A Chipotle Off the Old Block

How a local burrito joint wrapped up the nation's fast-casual food market.

When Chipotle became a customer three years ago, the Niman Ranch co-op worked with only a handful of family farms across the country. Today that number is almost 400. "Because of them, we've been able to add a couple hundred family farms. Just keeping up with their demand is a full-time job," says Bill Niman, CEO of Niman Ranch. "Steve is so committed to this. They are the key ingredient to our growth."

Consumers have been committed, too, requiring Niman Ranch to provide more than 2,200 pigs per week just for Chipotle. "Customers love it," Ells says of the carnitas burrito. "I think that a lot of people are pleased that it's from family farmers, raised the old-fashioned way."

This year, Ells also began serving chicken from Bell & Evans, a Fredericksburg, Pennsylvania-based farm that prides itself on raising chickens without growth-stimulating hormones or antibiotics. "We want to have the very best available," Ells says. "It's not just about fresh; fresh is not enough anymore. You also have to have the kind of raw ingredients that you can be proud of. That's our direction."

And he isn't just talking meat. About 10 percent of Chipotle's more than 350 stores currently sell organic beans -- a number that is expected to rise to 25 percent next year.

Using these high-end ingredients has affected the price, however: Carnitas went up $1 when Chipotle started serving Niman Ranch pork, and the cost of chicken rose by a quarter at the approximately fifty restaurants serving Bell & Evans chicken. The organic beans, however, did not raise prices, leaving the average burrito price about $6. But with the add-ons -- extra cheese, organic beef, guacamole, etc. -- and a drink, the average ticket price is $8.

Other than these price increases and the introduction of the Burrito Bol, which was rolled out in January to feed the low-carb craze, Chipotle's menu has not changed much over the years. "We could add fish, we could add desserts, we could add coffee, we could add chimichangas, breakfast and late-night," Ells says. "But we're going to stay focused on what we do well. And hopefully, we'll continue with these outrageous same-store sales. I think that the changes that customers really want are already in place at Chipotle -- and that is that year after year, we'll continue to have better raw ingredients. We think that the customer cares about what they are putting into their bodies."


June 2004: The PresentIn just eleven years, Chipotle has gone from one store to approximately 9,000 employees, and Ells expects to hire another 3,000 to staff the 100 stores being opened this year.

"There is still huge opportunity here in the United States," Ells says. "We've cracked the code in the U.S. in terms of real estate, demographics. And there continues to be consumer demand. There has always been more demand than supply at Chipotle."

But that doesn't mean Ells isn't considering following his parent company across the pond, introducing fajita burritos to Cape Town and barbacoa tacos to Tokyo. "Certainly we have looked at international expansion," he says. "I don't think that the timing was right a couple of years ago; I don't think that it's necessarily right today. But in the future, we'll definitely try some international markets."

Before that happens, Galloway, Kohland and Kohari would like to see a Chipotle in Boston and Norfolk. They're planning a road trip here to plead their case, pay homage to their king and visit the birthplace of their obsession.

"Who knows where this is all going, but we're hoping that someday Chipotle will give us 'Burrito Ambassador' status, which means free burritos for life," Kohari says. "We have gotten a good deal of free lunches out of it so far, which is pretty cool."

A burrito can change lives.

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