Story highlights Chipotle has a new addition to its menu. See if it’s right for you.
Chipotle takes at risk a former staple of its menu: the “food with integrity” motto.
Chipotle has been in the headlines a lot lately. Its sales have declined from the vaunted heights of 2015 — and that’s important considering the brand’s activist and health-conscious image was built on quality ingredients and healthy restaurant practices. But the tide is turning — and this new low-carb, low-fat “food with integrity” push, the phrase that makes regular appearances on the menu, has hit the company with a bevy of setbacks.
Fiscal second-quarter net income hit a three-year low in 2018 and down 3.9% compared to the same period in 2017. The company started adding ingredients (and practices) like refried beans to its menu and also started courting fans of healthier fast-casual food alternatives, like Shake Shack and Panera Bread. That potential shift may have hurt Chipotle’s bottom line, but has, according to some Wall Street analysts, prompted many shoppers to return.
The silver lining in all of this is that Chipotle has been winning over new consumers in the process. According to Consumer Intelligence Research Partners, “regular” Chipotle customers (i.e. folks who had been there in the last year) increased from 32% to 39% in the past year, while those who had only dined at the chain once in the past year increased from 13% to 15%.
In fact, the company still isn’t completely out of the woods — back in January, its New York City location announced it would be out of business, but at the time, it was being speculated that the decision was simply a restructuring measure.
Still, it was notable that while ShopHouse Southeast Asian Kitchen and Pizzeria Locale are officially out of Chipotle’s future plans, the company was able to open two more ShopHouse locations in March and add a PizzaRev location to its Denver, Colorado store.
Despite the aforementioned challenges, Chipotle has a new addition to its menu: smoked brisket.
The Tex-Mex chain is the first to market with this new item. It may be a traditional Tex-Mex dish, but the meat’s pan-smoked flavor goes in a completely different direction, which seems like a smart (and big) move for the company’s health-conscious, “food with integrity” recipe to move into mainstream US homes.
“People are willing to pay a little more to get healthier choices if they don’t feel like they have to compromise,” said Stacy Gottula, Ph.D., a marketing professor at Northwestern University’s Kellogg School of Management, in a press release.
What’s more, Chipotle’s new fast-casual approach could be a game-changer. One example of a successful fast-casual restaurant attempting this experiment is Chipotle’s nacho cheese.
The actual nacho cheese is a creamy, cheesy spread, but after combining the cheese with a few other ingredients — spices, honey and spices — Chipotle chefs turned it into a (if you can call it that) fine-dining experience. The move was met with such success that it now accounts for about 30% of Chipotle’s sales.
While Chipotle is first in line to test out the new item, more chains in the chain could potentially immerse themselves in this healthy-food trend. That might lead to more smokey meat options like Chipotle’s — and, of course, nacho cheese for the masses.