Chipotle founder Steve Ells discusses the ingredients behind two decades in business
There are thirteen "characteristics" required of Chipotle employees, who now number more than 40,000. One is "infectious enthusiasm." Another is "happy" — you must be happy. Half-time happy doesn't cut it.
And it's those attributes — along with fast food focused on slow-food philosophies, resulting in burritos that make loyal fans very, very happy — that have elevated Chipotle Mexican Grill to worldwide dominance and earned its founder, Steve Ells, the title of Most Inspiring CEO in America last year from Esquire.
Ells grew up in Boulder in a food-centric family. From the very beginning, he had aspirations of becoming a chef, going on from the University of Colorado to attend the Culinary Institute of America in Hyde Park, New York, with the intention of opening a fine-dining restaurant, one similar to Stars in San Francisco, where Ells cooked under the tutelage of star chef Jeremiah Tower. But while he had the chef's jacket and a few solid years of experience in a renowned kitchen, he didn't have the money to invest in a full-fledged restaurant. Instead, he had a novel, minimal-monetary-risk idea that could catapult that dream to fruition: a little burrito shack called Chipotle Mexican Grill.
"After a two-year stint at Stars, I wanted to start my own full-service restaurant, but I didn't have the funds to do so, so I got a modest loan from my parents and opened Chipotle with the goal of having it fund that restaurant," says Ells, who unleashed his first Chipotle on July 13, 1993, in an 850-square-foot former Dolly Madison ice cream shop at 1644 East Evans Avenue, near the University of Denver.
"I knew it wasn't a high-traffic area, but it was affordable to me, and I could just sort of envision what Chipotle would look like in that space, so I jumped in there with a contractor and we transformed it," says Ells, who recalls hauling his butt to the hardware store to buy the plywood, barn metal and conduit to make Chipotle's often-mimicked utilitarian light fixtures. "I didn't have much money, so we had to make these very simple parts from the hardware store work in order to create the design."
The initial lightbulb for the Chipotle concept came on while Ells was in San Francisco, eating at one of the taquerias in the city's Mission District. He was inhaling a burrito — a "giant tortilla" — that was stuffed with traditional Mexican ingredients and wrapped in foil. "I'd never seen anything like that before," he remembers, "but I had an idea that I could use these authentic ingredients and put my own twists on them."
The "twists" worked. "Even though I knew we would serve food fast, I didn't want it to be a typical fast-food experience," explains Ells, who admits he "knew very little about the fast-food rules." Still, his experiences at culinary school and Stars had taught him that applying classic cooking techniques to fast food wasn't out of the realm of possibility. "Fast food is typically made with highly processed, cheap ingredients and prepared in very industrialized ways," notes Ells, who wasn't remotely interested in pursuing that route. "Chipotle was going to incorporate all the things I had learned at the Culinary Institute and Stars, and really elevate typical fast food."
Chipotle was a smash from the start, and within a year and a half, Ells opened a second location. "When I told my friends and family that I was leaving Stars to open a burrito shop in Denver, they thought I was crazy, but not long after the success of the first Chipotle, I knew I had to open just one more, so I opened a second one on Colorado Boulevard, which turned out to be even busier than the first," Ells says. "Customers just loved what we were doing, and the lines kept getting longer...so we kept opening more."
And more...and more...and more. There are currently 1,450 Chipotle locations spanning the globe, with more — hundreds more — on the horizon. And while Ells has added another fast-food concept to his repertoire, an Asian restaurant called ShopHouse, he's backed away from his initial dream of opening an upscale restaurant. "People often ask me if I'll ever open that restaurant," he muses. "I have no plans for that now. We're completely focused on our larger mission of providing sustainably raised ingredients in an accessible format. I think we're having much more of an impact with the Chipotle concept than if I'd stuck to my original plan."
And while Chipotle is an extremely straightforward concept, Ells emphasizes that his fundamental convictions are the same as they would be for fine dining, despite the detour to a fast-food empire. "The key is using really beautiful ingredients — and this idea of taking a very simple ingredient and making it something that's more extraordinary is a theme at Chipotle," he says.
A Chipotle kitchen functions like that of a bona fide fine-dining restaurant, he notes: "There's constantly meats on the grill, always some beans simmering on the stove, vegetables sautéeing in the pan, whole avocados, fresh herbs on the stems, knives, cutting boards, pots and pans and lots of prep work going on; it's not at all automated, and our customers can taste the difference, because we bring out the best in our food." And much of that food is local, he stresses.
