History of Chipotle from 1993-2024– Pioneering Fast-Casual Dining

Having pioneered the fast-casual dining model, Chipotle is acknowledged as a leader and innovator in the restaurant industry. For business owners, marketers and anyone looking to learn from successful business stories, the history of Chipotle provides insights into disrupting an industry and and building a powerful brand.

At Business2Community, we’ve consulted a wide range of sources to provide a detailed account of Chipotle’s journey from a novel concept to a leading fast-casual brand in the restaurant industry. Read on to discover Chipotle’s key milestones, controversies, and more.

Chipotle’s Topline Data

Date Founded: July 1993
Founded By: Steve Ells
Current CEO: Brian Niccol
Industries: Fast food
Chipotle Net Worth: $69.08 billion
Chipotle Stock Ticker: NYSE: CMG
Dividend Yield: 0%

Who Owns Chipotle?

As a public company, Chipotle is owned by various shareholders. As of 2024, the Vanguard Group held the largest stake, owning 10.04% of the company’s shares. This was closely followed by the Vanguard Fiduciary Trust Co., with a 9.95% stake.

The Chipotle Mexican Grill was born when Steve Ells was inspired to reinvent traditional Mexican food. Ells borrowed $85,000 from his father to realize his mission and opened the very first restaurant in 1993. Two years later, Steve’s father invested another $1.5 million, and in 1996, the company raised $1.8 million in Chipotle’s only private offering.

In 1998, Chipotle secured a $50 million initial minority investment, followed by more significant funding from McDonald’s. By the time Chipotle went public in 2006, the fast-food giant had invested $360 million into Chipotle.

In October of that year, McDonald’s fully divested from Chipotle. Eight years later in 2006, Chipotle was valued at over $20 billion.

By July 2024, Chipotle had a market cap of $69.08 billion, making it the second-largest restaurant chain in the world behind McDonald’s.

Who is the Chipotle CEO?

The CEO of Chipotle is Brian Niccol, who has held the role since March 2018.

During his tenure, the former Taco Bell CEO has focused on:

• Delivering operational excellence
• Increasing brand equity
• Expanding restaurants
• Growing digital access
• Fostering innovation

As a result, Chipotle has achieved accelerated sales and location growth.

In 2024, disgruntled customers took to various social media platforms to complain about Chipotle’s shrinking portion sizes. However, Chipotle CEO Niccol denied that portion sizes were getting smaller and made light of the situation by saying that customers who wanted more simply needed to give workers “a secret look”.

In response, customers encouraged others to “walk out” or boycott the chain altogether. Others endorsed the “Chipotle phone method,” or recording Chipotle employees to ensure bigger portions.

On July 24, 2024, Chipotle’s CEO changed his tune. This came as both independent and internal investigations revealed significant discrepancies between portion sizes across its locations. Niccol reiterated that there was never a directive to provide smaller portions to customers and that getting feedback had allowed the company to relook at execution across its entire system.

The CEO also promised that those locations would be retrained to the right standards and that generous portions would be more consistent across all its restaurants.

Growth and Development of Chipotle

Chipotle is a fast-casual restaurant that serves Mexican food made with responsibly sourced, wholesome ingredients free of artificial colors, flavors, and preservatives.

The restaurant chain was ranked on the Fortune 500 and recognized as one of the Most Admired Companies of 2024. Below, we track over 30 years of Chipotle’s history.

1993-1997: Chipotle’s Journey Begins

Chipotle was founded by Steve Ells in 1993. The first Chipotle was a remodeled ice cream store across from the University of Denver campus.

There, founder and CEO Steve Ells, a graduate of the Culinary Institute of America, put a healthy spin on the Mexican food he saw while working as a line cook for Jeremiah Tower at Stars in San Francisco.

Ells intended to use the first Chipotle as a low-risk investment to fund his dream of a fine dining restaurant, but Chipotle’s innovative concept took off. Within the first month, Chipotle started averaging sales of over 1,000 burritos per day, well beyond the 107 burritos his father calculated as their break-even point.

