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With nearly 200 new restaurants slated to open in 2014 and the fastest-rising stock in the fast food industry, is Chipotle the new model for fast food?
Industry analyst David Tarantino says Chipotle is changing fast food the way Starbucks changed coffee shops and Home Depot changed home improvement.
Slate's Matthew Yglesias has even compared Chipotle to Apple's iPhone, writing, "Founder Steve Ells invented a way to maintain the basic speed and experience of the standard fast-food experience and make the quality of the food a little better. The better food costs a bit more money, but consumers turn out to be happy to pay a premium for a superior product."
Chipotle began using sustainably-raised food about 12 years ago, as part of its promise to deliver "food with integrity." The company's critics point out that it's hard to know what words like "natural" mean when it comes to food, because the U.S. doesn't have consistent national standards for those terms.
Critics also point out that the starting salary for workers, at about $21,000 per year, is not a sustainable wage. In addition, the company has been cited by the U.S. immigration service for hiring workers with faked work papers.
Chipotle co-CEO Monty Moran joins Here & Now's Jeremy Hobson to discuss these issues. He says the company has changed hiring practices, and as for wages, the company is structured to help employees move up the ladder within the organization.
Interview Highlights: Monty Moran
On using sustainably-raised food
“It’s hard work to do that. We have a purchasing team who’s dedicated to make sure that we know who we are getting food from. Of course all of our suppliers basically sign an affidavit to ensure that they are raising things the way we would like for them to be raised or grown. But also, we verify that through audits as well. And so, you are always wanting to work hard to make sure that the ingredients you are getting and that you are paying more for are exactly what you expect them to be.”
On how Chipotle workers are paid
“We are in a business where we have a lot of hourly employees working for us, and you know the nature of our business is such that it’s a fairly high turnover business at the crew level. But what we’re giving instead of a high – well we pay higher than most, and we pay higher than minimum wage in all cases – but what we do that I think is extraordinary at Chipotle is, we provide extraordinary opportunities for anyone who starts at the crew level. In fact, 98 percent of our general managers at Chipotle come from crew positions. And an increasingly large percentage of our field leadership, the executives of the company, has come up from crew positions.”
On why Chipotle has stayed predominately in the U.S.
“I think it’s just a question of the opportunities that are available for Chipotle in the United States are so profound still. I mean we have only 1,500 restaurants in the United States, whereas, some of the other restaurants you have mentioned have 10,000 or so. So there is a lot of room left for us to grow in the United States and there are a lot of people writing into our website ‘come to my town,’ and we are trying to fulfill that demand for what we are doing here in the United States as best we can. But that being said, we have begun to plant a few growth seeds in other countries. We’ve got six restaurants in London, England, we’ve got a restaurant in Paris with another about to open, we’ve got a restaurant in Germany now, and we’ve got a number of restaurants in Canada. So we think that there’s a huge opportunity for Chipotle to go to many, many other countries, it’s just a question of time. And we would rather grow smart rather than too quickly. And we would rather grow in a way we can continue to provide a really high quality dining experience, rather than just grow for the sake of growing."
This segment aired on December 10, 2013.
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