Product recalls happen all the time, to the point that they become just so much clutter in our everyday lives. It’s hard to keep up with all the mail from our car’s manufacturer, as well as all the other products that are issued a “come back to me” notice. That’s another way of saying they have become mildly annoying, and we often go on with our lives not to be bothered.
But when it comes to things we put in our mouths, our ears perk up. This is not just something we use or wear; no, we are eating it. Those marketers’ products have just entered sacred space, our personal sanctuary. For this reason, it is usually difficult for any food product company to fully recover from a food safety crisis.
One of the best examples is that of Chi-Chi’s, the once-popular Tex-Mex chain. Although it had already started to lose its luster, a hepatitis A outbreak at a Pittsburgh location sickened 636 and killed four. It was enough to sink the chain for good.
But then there are the anomalies, like Chipotle, which was assessed $25 million in fines for “food adulteration” stemming from at least seven documented incidents between 2015 and 2018. If ever there were good reason for consumers to steer as far away as possible from a place, this was it. Their stock tanked, as you might expect.
I am betting that COVID was a blessing in disguise to Chipotle, though, as it has seized the opportunity to develop its “Chipotlane” contactless drive-thru at a time when everyone wanted to avoid other humans as much as possible. Furthermore, the pandemic caused us to forget prior transgressions. Their stock has done amazingly well during the pandemic, far better than it did under the pandemic of its own design. Now the company is on a growth spurt, wanting to expand from nearly 3000 units today, to somewhere between 6000 and 7000 units.
And small towns are the focus of that growth.
With “small towns” being defined as any city with more than 40,000 persons, this will allow Chipotle to follow a strategy used by McDonald’s. There should be no surprise with this move, because Chipotle, which was launched with one Denver store in 1993, once counted McDonald’s as its primary investor. With McDonald’s money, the chain rapidly grew by nearly 500 stores before the burger chain pulled out.
Critical to all of the new stores coming will be the presence of its Chipotlane, which is exclusively for those who have placed digital orders. In other words, don’t plan on using this as a standard drive-thru, giving your order at a kiosk and then proceeding to a window.
It’s a trend being embraced by others as well, like Taco Bell. I suspect the fast food joint of the future will be more and more about eating your food somewhere else. You know. Kind of like the way it was before McDonald’s added indoor seating starting in 1962.
It’s a great idea, too, because these new stores do not need to be as big as prior units. With so much emphasis on pick-up, why pay for buildings that won’t be fully utilized?
It’s a strange turn of events for Chipotle, because before COVID, many had written them off. But by being able and willing to pivot at a time when public consciousness had been redirected, they came out a winner, poised for growth.
Put that in your burrito and think about it.
Dr “Black Beans And Rice, Please“ Gerlich
