chipotle pres final 03.17

THE COMPANY

Est. 1993Originator of “fast-casual” dining

No franchises“Food with Integrity” ie. Non-GMO, antibiotic-free, pasture-raised meat, and local produce.

THE ISSUE:

GOT SICK

THE BIGGER PICTURE:

WHY?

Chipotle’s entire BRAND STRATEGY is broken and tired.

It needs updates and innovation to re-engage and re-build trust with its target market.

BRAND STRATEGY

VISION

TARGET AUDIENCEBRAND PROMISEREASONS TO BELIEVEBRAND PERSONALITY

& KEY INSIGHTS

LIMITED MENU

E. Coli &

Norovirus

VALUE PROPOSITION

Fast-Casual Dining• Distinctive interior

design• Music• Fine dining features

Business Model Strong identity of the

brand First Mover Advantage Unique Supply chain Food is fresh quality Employees Salary No franchises

Supply chain High overhead costs Limited menu Broken brand promise

More Choices on the menu Build on their social media

presence Transparency Expansion Online Delivery

No Franchises Supply chain Criticism Competition – Market

capture

S W

O T

WHAT’S BEEN DONE?External professional restaurant cleaners $50M marketing budgetTransparency & honesty in mediaStaff food safety training day (all

restaurants closed)Free burrito couponsSocial media campaignTransparency in supply chainWebsite updates

WHAT’S MISSING?

We need to:

Increase sales growthContinue rebuilding trustRe-engage MillennialsMaintain competitive advantage in Fast-Casual industry

MARKET RESEARCH

When was the last time you ate at Chipotle?

Did Chipotle’s recent food safety issues change your desire to eat there or feeling about the brand?

Answered: 146 Skipped: 14 Answered: 157 Skipped: 3

Hey Millennials,How much do you care about where fast food restaurants source their ingredients?

70% want to be informed about cooking & food handling processes

“Untrustworthy”

“Disappointed”“Unhealthy”

“Love” “Yummmmmy!!!!!!”

“Delicious!”

“Friends”“Fresh”“Guacamole”

94% really care about where the ingredients came from

6% say ingredients don’t affect their choice

MILLENNIALS LIKE COMMUNITY

LOYALTY PROGRAM

Technology

(app/website/e-statements

)

Rewards identificat

ion

Process

Ongoing customer

justification

Liability of rewards currency

MILLENNIALS NEED TO BE CONNECTED

RESTAURANT UPDATES

Wi-fiCordless phone chargersiPads in line-up to watch the Trace Your Food video

MILLENNIALS ARE HEALTH-CONSCIOUS

But they’re also really into novelty desserts.

PALETAS MEXICANAS

HandcraftedPartnerships available to test the product

Dessert optionGood marginKids & Milliennials attentionHealthy & trendy

MILLENIALS CARE

FOLLOW YOUR FOOD VIDEO

Distribution:• YouTube• In-Store

MILLENNIALS LOVE GUACAMOLE

And the only thing they love more is talking about how it always costs extra.

GUACAMOLE ISN’T EXTRA HAPPY HOUR

Tues. 4-7pm, Guac isn’t extra. Beer & margaritas are $3.50 each

#ItsNotExtraDISTRIBUTION:

Social Media: #ItsNotExtra #GuacMoney EX: @ChipotleTweets: #ItsNotExtra Happy

Hour starts Wednesday! What will u do w ur extra #GuacMoney? TV/YouTube Ads

Quick videos of different people doing crazy things with the money they’ve saved from not paying extra for guacamole #GuacMoney

BUDGET BREAKDOWN

$50M in 2Q2016Advertise-

ments, 34%

Facilities update; 9%

Loyalty Program;

35%

Guac Free; 20%

Paletas; 2%

LOYALTY PROGRAM Costs: $17M

Benefits: Increase in revenue by

11% (industry average) Important source of data

RESTAURANT UPDATES Costs: $4.5M (sunk costs)

Benefits: Customer engagement &

retention Customer awareness of

“Food with Integrity”

PALETAS MEXICANAS Costs:$ 1 M Partnership$ 1.6 M Developing a new product Benefits:

Payback in 2 monthsEasy implementation

FOLLOW YOUR FOOD - VIDEO Costs: YouTube video production: $1M

Benefits: 40% growth in positive

brand perception

#ItsNotExtra

Benefits: Increased number of customers

Increased profits from beer & margarita sales

Cost: $9.75M

APPENDIX – LOYALTY PROGRAM BUDGET FORMULA

BUDGET TO START LOYALTY PROGRAMCOMPONENTS VALUES

Total Sales (Gross Sales) ($) $4,453,000,000.00 Capture Rate (%) 30%Percentage Reward (%) 1.5%Redemption Efficiency (%) 90%Margin on Reward (%) 30%Soft Benefits ($) $2,000,000.00 Admin & Software ($) $3,000,000.00 Loyalty Program (%) 0.40%Total Cost $17,624,255.00

APPENDIX – ASSUMPTIONS RESTAURANT UPDATES

APPENDIX – ASSUMPTIONS PALETA MEXICANA

APPENDIX – ASSUMPTIONS IT’S NOT EXTRA