🌯 The Secret Ingredient to a Successful Business

What do 100,000 avocados, free cat toys, and a professional DJ have in common?

They’re all part of the secret ingredients that make up the Chipotle experience.

Okay, well maybe the cat toys were part of a fake ad campaign…

But the DJ? That’s real. 

Since 1998, the fast-casual Mexican grill has been using creative strategies to craft the perfect consumer experience. 

And it’s paid off. Chipotle went from a small store in Denver to a $9B burrito empire.

But how did Chipotle rise from humble beginnings to become a staple for millions of Americans? And make bank while doing it?

Here’s what I got for ya:

• 💸 $9B Burrito Empire

• 💪 Surviving Disaster

• 🔥 Crafting an Irresistible Experience

Read time: 4 min 49 sec

💸 $9B Burrito Empire

It was just supposed to be a quick fix.

Steve Ells was working as a line cook in a Michelin Star restaurant in San Fran.

Before work, he would go get a burrito from the Mission District. The burritos were enormous. He was entranced.

Little did he know, his before-work-fuel would change his life forever…

Steve didn’t want to work as a line cook forever. He had dreams of starting his own fine-dining restaurant. 

But he didn’t have the money.

So he decided to start small. 

His parents lent him $70k. 

Moving to Denver, he opened his first fast-casual restaurant in 1993.

What did he sell?

Mission-style burritos.

It was the first Chipotle.

He needed to sell 114 burritos a day to break even. 

By the end of the first month, he was selling over 1,000 a day.

A year and a half later, he opened another store. Soon there were 13 locations across Denver.

Chipotle was such a success, that young Steve Ells could not maintain it all by himself.

In 1998, Chipotle joined forces with its polar opposite in cuisine: 

McDonald’s. 

Yep, you read that right.

Who better to make Chipotle into the successful chain it is today than the chain icon itself?

In 1998, a friend of a friend who worked for McDonald’s got Steve Ells into a board meeting.

In a stroke of genius, Steve brought Chipotle burritos to the meeting. 

The board members savored the rich taste of sauteed peppers and onions mixed in with chicken and the fresh crunch of lettuce and ooey-gooey melting cheese… that they decided to invest $50M into Chipotle.

With McDonald’s help, Chipotle expanded from 16 restaurants in 1998 to over 500 in 2005.

By 2006, McDonald’s had invested $360M into Chipotle, owning 90% of the business.

Later that year, McDonald’s decided their part of the Chipotle journey was over. So Chipotle went public.

Their IPO was priced at $22. By the end of the first day, it doubled to $44.

Today? It’s at $2,929.

That’s how Steve Ells’ side project turned into a burrito empire.

But it hasn’t always been smooth sailing…

More on this:

• Steve Ells burrito empire

• The surprising relationship between McDonald's and Chipotle

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💪 Surviving Disaster

In 2015, disaster struck.

46 people across the US got sick from E. coli.

All of them ate at Chipotle the week before.

Sounds bad? Well, it gets worse…

 Less than a year later, an employee was feeling ill but finished their shift without being sent home. 

The result? 234 burrito enthusiasts got norovirus. 

And it kept going. More than 1,100 people got sick from Chipotle’s food.

Their stock price plummeted. 

People started associating Chipotle with illness instead of healthy food. 

Chipotle paid $25M in legal fines. That's the largest fine ever imposed in a food safety case...

But even after losing $620M in sales, Chipotle didn’t give up. 

So what did they do?

Two changed things:

• Food safety protocols

• Sick leave policy

Chipotle’s mission has always been Food with Integrity.

What they had to do was make their consumers believe in that mission again. 

So they launched the ‘Behind the Foil’ campaign.

Live in Times Square, you could watch Chipotle workers prepping in the kitchen.

They also hosted the 2019 Scripps National Spelling Bee.

Kids tried to spell ingredients found in other restaurants like carrageenan and dimethylpolysiloxane. And then they were asked to spell the natural ingredients at Chipotle like garlic. 

It was genius.

The only ingredient that’s hard to pronounce at Chipotle is “Chipotle.”

They refocused on their mission and survived.

Their stock price finally beat its 2015 pre-crisis high in 2019.

🔥 Crafting an Irresistible Experience

How do you keep customers coming back again and again?

The question every business owner asks himself.

And a skill that Chipotle has perfected.

This is how they reached $9B in annual revenue…

Ever noticed how grocery stores have long lines for self-checkout while there’s an open cashier? 

Or how people have started ordering online at restaurants instead of calling?

Limited human interaction has become the new norm.

And Chipotle knows how to profit from it.

In 2009, Chipotle launched an app so users can order ahead and skip the line. 

Now mobile orders make up 40% of total sales.

In 2018, Chipotle started building drive thrus: Chipotlanes.

It has been such a success that Chipotle is starting a new business model. 

In 2020, Chipotle opened its first digital-only restaurant. There is no seating…

This makes Chipotle a great place to grab quick health(ier) food. 

But what makes Chipotle truly irresistible to return to?

Their loyalty program.

Launched in 2019, it encouraged even more people to use their app.

And– for every $125 you spend, you get a free entree. 

Within 4 months, they already had 5M loyalty members. 

Now they have over 30M.

Chipotle has made its mark in the fast-casual food industry. 

They keep things simple but know how to adapt to their market.

More on this:

• How Chipotle's reward program makes them $2B in sales