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Marketing chief Jim Adams says Chipotle wants to change everything. One burrito at a time. One of the first things you notice about a Chipotle quick-serve restaurant is that it smells really good inside. That’s because they’re actually cooking there. You can see right into the kitchen where they’re mashing the guacamole, grilling the chicken and chopping the cilantro. You hear music—different, interesting, earthy music. It’s loud enough to notice, but not so loud that it gets in the way. Artsy black-and-white photos and a big, flat, wood sculpture are spotlighted against brightly painted walls, accented with rustic timbers and rough-hewn metal. A young man with a thick Spanish accent cheerfully helps diners make their choices: “What can I get for you?” A customer responds, and he repeats the order: “Chicken Burrito! Black Beans?” There’s a definite energy and rhythm to it: “Next Please! What can I get for you?” If it’s your first time at Chipotle, you might find yourself slightly off balance. Sure, you’ve heard all the hype. But you also knew Chipotle was a fast-food place and weren’t quite expecting this. It smells good … it sounds good … it looks good … it feels good. This is the Chipotle experience: A fast-food restaurant crossed with fine dining. Average ticket: about eight bucks. It is the brainchild of Steve Ells, a graduate of the Culinary Institute of America who opened the first Chipotle as a way to fund a “real” restaurant. Fifteen years later, Chipotle is arguably America’s most successful restaurant. Its shares doubled in 2007, and while the fast-food category limps along with same-store-sales in single digits, Chipotle’s same-store growth-rate has been in double digits for 10 years running. Chipotle got there by challenging just about every rule that has governed fast-food success, wrapped in an ethos it telegraphs as “food with integrity.” Apparently, integrity is the best policy. Nobody enjoys talking about what “food with integrity” means more than Jim Adams—a former television news reporter who joined Chipotle eight years ago as its public relations director and today presents his title as executive director of marketing and bon vivant. Why are people responding to Chipotle? People respond to the fact that it’s great food. We use the best quality ingredients—the naturally raised meats, the organic beans, and the rBGH-free dairy. People are ready to eat this way, and have been for some time now. And when you put it in the kind of format that Chipotle is in—where it’s served fast and it’s a great value— What does the interior design say about Chipotle? The restaurant interior itself is inviting. It’s uncluttered. There’s not a lot that you have to read or take in; you can just experience it. It’s interesting because our interior is full of sharp edges and hard surfaces. You look at the chairs we have and you’d think that it doesn’t look like a place where people would sit down and linger. But they do. We hear it over and over and over from our customers. They find Chipotle to be a surprising place, and a place full of energy. But it’s also a relaxing place. It’s not a typical fast-food kind of environment and it does surprise people. It surprises you with the music that you hear, and people are surprised by how good the food is. What are you trying to accomplish with the layout? It’s laid out intuitively. You don’t see signs that say “order here” or “pay here.” You walk in and are led—not in an obvious way—but led up to where all the action starts. We’re aware that the first-time people come in and they have that sort of deer-in-the-headlights look. Our managers know how to recognize that and help people through the line more quickly and make sure they get what they want. How different is the layout from restaurant to restaurant? It can vary quite a bit. If you walked into any Chipotle, you would know you were in a Chipotle because of the trade dress. But we have restaurants that are as big as 3,500 square feet, right down to the original Chipotle here in Denver, which is about 800 square feet. We’ve got big restaurants, free-standers and end-caps. We’re in the suburbs and we’re in the urban core. What we try to do is complement the neighborhood we’re in and be part of the neighborhood, instead of putting up big neon signs. How would you describe the trade dress? I would describe it as sophisticated and perhaps even iconic. I think it’s unmistakably Chipotle. But it’s very sympathetic to the food. It features simple things—like birch veneer plywood, barn metal and the plumbing fixtures. We’re putting them together in a way that elevates them into something really unique, that says something about the whole atmosphere and the environment you’re eating in. Are you targeting a particular demographic? Yes—people who eat! It’s hard to say that there’s a perfect demographic because we appeal to an interesting and wide variety of people. Clearly, we use demographic information that helps guide us on our media buys. But there’s a Chipotle personality that we keep in mind. That’s a person who is concerned about what goes into his or her body, who is looking for superior quality, who wants to go into a cool atmosphere and wants a good value. It’s hard to just say it’s consumers between ages 18 and 34—everybody is looking for 18-34. We’re looking for someone who is not just a price-driven