Chipotle’s unique aspect of fast food causes its stock values to soar

Chipotles unique aspect of fast food causes its stock values to soar

Nicole Becker, Online Editor

The worker instinctively grabs a gray bowl and spoons brown rice into it upon spotting sophomore Olivia Swyers entering the store. Swyers reaches the counter to be welcomed back by the piles of organic chicken and fresh salsas. She whips out one of her multiple gift cards as she gets ready to pay for the meal. Swyers is a Chipotle regular.

“I probably go to Chipotle about every other day,” Swyers said. “The workers and I are starting to become buds. They just see me and recognize me and start the beginning of my order without me even having to say anything.”

Consistent regulars like Swyers enhance the trend of Chipotle. People flood to Chipotle restaurants across the United States for the unique food experience that Chipotle offers. It’s this special experience that captures dedicated customers and success in the fast food industry.

the Chipotle story

When CEO Steve Ells graduated from culinary school in 1990, he knew that he wanted to open his own small restaurant. Ells acquired a job cooking at a restaurant in San Francisco, where he was fascinated by a local taqueria. The taqueria served burritos with large tortillas in tin foil, which inspired Ells with its authentic ingredients. Receiving a small loan from his parents, Ells moved to Colorado and opened the first Chipotle restaurant in 1993, just outside of the University of Denver.

With a culinary background, Ells created his menu with fresh, quality ingredients as opposed to typical fast food chains, such as McDonald’s and Burger King. From the beginning, Ells believed in the use of quality ingredients, despite their higher costs. However, it wasn’t until Ells’s visit to a local farm in 1999 that he decided to change the style of his produce. As of now, all of Chipotle‘s meats are organic, from farms that don’t allow animal confinement or the use of antibiotics or growth hormones, thus, revolutionizing the idea of fast food.

Extensive Expansion

Chipotle continued to expand its stores, eventually making its way to other states, like Minnesota and Ohio. With its rapid expansion, Chipotle opened its stock to the public on the New York Stock Exchange in 2006 with a starting price of $44. Since then, Chipotle has grown to 1,681 stores, and its stock value has increased to $680. Chipotle value has been consistently rising, and it can attribute its success to the simple basis of its fresh and organic products.

“I can see why a lot of people like Chipotle and eat it over other fast food restaurants like McDonald’s,” junior Maddie Parrish said. “It looks a lot fresher, and you can see the people making the food. You know the food isn’t gross or microwaved when you see it being made.”

Chipotle successfully captivated the interest of teenagers with its concepts of fast food.From meeting up with friends to random cravings, nearly every high schooler can find his or her way into Chipotle for some reason.

“[Chipotle] has really just become unique to the younger population,” Stifel financial adviser Mike Petri said. “They really love the concept of the healthier food and better taste. Therefore, you see that growth of stores, and people really flock to it.”

Proportion Problems

Many people see the fresh, organic ingredients of Chipotle and automatically consider it to be healthy food. However, just because something is organic and fresh doesn’t mean it’s healthy, as far as calories and fat content. By the Organic Foods Production Act, food can be called organic if it is produced without the use of substances that enhance the natural ecological balance.

Customers benefit from the vitamins, minerals and protein of Chipotle ingredients, but that often causes people to misjudge the calorie and fat content of the food. In fact, the order of a double cheeseburger, large fries and a Coca Cola from McDonald’s is less calories than the average burrito with chicken, black beans, rice, salsas, cheese and guacamole from Chipotle. The total of the McDonald’s order is 1,150 calories compared to the Chipotle order of 1,335 calories. However, much of Chipotle calories attribute to the portion control that Chipotle has established.

“I definitely think that they could cut down on their portion size,” Swyers said. “I can see how a big guy who eats a lot could want that much food, but I personally don’t need an amount of food quite like that.”

Innovating Fast Food

Chipotle masks the unhealthy calorie totals of burritos by allowing the customer to choose his or her own meal exactly how he or she wants it, thus also controlling the calorie content. Chipotle’s style of serving, with the ingredients lined up on the counter, not only allows the customer to personalize his or her meal, but allows the customer to see exactly how his or her food is being made.

“[Chipotle’s] presentation is phenomenal,” Petri said. “The fact that they have the grill right behind the counter and you can see them cooking the chicken or the steak makes a difference in people’s minds. The way that the meat and all of the ingredients are aligned and presented definitely makes a big difference.”

Likewise, Chipotle’s style allows for faster service to customers. Upon entering Chipotle, the customer may be greeted by an enormous line of people, but he or she typically finds that the line moves through within 10 minutes. This is credited to the more simplistic menu that Chipotle offers. With a shorter menu, customers don’t have to flip through long lists of options, but rather have their decision narrowed down to four simple choices. Without having to wait for people to make up their minds, the line is able to move much quicker.

“I don’t care how long the line is at Chipotle – I would be willing to wait, especially if I’m really craving it,” Swyers said. “One time there was a whole bus load of people who stopped at Chipotle from a field trip or something, and we waited like 45 minutes.”

Future of Chipotle as a Business

With its success in the United States, Chipotle is beginning to expand its business into overseas markets such as Europe and Canada. Despite its expansion, analysts of Stifel predict that Chipotle’s stock will be on a hold for some time. They believe that Chipotle is a quality, fast growing company, but its stock is currently priced too high and the company needs to catch up to that. If one is looking to invest short term, Chipotle is not the right choice; but as far as long term investment, Chipotle looks promising.

“It’s a marathon, not a race,” Petri said. “Making money and being wealthy is created over years; it isn’t just done overnight. I think for people it’s really hard to keep that concept in mind. Chipotle is a perfect example of this as a fast growing company that’ll most likely prosper in the long run.”