Ells delayed his plan to open a fine dining restaurant and used the profits from the first Chipotle to fund a second location. In 1995, the second store opened and later that year, Chipotle opened a third location.

By the end of 1997, Chipotle had grown from a single location to 14 stores. Realizing that the restaurant chain would need more funding to take its growth to the next level, Ells drew up a business plan and sought external investment.

1998-2006: Chipotle Partners with McDonald’s

In 1998, McDonald’s became Chipotle’s largest investor, even though the two brands had different values and business models.

For example, while McDonald’s emphasized cost efficiency, Chipotle prioritized high-quality ingredients, driving food costs to levels comparable to upscale restaurants (30-32%). This starkly contrasted with McDonald’s costs of 29% for both food and packaging.

Nonetheless, the partnership proved successful, giving the budding burrito chain cash, access to an established supply chain, and industry know-how.

Leveraging McDonald’s investment, Chipotle grew to 500 locations in 22 states between 1998 and 2006. In January 2006, Chipotle went public, increasing its share price twice due to high pre-IPO demand.

On its first day as a public company, the share price surged by 100%, resulting in the best US-based IPO in six years, and the second-best IPO for a restaurant after Boston Market. In October 2006, McDonald’s fully divested from Chipotle, earning $1.5 billion from the move.

This was part of McDonald’s larger initiative to focus on the main McDonald’s chain by letting go of its non-core business restaurants such as Chipotle, Donatos Pizza, and ​Boston Market.

2007-2010: Chipotle Embarks on Rapid Expansion

2007 saw Chipotle continue to serve more organically and locally sourced foods including naturally raised meat, with over:

• 85% of its restaurants serving naturally raised chicken.
• 55% serving naturally raised beef.
• 99% serving naturally raised pork.

Additionally, Chipotle became the first national restaurant company to be 100% rBGH-free.

That same year, Chipotle achieved its 10th consecutive year of double-digit comparable restaurant sales growth and added 125 new restaurants, bringing its new total up to 704 restaurants in 34 states.

In 2008, the company restructured its executive team, promoting Chief Operating Officer Monty Moran to be co-CEO alongside Ells. Combining Moran’s operational experience and Ells’ entrepreneurial spirit helped strengthen Chipotle during and after the recession.

While the economic conditions in 2008 made business challenging for restaurant companies, Chipotle increased its revenue by 22.7% to $1.3 billion.

In addition, Chipotle opened its first location outside of the US in Toronto, Canada.

By 2010, Chipotle had over 25,000 employees and employee turnover rates lower than the typical 200% industry average. This was credited to Chipotle’s great benefits and its emphasis on career development. Unlike most fast-food businesses, crew members could grow into service and eventually restaurant managers.

2011-2015: Chipotle Suffers a Food Safety Blow

In the early 2010s, Chipotle diversified its operations through subsidiaries like Soul Daddy, ShopHouse Southeast Asian Kitchen, Pizzeria Locale, and Tasty Made.

By the end of 2012, Chipotle had more than 1,300 restaurants, including its first location in France. In 2013, Chipotle instituted a no-GMO policy for its ingredients. The move, considered risky for a US restaurant chain, reflected the brand’s commitment to “Food with Integrity”. Chipotle also ventured into Germany, opening its first location there in August 2013.

Chipotle decided to serve breakfast options at selected airport locations in 2014 to test the viability of a breakfast menu. But, due to a lack of customer interest, the concept was scrapped.

That year, the restaurant chain continued its upward trajectory, growing to nearly 1,800 locations and generating an impressive $4.1 billion in revenue.

By 2015, Chipotle had 17 thriving locations outside of the US and close to 1,800 restaurants in its portfolio. Throughout the year, the Centers for Disease Control and Prevention (CDC) linked Chipotle to an E. coli outbreak that affected hundreds of customers in multiple states.

The company was also implicated in Norovirus outbreaks that made over 200 customers sick. In an attempt to identify the source of the E. coli and do deep cleaning, 43 restaurants were shut down.