consumer. We’re looking for a quality-driven consumer. The food seems a little spicy for kids. We do have some things that aren’t quite as spicy. The pork—the carnitas—is not spicy. The barbacoa is spicy but I wouldn’t say it’s a peppery or a hot spice, but there is cumin and cloves. The beauty of Chipotle is that we could make something less spicy if that’s what you want—a cheese quesadilla or carnitas tacos — and make sure that it isn’t that spicy. We can feed your kids. Is the food actually healthy? It is. The thing about Chipotle is that people use it in different ways. People use Chipotle as an indulgence, and they use Chipotle to eat healthier. We have examples of stories where people say—hey, I started eating your food and lost weight or improved my health. You can make our menu work for you. We can meet practically any dietary requirement. You can eat vegetarian or vegan at Chipotle. We can work around problems you might have with gluten. We’re able to meet most people’s requirements. Won’t you have to expand your menu at some point? No. Why do you say that? Wall Street will demand it, for one thing. I understand what you’re saying, but there are examples of companies that haven’t done that. In-n-Out Burger would be a good example of a company that has stuck to a very focused menu. Maybe they’ve made a couple of changes, but they have stayed true to their core of burgers, fries and shakes. I would never say “never,” but right now we feel like we’re providing enough variety as it is. We have people who come two and three times a week. You can mix it up, change it up. Your motto is “food with integrity.” What does that mean? First and foremost, it means serving great quality food. To us, great quality means naturally raised meat — meat that has been raised the way it was raised years and years ago—without antibiotics, without added growth hormones, fed a vegetarian diet and raised humanely. This takes us to a point where the ingredients are so good that the preparation can be very, very simple. We don’t have to do a lot to them because the good, pure flavor of that food comes through. But “food with integrity” is not just about food. It’s also about how we run our company and how we treat our employees. We actively promote the people who have worked in the restaurants for a while, and really have learned how to run the restaurants, into managers. People who never expected that kind of opportunity, now have that kind of opportunity. We also think that’s the best way to ensure the restaurant quality and that the experience is still everything we are striving for it to be. What do you look for in your employees? That’s a hard thing to say. We’re looking more for desire than for talent. I mean, you’ve got to have talent, no question. But we look for people who want to do well, who want to learn and do great work, and who take pride in their work. There’s a saying that “your work doesn’t give dignity to you; you give dignity to your work.” That’s what we’re looking for—people who understand they can work hard and be successful. How do you train them? We teach them how to cook and we teach them knife skills. For those who are not fluent in English, we teach English. We teach people how to run a business. Each one of these individual Chipotles is a million dollar-plus business, and they learn every aspect of it—ordering food, managing people, timesheets, budgets, how to market their restaurant—everything. How fast will you grow? Over the last couple of years, we’ve been adding 90-100 restaurants per year. We’ve stated publicly that that’s in line with the plan for 2008. I think we’re now in all of the top 30 markets in the country. But a lot of those markets aren’t built out, or even close to built out. We just got into Philadelphia, and we just opened in Boston. There’s still a ton of potential in New York. We’ve just barely started in New Jersey and Long Island. And then when you look on the West Coast, we don’t have amazing penetration in Portland or Seattle, or even San Francisco, Los Angeles or San Diego. So there’s a lot of growth in existing markets for us before we go into some of the other places, even though we understand that people are looking forward to us getting there. Why don’t you franchise? Well, certainly you could grow with less capital. The risk is on somebody else to make sure it’s successful. But we feel like we can maintain the quality we want by running company-owned restaurants. We think that’s the best way for us right now. How big can you get before you get bad? That’s a tough question! Obviously our hope is that we will stay good. Marketing plays an important role in that by not overdoing it, and by not becoming a super-loud advertiser. And we’re a long way from becoming a very, very loud advertiser. What should advertising accomplish? Advertising should reflect the personality of the brand, of course. You could make the argument that advertising should to some extent drive sales. But marketing should also be the soul of the company. We are protective of the brand and willing to stand up and say, “let’s not become very loud advertisers.” I think we can play an important cultural role in the company—and we do. How do you roll out a new restaurant? We have a formula that we follow, with some variations within that formula. We know what works for us and how we’d like to introduce ourselves into a new community. So, we use local store