Chipotle wants a more natural supply chain

Chipotle Mexican Grill is a fast-growing chain of 1,500 restaurants, started in 1993 in Denver by Steve Ells. In its first decade, Chipotle created an entirely new concept – not fast food, and not casual dining but a mash-up known as “fast casual”. For the past decade, while the company has continued a rapid growth trajectory it has also tried to create a sustainable supply chain

Chipotle’s quest to have an “all-natural” supply chain started with Ells’s collaboration with natural pork producer Niman Ranch.

“Niman Ranch is an idyllic image of farming in America – big pastures and red barns,” says Chipotle spokesman Chris Arnold. “Unfortunately that’s not how most pigs [elsewhere] are raised – 95% are in confinement. [Ells] didn’t want his success tied to so exploitive a model.”

Ells’s epiphany moved Chipotle from branding its food as simply fresh – ie using nothing processed or frozen – to branding it as “natural”. The term has had plenty of greenwashing around it, and so Chipotle was careful to define “natural” meats as – at a minimum – those from animals raised without the use of antibiotics or added hormones.

“We knew it was going to be challenging but it was an easy transition for pork, and then we started with chicken, went on to organic beans and started chipping away at local produce,” says Arnold. A network of produce farms is key to the local produce goal, and Chipotle has said it would prefer there to be more mid-sized farms in the US and that they were less threatened by industrial agricultural consolidation.

Beef has, however, proved to be the most challenging item in the supply chain to source naturally. Chipotle’s beef protocol calls for cattle to be raised using high standards of animal husbandry and without the use of antibiotics. But it took the company a decade of effort to get to a point where it was able to serve naturally raised beef. 

And sourcing the amount of beef at the standards the company requires is a big challenge, Arnold says. “The beef supply – and even more so when naturally raised – is constrained. It’s challenging to get what we need this year.”

Chipotle is trying to find new cuts of steak to use in restaurants to stretch resources further. But “fast casual” dictates, unsurprisingly, a need for fast service, and the company hasn’t yet found a perfect flavour and quality cut that will cook consistently in the same amount of time as the cuts served currently.

Arnold says the challenge facing Chipotle – using 60m kilograms of meat annually – makes the much larger supply required to satisfy McDonald’s goal for sustainable beef seem overwhelming.

But perhaps there may be synergies in partnering in future with the fast-food king. McDonald’s was once a major investor in Chipotle though the companies parted ways in 2006.

“Our aim is to use our purchasing power to drive change and hoping our success will motivate others,” Arnold says. “And we do see that. At [restaurant chain] Panera, for example, they have moved to natural chicken. Well, Panera uses the breast and we use thigh and leg meat. There’s a possibility for a complementary relationship there.”

This case study is featured in the recent 12-page CSR in North America briefing. You can purchase this 12-page briefing in electronic format for just $250. Contact Liam Dowd for more information.

Chipotle  Farm animal welfare  Food  meat  North America briefing  North America case study  supply chains 

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