The outbreak scandal, which saw almost 500 people across the US fall ill, caused the burrito chain’s stocks to tumble to less than half their value. To restore consumer trust, Chipotle announced a comprehensive food safety program.

2016-2020: Chipotle Plots a Recovery Plan

Due to food safety concerns, Chipotle’s profits declined sharply in 2016, dropping from $476 million to $23 million. This came as the company invested in marketing to restore its damaged image and in 240 new locations to strengthen its market share.

As part of its recovery plan for 2017, Chipotle:

• Prioritized its digital channels, allowing customers to order online from various third-party services.
• Added a dessert to its menu.
• Put an end to free burritos and heavy promo spending via its Chiptopia rewards program.

Unfortunately, in July 2017, Chipotle was rocked by another Norovirus outbreak. Despite over 130 people falling ill, Chipotle failed to acknowledge the incident or apologize to customers. This led to backlash surrounding its flawed food safety procedures and subsequently, the lackluster performance of its queso rollout.

To reestablish its leadership in sourcing and serving fresh food, Chipotle introduced its For Real marketing campaign in 2018. To mark a new era, Chipotle relocated its corporate headquarters to Newport Beach, Southern California. That year, revenue increased by 9% and Chipotle’s profits showed an encouraging upward trend from 2016 levels.

Recognizing customers’ desire for increased convenience, Chipotle launched drive-thru “Chipotlanes”. This allowed customers to place their orders on the Chipotle mobile app or website and pick them up in the Chipotlane, all without having to leave their cars.

2019 and 2020 saw Chipotle encounter numerous legal issues. In 2019, the City of New York sued the chain for violating the Fair Workweek Law requiring fast food companies to inform workers of their weekly schedules at least two weeks in advance.

Meanwhile, in 2020, Chipotle was fined $1.3 million for 13,253 child labor violations in over 50 restaurants. Following the shocking discovery that its bowls, long marketed as compostable, contained cancer-linked PFAS or “forever chemicals”, the company pledged to introduce new compostable bowls.

Adding to the company’s woes, Chipotle agreed to pay a record $25 million fine to resolve criminal charges related to foodborne illness outbreaks it caused between 2015 and 2018.

Later that year, workers in New York staged a protest against the fast-casual chain over “Black Lives Matter Hypocrisy”, revealing that while the company had pledged to donate $1 million to fight systemic racism, it was perpetuating racial injustices by cutting pay and mistreating its many Black and Latinx workers.

By the end of 2020, Chipotle had opened 161 new restaurants, relocated six, and closed nine. In the wake of the pandemic, digital sales grew 174% and accounted for over 46% of sales. Overall, despite a challenging year, total revenue increased by 7.1% to $6 billion.

2021-Present: Chipotle Makes a Comeback

2021 highlighted Chipotle’s resiliency and commitment to sustainability. In its annual sustainability report, the company reported that it had:

• Promoted almost 19,000 employees and that 90% of restaurant management roles were internal promotions.
• Diverted 2.6 million cubic yards of waste through recycling, composting, and waste-to-energy initiatives.
• Purchased over 35.7 million pounds of local produce worth over $40.2 million in support of local food systems in Chipotle’s communities.

Despite raising menu prices by 4% in June 2021, the company experienced an uptick in sales, pushing its total revenue to $7.5 billion, a 26% increase from 2020.

With Chipotlane locations achieving 15% higher sales than traditional stores, over 80% of new Chipotle restaurants opened in 2022 included Chipotlanes.

To drive up excitement and digital sales, Chipotle rolled out a new range of limited protein options throughout 2022. It also honored healthcare heroes by awarding 2,000 medical professionals with free Chipotle for a year, a gesture valued at over $1 million. This marked the largest single giveaway of “free Chipotle for a year” in the company’s history.

Following a viral TikTok trend started by creators Alexis Frost and Keith Lee, Chipotle added five new fajita quesadillas to its digital menu in February 2023.

In July 2023, Chipotle exited the highly competitive pizza restaurant industry by divesting its remaining Pizzeria Locale locations. These strategic efforts paid off, earning Chipotle the title of the leading restaurant in the US by sales in 2023. By the year’s end, the company had generated a record $9.9 billion in revenue and impressive profits of $1.2 billion.

