larger customer base makes our once-affordable menu quite expensive, and we hope you stay with us”.
It could work out. It could not.
But when you’re already at the top, instead of attempting to gain every last niche of the market, perhaps Chipotle could take a page from McDonald’s book and invest in other restaurants that are popping up, stealing business from Chipotle.
Might as well play the monopoly diversification game.
