14 BARRON’S September 30, 2019
An interview with Brian Niccol, chief executive of Chipotle Mexican Grill.
By David Marino-Nachison
Let Your Burrito Sit a Bit
tinginlineandgoingdownthelinebecausethey
havetheirnuancestotheirorder,andit’sanother
levelofcustomizationthatyoucan’tgetintheapp.
On changes after the 2015 E.coli outbreak
It looks like there was a breakdown in some ele-
ment of the supply chain, meaning the supplier
wasn’tdoingtherigoroustestingthattheyshould
havebeen.Wedidn’thaveasecondarytocatchit.
That’s all been remedied.
WhenIgottoChipotle,oneofthethingsIwas
really impressed by was all of the progress that
theyhadmadeonthatfront.Now,canwecontinue
tobebetter?Sure.Willtherebenewtechnologies
that we’ll want to take advantage of? Absolutely.
And that’s what’s going on.
[W]ejustputinmyriadthings:Fromfiltration
systems in the bathrooms, to total restaurant fil-
tration. Washing processes...We just put in addi-
tionalstepslikeblanchingavocados,blanchingja-
lapeños. We’ve just added more and more steps.
On store openings
We did, I think, 135, maybe 140 restaurants last
year. I think we forecast 150 this year. I envision
nextyear,it’llbehigherthan150.Chipotle,atits
peak,wasopeninglike200to225,andIthinkwe
can get back to that run rate.
We just have to make sure we have the opera-
tionalexcellenceinplaceandthepeoplecapability
linedupsothatwhenwe’reopening150to200res-
taurants,oneortwothingsdon’thappen:Thoseres-
taurantsrunreallypoorly,orthe150or200restau-
rants where I take the people out to run those
restaurants all of a sudden run really poorly.
That’sthebalancingact.Becausetheeconomics
support“go.”Unfortunately,thebusinessisnotrun
by a spreadsheet. The business is run by people.
Thegoodnewsisthesitesarethere.Theeconomics
are there. So the opportunity is there. There’s
plenty of growth to be had in the United States.
On Chipotle’s fake-meat avoidance
I do think the plant-based food trend is a real
trend.I’mnotsureplant-basedfoodsthatlookand
taste like meat are a long-term trend. It’s food
chemistrytogetthattextureandthatexperience.
Ourplant-basedsolutionisorganictofu.It’sgreat.
Ithink[plant-basedalternativesare]goingtobe
part of people’s lifestyle routines, not necessarily
100% commitment. That’s still a small group that
are100%vegan,[or]100%vegetarian.It’sdefinitely
front and center. But right now, the way they’re
processed,itjustwouldn’tmatchourbrandpurpose.
On avocados and the company’s bottom line
It won’t make or break a quarter, but it can defi-
nitely have an impact. There are moments where
I think “I can’t believe this. I’m going to have to
talk about avocados” for all the other good things
that are going on. But we’ve made a commitment
to use fresh avocados. It’s a fruit. It’s a crop.
There’s volatility in it. It’s partly the harvest. It’s
also partly demand and how that supply is get-
ting allocated.
On waiting for burritos
Ithinkwejusthavesomeinherentadvantagesfor
delivery.Thefoodtravelsreallywell.Soaburrito
infoilorabowlisreallygreatforthedeliveryoc-
casion. I actually kind of joke about this. I think
ourburrito—afteryouhaveitmadeintherestau-
rant, you probably want to wait five minutes be-
foreyoudigintoitbecausetheheatkindofmelts
thecheesealittlebit,andthesourcreamstartsto
warm up a little.
When you get your burrito, give it a minute.
Source: FactSet Just give it a minute.
’15 ’16 ’17 ’18 ’
200
300
400
500
600
700
$
Recovered
Chipotle's stock has
more than recouped
its losses
BRIAN NICCOL WAS SOMETHING OF A SURPRISE HIRE
when he was picked to run Chipotle Mexican
Grill in early 2018, if only because his previous
employer,TacoBell,wasbuiltonmarketingbuzz
andquickgrubratherthanaffordablemade-to-or-
der cooking.
Anyonewhoharboredconcernsabouthisstew-
ardship has likely abandoned them. Chipotle’s
stock (ticker: CMG), which had been badly bat-
teredbyfood-safetyissuesbeforeNiccol’sarrival,
has risen 89% in 2019, and 225% since his hiring
wasannounced.InJuly,Chipotlereportedsecond-
quarter numbers that included a 10% same-store
salesgainandanear-doublingindigitalrevenue,
which includes online and mobile ordering.
Niccol recently stopped by Barron’s offices to
talkaboutthecompany’srebound,itsapproachto
technology,fooddelivery,and,ofcourse,avocados.
Herearehighlightsfromtheconversation,edited
for space and clarity.
On Chipotle’s turnaround
Iknewtherewasopportunity,andIexpectedthe
resultstoimprove.But,yeah,it’sexceededourex-
pectationsonthetimingofit.Whenyou’redealing
with2,500restaurants,75,000employees,andyou
are re-establishing behaviors, roles, responsibili-
ties,accountabilities—youwanttheadoptiontooc-
curasfastaspossible,butthereisachangecycle
that usually comes with human behavior.
I think part of the reason it worked so well is
wewerejustgoingbacktoalotofthefundamen-
tals of running a really good restaurant company
that was founded on a simple purpose, which is
thatwecandoculinaryandrealcookingandreal
ingredients at speed and at a good value.
On the difference between running Taco Bell
and Chipotle
The approach to ingredients is the real point of
differenceatChipotle.Atmypriorjob,youneeded
muchmorepromotionandentertainmenttograb
people’s attention. In this role, it’s much more
abouteducatingpeopleonourpointofdifference,
whichis,“Youcanhaveaccesstorealculinary,real
ingredients, prepared right in front of you.” And
that is hugely compelling.
On technology—and its limits
When we’re using technology to make it easier,
goodthingshappen.Orderingintheapp,ifyou’re
a new user or a light user, is an easier way to or-
der Chipotle than getting in line and going down
Photograph by Joel Arbajetheline.Now,aheavyuserofChipotleprefersget-