In fact, Chipotle will serve more than fifteen million pounds of locally grown produce in its restaurants this year, up from its 2012 goal of ten million pounds. "As the only national restaurant company with a significant commitment to using local produce on a large scale, we've steadily increased our locally sourced produce supply since beginning the program in 2008," says Ells. All of Chipotle's locally grown produce comes from within 350 miles of the restaurants where it's served. To celebrate that commitment and educate its eaters, Chipotle started Cultivate, a free food, ideas and music festival, which will celebrate its third year in Denver on August 17. But in the meantime, in honor of its twentieth anniversary, Chipotle is offering customers around the globe the chance to win free Chipotle — for life. (The Adventurrito contest starts July 13; go to westword.com for details.)
"We push ourselves to find the best-quality ingredients — ingredients that have traditionally been available only in high-end restaurants and specialty food markets — and making them available in a way that's accessible and affordable to everyone, which I think is a really important mission," concludes Ells, who in the following interview discusses the significance of high expectations, a frivolous lawsuit and his partnership with McDonald's, which started in 1998 and ended in 2006, when he took the company public.
Lori Midson: Talk about your upbringing. Was food an important element when you were young?
Steve Ells: I started cooking early on, as a very young child, so food and cooking have been important to me for as long as I can remember. I always liked to help my mom in the kitchen, and while other kids were watching cartoons and things, I was watching Julia Child. By the time I was in high school and college, I loved having dinner parties and entertaining friends over food. Many of my oldest memories involve food and the whole dining experience.
You graduated from the Culinary Institute of America in Hyde Park and spent several years as a chef before opening Chipotle and becoming a household name in entrepreneurial restaurant-industry circles. Do you miss cooking?
I've always loved to cook, but I've moved on to do other things. I opened Chipotle with the idea of using it as a cash cow to help me finance a "real restaurant" — the kind of place that was like Stars in San Francisco. But as Chipotle has grown, so, too, has our influence, and we're having more of an impact on the way people eat than I ever would have had if I'd stuck with my original plan. I still love to cook quite a bit, but I really like where I am now and what I'm doing.
Who's on the short list of chefs/restaurateurs who have most influenced you?
There are so many, but Jeremiah Tower, at Stars in San Francisco, had a lot of influence on me. When I graduated from cooking school, I went to work at Stars, which was one of my favorite restaurants in the country at the time, and that's where I really learned to cook and to taste food in a discerning way. There have been a lot of other chefs I've admired since then, but the experience at Stars was really important to me.
What are your ingredient obsessions?
Can I say chipotle peppers? We use chipotles in so much of our food — in the marinade for the chicken and steak, the beans and the carnitas. I've always thought there was a lot of depth of flavor and nuances to them, and I named the restaurant after the chipotle pepper because it's in so many of our recipes — and because I think its properties have been elevated and are really representative of what we do with the food in our restaurants.
What is your favorite piece of kitchen equipment?
What are your favorite ingredients to work with?
Whatever's fresh and really great quality. More often than not, it's more important to build around the best ingredients you can rather than trying to find something specific.
What food trend would you like to see in 2013?
From the Chipotle perspective, I've never really paid much attention to food trends. In our twenty years in business, we've seen a lot of trends come and go, but we've always stayed true to what we've done since the beginning. Ultimately, restaurants and cooking should be about great ingredients, classic cooking techniques and an extraordinary dining experience. Those are the things that we've always strived to achieve.
What food trend would you like to see disappear in 2013?
Anything that doesn't involve great ingredients, classic cooking and an extraordinary dining experience.
What's your temperament like?
I have very high expectations — including high expectations of myself — but I think that providing a great dining experience requires high expectations, which is something I've really tried to instill in the people working at Chipotle. Today we have more top-performing teams than ever before; that's something that Monty Moran, our co-CEO and driver of people culture, really brought to Chipotle. Having top performers who are empowered to achieve high standards is critical when you have 1,500 restaurants around the world. We need the best people we can find to make sure the experiences we're providing are the best they can be — and all of that starts with having high expectations.
The Chipotle concept, both the design and menu, is simple. If you had to do it all over again, is there anything that you would change?
I've had twenty years to make changes and not much has been tweaked. Part of what makes Chipotle work is its focus. By focusing on doing just a few things — and doing them right — we can do them better than anyone else does. People have loved Chipotle from the very beginning — and they still do. In fact, we're still turning new customers on to Chipotle all the time.