marketing, PR, and the website. We do some advertising. We have gone into some markets where we’ve advertised a little bit heavily if we know there’s demand for Chipotle and want to make a splash. But we’ve also gone into markets more quietly and relied on more grass roots types of activities. Do you have a loyalty card program? No—although we’ve been asked. We want people to be loyal to us because of the great food they eat at Chipotle and the great experience they have. That’s the best way to build loyalty. How big is your marketing department? I have a team of about twelve people. About five of them answer customer emails through the website. We’ve got people who manage the advertising and some in-house creatives. We’ve got a PR person, and we’ve got a person who runs the local-store marketing activities. In addition to the 12 people based in Denver, we have a team of about 45 local-store marketing people who are in the field building community relationships and talking to people, face-to-face, about our food and our concept. It’s very, very powerful. You could argue it’s the soul of our marketing efforts. We have a very vigorous PR program. Relatively speaking, we invest a lot of money in PR and have a team of freelance PR people all around the country who are pitching our story. That’s always been a big part of our marketing mix and our marketing success. How has that worked for you? We were one of the first quick-service restaurants to break down the doors with restaurant critics who normally would never set foot in a fast-food place (see sidebar). Getting restaurant critics to write about Chipotle is a way to tell the local community that—wow, their food critic is saying good things about this quick-service place. And it only costs a few dollars to eat there. That’s pretty powerful stuff. How does innovation happen at Chipotle? Carefully! We do believe that good ideas can come from anywhere. We’ve received good marketing ideas from our restaurant managers that we’ve used. We’ve made changes to our operations in the kitchens based on suggestions from customers in the restaurants. Innovation also comes from the corporate office occasionally. We’re always looking for ways to do things right. That’s what drives innovation. What is your greatest challenge? Our greatest challenge is to take something that has been widely lauded and praised and keep it from becoming so ubiquitous that it’s not precious anymore. That’s hard to do. But it can be done, no question about it. You just have to be smart and thoughtful about the decisions you make, and not do knee-jerk kinds of things. When you’re developing your marketing strategy or working with an agency, you need to be very sure about the direction you want it to go, even when you’re presented with other things that may deviate from that direction. What do you hope to accomplish? I’d like Chipotle to continue to grow so we can continue to make this great quality food available at affordable prices. I’d like Chipotle to change the way people think about a quick-service restaurant, and that others begin to follow suit. You know, there’s no excuse to serve crap. There just isn’t any. And too many places serve crap. That’s what I’d like for people to say eventually—that Chipotle changed everything, for the better. n -- JIM ADAMS, executive marketing director at Chipotle Mexican Grill, oversees all marketing activities for growing purveyor of gourmet burritos, including advertising, creative development, local-store marketing, PR, and online marketing programs. -- Sidebar Cool Cuisine You’ll find fantastic food, fast service and a neat space,” writes Susan Swagler, a restaurant critic for The Birmingham (Alabama) News. And good music: “During a recent visit, we heard an eclectic mix—Jeff Tweedy followed by Ben Harper followed by Billie Holiday, all interspersed with traditional and updated music by Mexican artists.” However, she writes: “Fab tunes aside, you’ll want to visit for the food. Chipotle does a few things very well.” For example: “A burrito with chicken was fantastic. The chicken, marinated in a chipotle adobo and then grilled, was moist and flavorful. It graced a tortilla stuffed with cilantro-lime rice, black beans, cheese and sour cream.” “A fajita burrito, made with carnitas was just as good ... seasoned with thyme, bay leaves, juniper berries and freshly cracked black pepper...A vegetarian burrito, made with fresh guacamole and savory, firm black beans was also great...Another burrito of tender, moist grilled steak that had been marinated for hours in a rich chipotle adobo, also pleased.” “Four crispy tacos filled with barbacoa (juicy shredded beef, well-flavored with cumin, cloves, garlic, oregano and chipotle adobo) turned out to be the favorite dish...We shared a couple bags of fresh chips and two of the salsas—the delightfully hot red salsa and the milder green. Both were tasty...A couple of margaritas in plastic cups ($3.50) were surprisingly good.” “The folks dishing it up will help you, ‘the steak is spicy, the carnitas not so much.’ It’s these options and their many combinations that back up the idea of ‘a few things, thousands of ways.’ Once you’ve put together your meal your way, you pay up and sit down (or as the menu says, ‘carry the love home with you.’” And “love,” concludes Susan, “is not too strong a word...Chipotle is that good.”
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