06_Steve Ells

Founder & CEO, Chipotle
Denver - CO US

Cooking Up Fresh Ideas

McDonald's first invested in Steve Ells's 15 Chipotle restaurants in 1998. Today, there are some 300 Chipotles nationwide, with 100 more scheduled to open by year's end. But how does a little burrito chain keep its cool when a fast-food monster comes calling? Lots of innovation. That means better, fresher, and more socially responsible ingredients like Niman Ranch pork. And on January 21, Chipotle introduced Burrito Bols, burritos served in a bowl so carb-conscious customers can skip the tortilla. Meanwhile, Ells takes advantage of Mickey D's enviable resources, such as its top-notch distribution network.

From Steve's original entry:

Tell us what you do (or what your team or organization does) and the specific challenge you faced.

When Steve Ells created Chipotle in 1993, the clasically-trained chef set out to change the way people eat with fresh, gourmet ingredients prepared to order in a fast casual setting. Ten years and 300 locations later, he continues to revolutionize America's eating habits through a mission he calls "Food with Integrity." That mission means working back along the food chain to discover how vegetables are grown and how pigs, cows and chickens are raised, to find the finest, tastiest ingredients for each of his restaurants. In doing so, Chipotle became the first national restaurant chain to serve free-range pork and is now the nation's top restaurant seller of naturally raised meats using 33 tons per week of Niman Ranch pork, Bell & Evans chicken and Meyer Natural Angus Beef. Today over 300 family farms practice sustainable agriculture and responsible animal husbandry--about a fourfold increase directly attributed to Chipotle's national growth.

What was your moment of truth?

The moment of truth for our little burrito joint was the day we decided to form a partnership with McDonald's in 1998. Chipotle became the first brand outside of McDonald's corporate entity to gain their backing and resources. At the time, it was an unprecedented move and a remarkable paradox: A small, gourmet burrito joint and the world's largest restaurant operator working together for aggressive growth without compromising the food or culture of Chipotle? Chipotle faced the challenges head on by staying true to the original vision; that fast food and good food didn't have to be mutually exclusive and that it could be accessible to everyone. Chipotle structured the agreement so that McDonald's would essentially become the 'banker' without changing recipes, ingredients or culture; all the elements to which Chipotle fans and team members are loyal. Today, Chipotle selectively uses McDonald's resources for such things as distribution while leaving Chipotle's original concept essentially unchanged. Chipotle continues on their path for food with integrity and maintains the same high expectations for operations excellence and customer service as they did with the first Chipotle restaurant.

What were the results?

Chipotle:

  • Went from about 20 to 300 restaurants in five years
  • Ranked as nation's second fastest growing restaurant company in 2003
  • Is nation's top restaurant seller of naturally raised meats, selling 30 tons/week
  • Increased revenue over 50% between 2002 and 2003
  • Increased 2003 systemwide comp sales YTD 20% in relatively flat industry Steve Ells was named: One of 50 "Tastemakers" most progressive, influential persons shaping food service into the next century by NRN; A "Culinarian of the Year" by NRN; Fast casual pioneer by Restaurant Hospitality Magazine and awarded the Vanguard Award

What's your parting tip?

"You must do what you are passionate about and put yourself in positions to be open to luck."

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