Why did you choose Denver to open the first Chipotle?
I grew up in Boulder and wanted to move back there from San Francisco to open Chipotle, but then I was offered the old Dolly Madison space on Evans in Denver, and I fell in love with it. Shortly after I opened it, I moved to Denver.
Did you fund it on your own, or did you have to beg, borrow and steal?
I convinced my parents to invest in the restaurant before I moved to Denver — and before I even had a name for the restaurant. Naturally they were skeptical, but they eventually decided to invest, and their $85,000 investment was the best investment they ever made.
Whenever anyone opens a restaurant, there are always cynics who say it'll never work. Did you have to deal with a posse of naysayers?
Most people were quite skeptical. I remember describing the concept in a lot of detail, and the feedback was that most everything was wrong, mostly because it was completely different from any other fast-food concept out there. Ironically, I believe that Chipotle has been successful because of those differences. And as customers tried it, I think they realized that those differences were very important to them, too. The idea that we could serve sustainably raised ingredients, prepared in an open kitchen with classical cooking techniques, and serve our food in an interactive format so that customers could get exactly what they want, was a new approach to fast food; I just had no idea that it would be the new fast-food model.
Rumor has it that employee turnover, especially at the management level, is low. What do you do to retain employees?
When we hire new crew members, we do so with the intention of hiring our future leaders. Almost all of our managers started out as crew — even our two restaurant support officers, Gretchen Selfridge and Mike Duffy, started out working with me in the restaurants when there were only a handful of Chipotles. There's a lot of room for our people to grow if they have the desire and ability to make those around them better. I also think that it's rewarding for people to find success in an organization that's always trying to do the right thing. Our team is proud of the food they serve; they know the importance of sourcing ingredients that are raised in a more sustainable manner, and it makes them proud to be part of a company that's doing something that's larger than its product.
I've also heard that every employee hired by Chipotle must embody "thirteen characteristics." In case someone reading this wants to work for Chipotle, what are those characteristics?
You need to be polite, hospitable, smart, ambitious, curious, happy, respectful, honest, presentable, conscientious, motivated, infectiously enthusiastic and have high energy. We can teach you the skills to work in our restaurants, but you really can't teach these characteristics. By the time you're an adult, you either have them or you don't.
Chipotle's tagline is "food with integrity." What does that mean to you, and why is it important?
It's not really so much a tagline as it is a philosophy. When I opened the first Chipotle, I was proud to serve food that was fresh, because we were proving that prepping and cooking fresh food could be an essential part of a fast-food experience. But I soon came to realize that fresh ingredients just weren't enough anymore. Not only did I need to serve fresh food, I needed to know how it was raised. And it all started with a visit to an industrial pig farm, a typical confined-animal feeding operation that's the sort of operation responsible for most of the pork supply in the U.S. What I saw there was a system of exploitation that made me very uncomfortable, and I knew our customers would be uncomfortable had they seen it, too. Shortly after that visit, we started purchasing all of our pork from Niman Ranch, where pigs are raised out of doors, or in deeply bedded barns, and without the use of antibiotics. Since that initial visit, Chipotle has been on a quest to find more sustainable sources for all of the food we serve. We purchase more meat raised without antibiotics than any other restaurant company, and we're the only national restaurant company with significant commitments to local and organically grown produce, not to mention the only company using dairy products made with milk from cows raised on open pastures and without the use of the synthetic hormone rBGH. More recently, we've been moving away from ingredients that are genetically modified.
Niman Ranch, which was sold to Natural Food Holdings in 2006, has since been labeled a "zombie brand" by a handful of critics. Do you feel as though Niman Ranch's products have been compromised under Natural Food Holdings' management?
I certainly wouldn't call it a "zombie brand." Niman Ranch has become more mainstream and it's grown significantly in scale, but we continue to value what they do and purchase products from them. They realized founder Bill Niman's mission, a mission we have in common, to change the way animals are raised and food is produced in this country. What's so great is that other giant food companies are now doing what Niman, and only a few others, were doing a decade ago. This makes it possible for more and more people to have access to meats raised in a better way.
Considering the immeasurable volume that Chipotle does, how are you able to source from responsible farmers and ranchers that can accommodate such high demand?
It's difficult to do. There is no switch you can throw to serve all organic, natural or local food — at least not with our size. But we've been willing to start small and build up over time. It took us about ten years to get to the point of serving all naturally raised meat, but we thought it was important to do, so we made the commitment and then built a system to enable us to do it over time. We're taking a similar approach with other ingredients, but it takes focus and discipline.