Building on the previous year’s successes, the company brought back its Chicken al Pastor offering for a limited time across North America and Europe. The item was first introduced in March 2023 and became one of the chain’s most successful product launches, accounting for about 20% of transactions.

To meet its goal of 315 new restaurant openings in 2024, the company opened 46 new restaurants during the first quarter and 52 during the second. Additionally, over 80% of these new locations included a Chipotlane.

As of June 2024, Chipotle had over 120,000 employees and 3,500 Chipotle restaurants across the United States, Canada, the United Kingdom, France, Germany, and Kuwait.

How Much Does a Chipotle Franchise Cost?

While Chipotle does not currently offer a franchise model in the US, estimates put the cost of a Chipotle franchise anywhere between $1.2 million and $2.8 million.

In July 2024, Chipotle signed off on a landmark franchise deal with the Alshaya Group. By partnering with the Group, Chipotle plans to take its fast-casual brand to Dubai, Kuwait, and other parts of the Middle East.

Chipotle Dividend History

Following its 2006 IPO, Chipotle shares began trading at $42 on the NYSE under the ticker symbol CMG. Chipotle’s stock price increased by an average of 29% between 2006, eventually hitting a high of $758.61 in August 2015.

In March 2024, Chipotle announced a 50-for-1 stock split. This marked Chipotle’s first-ever stock split, and one of the biggest stock splits in the history of the New York Stock Exchange.

Chipotle’s share price peaked at $3,427.61 before the split took effect on June 27, 2024. The split reduced the company’s per-share price from around $3,128 to approximately $62 on a post-split basis.

Chipotle has never declared or paid dividends nor does the company intend to do so for the foreseeable future. Instead, Chipotle plans to retain its earnings to fund operations, expand its business, and repurchase shares.

History of the Chipotle Logo

Over the years, the Chipotle logo has changed to reflect the company’s evolving vision and mission.

1993-2009: The Wordmark Era

The first Chipotle logo was a simple black logo featuring the words “Chipotle” in a distinctive stylized font and “Mexican Grill.” in a smaller uppercase font.

2009- Present: The White Pepper Era

In 2009, Chipotle updated its branding, replacing the wordmark with a catchy red and black logo. This new logo featured a red circle inside a larger black circle. A white chipotle pepper was placed inside the red circle and within the black circle, the company’s name appeared in bold, uppercase white letters above and below the pepper.

Later that year, Chipotle introduced a brown variation of the logo, retaining the same design elements. The pepper’s design was modernized, the larger circle was changed to red and the smaller one brown. The entire design was also set against a brown instead of white background.

For greater branding flexibility, the company launched a simplified version of this logo. It featured a rounded brown square with the white pepper inside, positioned either above or to the left of a red rounded rectangle containing the company’s name in a white uppercase font.

The Future of Chipotle

Chipotle’s history highlights the power of innovation. By combining the speed and convenience of fast food with higher-quality ingredients and a more upscale dining experience, the company pioneered the concept of “fast casual” dining.

The fast-casual brand’s journey to dominance also reflects the importance of remaining committed to core values while continuously striving to meet consumer needs. By going against the grain and setting itself apart from other fast-food chains, Chipotle established a cult-like customer base and built a global restaurant empire.

However, Chipotle’s journey hasn’t been without challenges. The food safety scandals that knocked its reputation and profitability underscore the importance of balancing ambitious growth with strategies to ensure consistent standards and food quality.

Looking ahead, Chipotle plans to double its locations to 7,000 and increase annual sales per location to $4 million. Another crucial part of Chipotle’s long-term growth strategy is leveraging digital channels to increase its market share.

Lastly, as an industry leader in sustainability, the company plans to maximize energy efficiency and reduce its greenhouse gas emissions by 50% by 2030.

Overall, based on its history of innovation and market leadership, Chipotle is well-positioned to expand its footprint and secure its standing as a leading global restaurant chain.

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