Chipotle CEO talks state of the consumer, social media, labor shortage, and stores unionizing

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Brian nichol is the chairman and ceo of chipotle he runs 2 700 restaurants in north america in europe nicholas instilled a culture at chipotle of serving food that is both fresh and raised responsibly under his leadership chapali has posted record sales and profits despite increased food and labor costs nickel plans to keep the growth story going by opening more

Restaurants and using new technology to drive sales oh yeah and to keep that guacamole flowing i’m here at chipotle see o’brien nickel and yahoo finds his brooke de palma brian good to see you here thanks for joining us look we uh we’ve been talking all day long about how the economy isn’t isn’t doing great you have stocks in the tank yet you have guys like me

Spending up to buy double meat uh bowls from a chipotle how do you explain all this well you know look i think what we’ve really focused on is making sure that in challenging times and in good times uh we ensure we’ve got great culinary uh we’ve got our teams trained and ready to give people exactly what they want at the speed of which they want it and hopefully

That’s why guys like you keep coming back for the double meat so uh i’m glad to hear that brian is it just that your consumer is better off financially you just focus on on a higher income consumer and right now by and large they’re okay they have the money to go out there and shop and shop at chipotle yeah look our brand is positioned in a really great spot

Obviously as you mentioned we have some higher household income on average in our customers we also skew younger um but you know we serve pretty much always income groups and you know i don’t love to see some of the lower income groups um being impacted the way they have but uh we’re fortunate that we’re positioned the way we are with our commitment to food with

Integrity uh and frankly i think the job that the brand has done to position itself in the space of being you know an elevated food experience so we get people trading down um and i think we also get people trading up um and just in a really unique position so you know we’re pretty fortunate no doubt about it speaking of that younger consumer and piper sandler’s

Fall 2022 teen survey chipotle was voted number three it’s also the most preferred hispanic cuisine level for across upper income and average income teens there you’re also making headway on be real on tick tock you have two million followers how exactly are you viewing these social media apps as an asset to chipotle and really engaging with that gen z community

Yeah look you know i we we talk about this all the time here we want to be a brand that’s visible we want to be a brand that’s leading culture and then also in culture and you know social media uh you know applications like be real are part of that that’s something that has just really taken off lately uh my understanding is we’ve maxed out all our followers we

Have to continue to figure out how we evolved that platform but you know it’s really important for us to show up in the places where people want to experience our brand and then do it in a way where it makes sense for us to show up and you know we’re very fortunate to have i think one of the best groups of leaders running our social media efforts our digital efforts

And just really researching where young people are headed so that hopefully sometimes we’re ahead of them and then other times they lead us to where we need to be another place that people can experience your uh chipotle experience is on roblox that’s another uh interesting foray for fast food we see the others get into the game as well so my question here is what

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Exactly is the opportunity that you’re seeing in the overall metaverse there you know it’s hard to like put it into dollars and actual sales it’s much more to do with brand relevance and i think being visible uh and then playing a role in people’s every day you know people make their meal decisions or their food decisions every day multiple times a day and i think

It’s important for them to understand what our brand stands for which is this idea of food with integrity great culinary you know we’re going to do the right things uh for our people our food and then our customers and if they’re able to pick that up through programs like roblox to you know be real uh that’s hugely important to us and then look we’re going to always

Experiment um and that’s partly what we’re doing with roblox this is more about experimenting so that we can understand where potentially future sales may come from and at a minimum right now it’s definitely the right place to be to communicate with young people brian before you came on i talked to target ceo uh brian carnelly he told me he’s confident that they

Will be able to find 100 1000 workers for this holiday season i was just blown away given the labor shortage talk to us about your hiring plans right now are you able to find the workers you need to support not only the restaurants you do have open but also the met the hundreds of locations you plan to open this year yeah look that’s a great question brian and uh

I fully believe our you know opportunity to join our company and grow with our company and what we stand for will attract the right employees you know we will open well over 200 restaurants this year and obviously we got to staff that with new people and then we also get to promote people into these roles and you know i think as people understand ninety percent

Of our promotions come from within we have industry leading benefits both wages and those benefits that surround you whether it’s health care mental health you know debt-free degrees uh we find that we’re able to attract a huge amount of people and then the key piece for us is developing them training them so that then they become future leaders as we grow this

Company but um you know look i’m 100 confident we will get these restaurants staffed uh also 100 confident that our leaders in our restaurant will take the time to develop our crew so that they ultimately become general managers our general managers become field leaders and you know you can see how this cascades into just bigger and bigger jobs so people are able

To grow their career with chipotle as well as move forward our purpose of cultivating a better world so we’ll get it done and brian on the employee front it seems like this is the year of unionization for restaurants and only at chipotle but of course others in the fast food industry this past late august one location in michigan did choose to unionize i’m just