Kansas farmer and rancher Mike Callicrate, who owns Ranch Food Direct, contends that Chipotle refuses to accept livestock treated with antibiotics in cases where antibiotics are necessary to treat illness. "Under Chipotle's 'never-ever-not-to-buy' protocol, animals treated with antibiotics, whether responsibly or for treatment, or irresponsibly, for sub-therapeutic use, must be removed from its program, leaving Chipotle mostly buying meat from animals with false affidavits and/or far cheaper meat from the big industrial packers," insists Callicrate. What's your response?
Let me start by saying that we absolutely believe that sick animals should be treated with antibiotics. But, under our protocols, they'd have to be removed from our program. In the case of Callicrate, our audits found that they weren't adhering to our protocols, so we had to terminate our relationship with them, but it's nonsense to suggest that others aren't meeting those requirements. Antibiotics are a very serious issue in livestock production, and they're significantly overused. In fact, about 80 percent of all antibiotics used in this country are used in the raising of livestock, including in sub-therapeutic ways to stimulate growth and keep animals from getting sick. There's a very real concern that their continued overuse will lead to a proliferation of antibiotic-resistant "superbugs," and that could pose a very serious health threat to humans and animals. Antibiotic use has become a substitute for good animal husbandry. If you raise animals the right way, you really don't need to give them antibiotics.
What's the future like for sustainable farming?
I think the future is bright, although there are many challenges that we're facing right now and will continue to face as we move forward. What's heartening is seeing some of the best minds in this country focusing on food issues, especially in the context of sustainability. The fact that young people are questioning agricultural and environmental practices makes me hopeful about the future.
Considering that McDonald's uses inferior products and you're a big proponent of all-natural, organic and sustainable ingredients, I'm curious as to whether you have any regrets about that now-defunct partnership.
I'm thankful for the seven-year relationship that I had with McDonald's. Their investment in us allowed us to expand our reach in a relatively short time period, but I think we both realized that we had very different and distinct cultures, and that going our separate ways would be better for both of us. They have had no interest in Chipotle since shortly after our IPO, in 2006.
By and large, Chipotle's menu has remained stagnant since its inception. Are there future plans to evolve the menu?
The menu continues to evolve in terms of how we source our raw ingredients. As we continue to buy better products and source more sustainably raised ingredients, our food continues to taste better. This is one reason why people continue to come back again and again. I think that's really the right kind of menu innovation for us.
What's the secret to wrapping a perfect Chipotle burrito?
It really is an art that our crews continue to perfect. They would all tell you that the only way to perfect it is to practice.
When you eat in a Chipotle — assuming you do — do you table-hop to get guest feedback? What's the best feedback you've ever gotten from a guest in terms of advice?
I eat at Chipotle quite often; I love it. But when I'm in the restaurants, I tend to spend more time with our managers and crews, if I can. I like to see how things are being done, find out how the crews are doing and what we might be able to do to help them be more efficient. For those of us who aren't working in the restaurants, that's our primary job — to help the restaurants run better. But I do like to hear what customers think about our restaurants, and I definitely get a lot of feedback. I always appreciate that.
Despite the more than 1,450 Chipotle locations around the world, you've never franchised the concept. What's the reasoning behind that decision?
I think restaurants franchise for one of two reasons: one, they need capital to grow, or two, they need operators to run restaurants. We have a very strong economic model, and more than enough capital to fund our growth (which we have funded entirely through income from operations since going public), so we don't need that, and we are able to attract remarkable top performers to run our restaurants. Since we don't really need the things people look to franchisees to provide, I'd rather not give up the control, or the long-term return on investment, by franchising.
While most people would agree that Chipotle rules the world of burritos, you still have plenty of competition. How do you manage to stay relevant and at the top of your game?
All of our restaurants operate in competitive areas, and the nature of competition goes well beyond other burrito places. I'd suggest that we compete with a wide variety of restaurants — pretty much any place you'd spend about the same amount of money to get something to eat. But we don't really focus on that. If we run our restaurants the way we're capable of, we think we can do well anywhere that we're operating.
What would the world be like without Chipotle?
