The World’s 50 Most Innovative Companies- 34: Chipotle

HEADQUARTERS
Denver
WEBSITE
www.chipotle.com
TWITTER
ChipotleTweets

FOR EXPLODING ALL THE RULES OF FAST FOOD

Mark Crumpacker stared at the job description with disbelief. “A headhunter looking to fill a CMO position for another major fast-food brand got in touch with me,” says Chipotle’s chief marketing officer. “The description was really bizarre. The head marketing person runs the culinary team and is responsible for the whole menu!” It’s the food-marketing chain gone haywire, Crumpacker explains. New menu items become fodder for new ads; new ads need to be promoted on expensive mass media; and all that spending puts pressure on finding ever-cheaper ingredients to invent the next McRib. “It’s the crack of marketing,” Crumpacker says. “Once you’re on it, it’s really, really hard to get off.”

Crumpacker doesn’t play that game at Chipotle, choosing instead a fast-food heresy: Tell customers what’s really inside its burritos. “Typically, fast-food marketing is a game of trying to obscure the truth,” he says. “The more people know about most fast-food companies, the less likely they’d want to be a customer.” His creative approach is as unusual as that of co-CEO and Chipotle founder Steve Ells, a high-school pal from Boulder, Colorado. Ells continues to obsess over sourcing the finest sustainable ingredients as the company’s culinary chef. “Today, even with 30,000 employees, the crew will come in the morning and see all this fresh produce and meats they have to marinate, rice they have to cook, and fresh herbs they have to chop,” says Ells. “There have been many opportunities over the years to take that all away and introduce highly processed foods, but we’ve done just the opposite.” Ells and Crumpacker can point to results that validate their ethical practices: In 2011, total annual revenue reached $2.2 billion, same-store sales increased 11.2%, and restaurant operating margins hit a staggering 25.9%. “Chi­pole has proven it has a better business model,” says Clark Wolf, a restaurant consultant. “Grow, invest, grow, invest. It’s like a Warren Buffett lunch. They’re in for the long haul of profits, not the quick version.”

Now opening a new restaurant almost every other day, Chi­potle’s sustainable-food approach may have an industrywide effect. Instead of looking for suppliers that can reverse-engineer a chicken patty that costs 89 cents, Chipotle is undertaking ambitious projects such as working with farmers to breed almost-lost heritage chickens that can roam on pastures instead of being confined to crates. “Every time you open up two Chipotle restaurants, we add another naturally raised pig farmer into this farmers’ cooperative called Niman Ranch pork company,” says Crumpacker. “When we started, there were 50 to 60 of these farmers. Now there are between 600 and 700.”

In Chipotle’s version of the food-marketing chain, this focus leaves fewer dollars for aggressive, traditional advertising. Crumpacker, who joined the company three years ago, is tasked with making a complex message appealing. “Saying that we don’t buy dairy from cows that are given the hormone rBGH is not an appetizing message,” Ells admits. Crumpacker did cycle through two ad agencies in his first year, as he tried to find effective ways to communicate Chipotle’s “Food With Integrity” message. But when he hosted a series of screenings of the investigative documentary Food, Inc., Crumpacker understood that the only way to differentiate Chipotle was to replace traditional advertising with more emotionally engaging stories.

That’s when Crumpacker turned to CAA Marketing, the arm of the Hollywood talent agency plugged in to the best storytellers in the world. Crumpacker told CAA he had seen a heart-tugging two-and-a-half-minute commercial for Chevron called “Human Energy.” He wanted a Chipotle version. “If a company like that can make you cry, imagine if we had something comparable for Chipotle,” Crumpacker says. His idea was to tell the animated story of a hog farmer who creates an industrialized, efficient farm but one day realizes it’s not the right thing to do; he tears down his farm as an act of conscience and reverts to raising hogs on open pastures. CAA hired a director and reached out to Willie Nelson for a soundtrack. Nelson recorded a haunting cover of Coldplay’s “The Scientist” for a nominal fee. Before running the video on 10,000 movie screens, Crumpacker’s team released it on YouTube and it went viral, receiving more than 2 million views.

Nelson’s “The Scientist” is now the first song out of Chi­potle’s emerging music label, whose funds go to the Chipotle Cultivate Foundation, which will support family farms. Last October, for Chipotle’s second music video, Crumpacker got Yeah Yeah Yeahs frontwoman Karen O to cover Willie Nelson’s “Mamas Don’t Let Your Babies Grow Up to Be Cowboys.” This narrative humanized the devastating statistic that hundreds of families quit working their farms in the United States every week due to competition from big agriculture.

In other words, instead of a goofy king or a catchy slogan, Chipotle is developing a recognizable marketing campaign around the idea that our food production should be healthier and more ethical. It’s a theme that lends itself to different media. For example, in Pasture Pandemonium, an iPhone and Android game currently in development, players try to get their pig across a pasture without getting trapped in confinement or pricked by antibiotic needles. And instead of sponsoring a typical concert, last fall Chipotle staged a 17,000-person festival in Chicago called Cultivate. It paired chefs such as Amanda Freitag and Jonathan Waxman with local farmers for cooking demos, while CAA helped line up bands like Calexico to headline. As festival­goers roamed through the entertainment, they also discovered tents that informed them about shocking but common industrial-farming practices-e.g., female pigs being crammed into farrowing crates for months on end. Now Crumpacker says he is in talks with Jonathan Safran Foer, author of the noted pro-vegetarian manifesto Eating Animals, to develop stories that could appear on Chipotle’s packaging. “I think they’re open to try anything because they inherently want to change food culture,” says CAA Marketing agent Mark Shambura, of the brand’s bold collaborations. “They’re a huge billion-dollar company and they’re still able to be nimble and curious.”

CHICKEN
Chipotle is undergoing a 10-year project with Good Shepherd Poultry Range to resurrect heritage breeds of chicken that can survive on pastures.

BLACK AND PINTO BEANS
Forty percent of the beans are organically grown and another 5% are grown using conservation tillage methods, which reduce soil erosion.

CHILI-CORN SALSA
The company never uses genetically modified corn. Sixty-five percent of American corn is from GM crops.

LETTUCE
The lettuce is sourced from local farms during the growing season.

GUACAMOLE
All cilantro is organically grown; the goal is for 10% of all avocados to be organic.

CHEESE AND SOUR CREAM
All dairy comes from cows that have never been treated with the synthetic hormone rBGH, but only 30% is pasture-raised, due to limited supply. To get to 100%, the chain plans to build its own dairy cooperative.

PORK
Every time two Chipotle restaurants open, another farmer whose pigs are naturally raised can join the Niman Ranch network and become a supplier to the chain.

By Danielle Sacks
Photograph by Todd McLellan