Curious if you provide an update on the stance of chipotle on unionization yeah look i was disappointed to see that happen um you know i really don’t think we need a third party uh to get between our restaurant teams and our company um we do a better job of communicating directly with our employees on what it takes to be successful at our company what it takes

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To have a great work environment and what it takes to provide a great customer experience so um i was disappointing to see it obviously we’ll go through the process that we need to um but you know i really don’t see a need for it and uh you know hopefully going forward um you know we’ll continue to be able to communicate directly with our employees and grow our

Employees with that direct communication brian staying on on employees uh if i’m correct fifteen percent of your locations are in california there might be law changes that are coming up now that push up that minimum wage to 21 from 15 or so how would that impact the chipotle well you know look we already pay well beyond 15 an hour in california so the fact that

Um you know there is legislation out there that has the potential to take the hourly up to i believe it’s 21 22 dollars an hour um you know that’s going to put organizations like ours in a place where we’ll probably have to raise prices and uh you know it’s unfortunate because it also impacts the economic model that could impact how many restaurants we even open

In the future in a state like california which is a real shame because our brand is loved in california our employees love working at chipotle in california and i know the customers love getting our food so you know hopefully the legislation doesn’t get in the way of you know great economics that results in great opportunities for employees and customers but if it

Does you know we’ll deal with it accordingly but it’d be a real shame and in california at eight restaurants you’re also testing new kitchen management system software that will help to monitor cooking times and ultimately tell employees or crew members rather when exactly something is ready i’m curious about how exactly these robots like this kitchen management

System but also a robot especially like chip be really comes together with your crew members and how you ultimately see that spreading to ultimate other locations rather yeah look this is something that uh we started down the path a couple years ago because we asked our employees say look what are the tasks that either trip you up or you know you find very hard

To get done or frankly when people join our company they say look i don’t really love doing that work and they’re kind of figuring out how they can just be done with doing that work so some things we got feedback on were hey it’s really tricky to know how much chicken to cook throughout the day because we get rushes we get slow spots then we get fast spots again

So this is really taking you know artificial intelligence and understanding real time how fast are you going through the chicken how fast are you going through the guacamole how many you know pieces of chicken do you go put on the grill now because based on what we expect happening at dinner time this is what you need to cook and so it takes a lot of the guesswork

Out of it for the employee and then it does it real time so that they can be people you know our crew doesn’t want to be out of anything right because it’s a disappointing situation for the customer and then the crew doesn’t feel like they’re doing a great job so this is really a tool that will help them be more ready for the rush and then if the rush exceeds what

Their expectations were it informs them so that then they’re prepared for the rest of their day so they continue to have a great day you know products like our chips uh our customers always want us to be in uh on the menu with our chips and so what chippy does is it helps us fry chips all day right versus right now we fry them at some points in the day and then we

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Sell through and then it’s like oh we’re running out now we gotta go fry chips again and you know look that’s a tough job too to be working on the fryer um and so we got the feedback that hey look if you could automate this for me that would be a huge win um and so there’s other areas that we’re working on as well you know we want to automate our digital make line

Uh we’re partnering with a company called hyphen and we’re really optimistic that we’re going to be able to made a lot more of that so that our team members and crew are able to just focus more on the front line with the in-store hospitality and then hopefully the combination of robotics artificial intelligence can take care of those digital orders so that they’re

Accurate on time and uh we just give people great experiences whether it’s online or inline in our restaurants brian two fun ones before before we let you go here help the auto finance community know who brian nichol is first how’d you go from from i think i’ve got this a summer intern at p g working on the scope mouthwash account to being the ceo of chipotle well

You know look uh it’s one of those things that you never really know where your journey’s gonna go but uh i was very fortunate uh to get my first job at procter gamble i got to work with a lot of great people uh they took the time uh to invest in me so that i became i think much better at marketing and general management skills and i’ve taken that with me um down

The road and you know here i am at chipotle one thing i did discover while i was at p g i had the opportunity to work on pringles is i loved working in the space of food and you know it just resonated with me and uh you know so fast forward here we are today um you know i still strongly encourage you to use scope mouthwash but obviously i’m a much bigger fan of

Guacamole and burritos these days i almost don’t know where to go with that but let’s end on this too so also tell you i also tell the y’all finds community you were the guy when you are a taco bell you create the live moss campaign when you came up with that did you know that that would be the home run that has become they still use this brian hope you’re getting

Royalty checks well you know look that was that was another example of having the opportunity to work on a great brand with great people and uh you know we came up with what i believe was a very timeless um you know concept around the idea of lib moss and uh it’s great to see uh they continue to use it and uh i continue to see that they’re having success so you

Know it’s always fun to see places where you’ve been continue to have success with programs that you had the opportunity to work on so very true but we’ll keep up the successful days over at chipotle chipotle see o’brien nickel good to see you and uh thanks for joining us as well y’all finds is brooke de palma

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Chipotle CEO talks state of the consumer, social media, labor shortage, and stores unionizing By Yahoo Finance