When I opened the first Chipotle, I had the novel idea of showing that food that was fast didn't have to be a typical fast-food experience — and over the years, we've certainly accomplished that goal. We're changing the way people think about and eat fast food, and we're reinventing a category that was really becoming characterized by cheap, heavily processed ingredients and a really unimpressive experience. We've turned that around and are serving great food, made with sustainably raised ingredients and prepared using classic cooking techniques, all in a way that's available and affordable for everyone. I'm not sure that would have happened without Chipotle. It might have, but nobody else is doing these things on the scale that we are.
When are you bringing ShopHouse, your Southeast Asian fast-food concept, to Denver?
We just opened our second ShopHouse in Los Angeles, and we're incredibly proud of the great dining experience that restaurant provides. The crew is terrific, and they're cooking delicious food and showcasing a whole new kind of cuisine to our customers. We think that ShopHouse continues to prove that Chipotle's success isn't just limited to burritos and tacos, but that it also emphasizes our focus on using excellent raw ingredients and cooking them using classic techniques in an open and transparent service format that allows people to customize their dietary and taste preferences. ShopHouse is a beautiful extension of our mission to change the way people think about and eat fast food, but we aren't getting into detailed expansion plans at this time. That said, we're excited about the prospect, as we think the people in Denver would understand and appreciate ShopHouse just like they do Chipotle.
Speaking of that concept, you were recently sued by British chef Kyle Connaughton, whom you hired — and then fired after he alleged that you ripped off the "intellectual property" of New York chef David Chang, who rose to fame with Momofuku, a concept similar to ShopHouse. Can you comment on his allegations?
It's very unfortunate that Kyle has decided to make these claims against us, as there is no truth to them at all. Kyle is apparently frustrated that we chose not to work with him, and unfortunately, the courts in this country are too often used as an outlet for that kind of frustration. I'm not going to get into all of the details of the case, but I will point out that David Chang has made no such claim himself. We have a lot of respect for what David is doing for food culture, and we hope he feels the same way about us. In the end, we are very confident that the courts will discover the truth about this — specifically, that Kyle's claims are entirely unfounded.
You were also in some hot water a few years ago for employing illegal workers. Clearly, you have thousands upon thousands of employees, so how do you ensure that you're only hiring people allowed to work in the United States?
We're proud to be a company that always tries to do the right thing — and our immigration compliance is no exception. In fact, we've really gone far beyond mere legal compliance with immigration laws, by going above and beyond what it takes to make sure we're diligent in employing only those people who are lawfully entitled to work in this country. In spite of that, we have found ourselves the subject of investigation by the government, and we've fully cooperated with these investigations and are confident that the investigators will eventually come to understand that we are — and always have been — a good corporate citizen. We try to hire only top performers, and our goal is to empower them to be our future leaders. Almost all of our general managers are promoted from internal crew positions, so it clearly doesn't serve us to hire people who aren't entitled to work legally in this country.
What's one thing that people would be surprised to know about you?
I never set out to build a huge restaurant company. I was an aspiring chef who just wanted to have a restaurant...and then opened a little burrito shop to help make that happen. People have simply responded well to what I was doing, and that's enabled me to do so much more. But I'm still happiest when I'm in our restaurants working with our managers and crews.
I've heard you say that you don't find yourself particularly inspiring. Just out of curiosity, how would you describe yourself...if not inspiring?
Focused. I'm always focused on ways that we can make our restaurants better, down to the smallest details. I think that's helped define what Chipotle is all about.
What's your best trait?
My passion for food and cooking is what really made me want to go to cooking school, and it's also what gave rise to my career. When I discovered that passion, it really ignited something in me that led me to do all of the things I've done at Chipotle, and it was the inspiration for opening that first restaurant.
Your worst trait?
I always have such high expectations. That's a good thing, to the extent that it helps us run great restaurants, but it can be hard for people around me.
What's the recipe for becoming a great restaurateur?
I think that being a great restaurateur requires tremendous vision, a really keen sense of hospitality, the foresight to know what makes for a great dining experience, and a relentless focus on details.
What's in the pipeline?
My plate is pretty full right now. We're continuing to expand Chipotle and have planted some seeds for future growth, most notably with expansion into new countries, including Canada, the United Kingdom and France — and we're opening later this year in Germany. In moving into new countries, our focus right now is on building the Chipotle brand and developing the people we'll need to support our future growth. We're also in the early stages of developing ShopHouse, which is very encouraging to me and, in many ways, reminds me of when I opened the first Chipotle. People really seem to like it, and I think there could be a lot of future potential there. Needless to say, all of this is keeping me extremely busy.
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