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Just six years into his tenure as CEO of Chipotle, Inc. (CMG), Brian Nicol is still fully committed to his job.
In his head is a robot that cuts, cores, and peels avocados. Commencement speech at his alma mater. And how many restaurants will he open in the next few years?
This was a CEO's day that went a little under the radar in the press, but also went unnoticed by the investor base. The company announced a 50-for-1 stock split this week, making its shares more accessible as the stock trades near all-time highs.
“I think Chipotle will achieve what we set out in our vision statement, and now we're making it a reality. So the next few years are going to be a lot of fun,” Nicol told Yahoo. told Finance.
The last few decades have been fun for Nicole, who started her career in the branding department of Procter & Gamble (PG) in the mid-1990s. Then, one of his first assignments fresh out of college was at P&G Scope, where he broke new ground by working on his mouthwash account and sending animated kisses via email. It has been reported.
Fast forward to now, and Nicole was leading marketing at Yum! The brand (YUM) owns Pizza Hut and Taco Bell, where it created Taco Bell's famous “Live Más” branding. He then became his CEO, his last role before taking the Chipotle job.
The soft-spoken fast food veteran took over as Chipotle's CEO on March 5, 2018, with two strategic responsibilities. First, it will stabilize businesses that have been financially hit by the E. coli outbreak. The second is to reboot the brand amidst the transition to digital ordering.
Then, another priority when the COVID-19 pandemic hit was continuing Chipotle's long-standing hallmark of employee reskilling and promoting from within.
Since then, Nicole has started checking all the boxes. He introduced new menu items such as cauliflower rice and quesadillas, and tested a robot that makes tortillas and chips for him. He expanded Chipotle's footprint to his 3,400 locations (including entering Canada), up from 2,400 locations when he was hired.
The chain could open more than 7,000 restaurants in the U.S. over the next 10 years, Nicol said, and is aiming for a record of 285 to 315 new openings in 2024.
Chipotle stock has soared 556% since Nicol was announced as CEO, compared to 89% for the S&P 500 and 79% for McDonald's (MCD), according to Yahoo Finance data. There is.
To put this into further perspective, Apple (AAPL) stock is up 275% during this period, while Amazon (AMZN) is up about 119%.
“Chipotle remains a premium brand with strong value and digital capabilities, and as recent traffic trends demonstrate, “We are in a better position than other brands.”
The following conversation with Nicole has been condensed for length and clarity.
Brian Sozzi: Despite the recent period of fast food inflation, people still seem to have a fondness for the Chipotle brand. why?
Brian Nicol: Our mission is “Food with Honesty.” What does that mean? Well, it means clean food. It means food that has been grown the right way. It means food that is cooked and prepared the right way.
[Customers will] We talk about burritos and how big the bowls we make, but when it comes down to it, it's about honest food and [cooking] That's actually happening in our restaurants. The fact that it's all fresh food, cooked right in front of you, people are interested in it, and you can make it highly customizable and do it very fast is just a meaningful bonus point.
Sozzi: It's a perfect size, come on.
Nicole: Well, Brian, I think you're spot on. There's so much value in customizing your bowl or burrito to be served the way you want it. If you would like double meat, we will do so. If you would like a little more rice, we will add more. At the end of the day, no matter what you want to eat, you can ultimately feel good about what you put into your body. And I think that's very important for all generations and all income groups.
Sozzi: How will AI and new automation technology change the future of Chipotle? A new report from JPMorgan says it's testing a camera to help you accurately measure portion sizes. Ta. Please tell us more.
Nicole: I definitely think there's a future where we can provide people with more accurate and consistent portion sizes, whether it's on the side or in a bowl. And I think the reality is between vision, technology, and AI that we can become more accurate without sacrificing speed. That's what I'm most excited about.
Sozzi: Is this the year your restaurant tests new vision technology to improve ordering accuracy?
Nicole: It hasn't happened yet, but I'm optimistic that this year will be the year we do at least one or two of these things in our restaurants.And what I'm really looking forward to is the next generation. [of this technology] We are already working on it.
And when you involve crew members, you're under the pressure of hundreds of transactions, and you really learn a lot.I think so in our Autocado too [avocado peeling robots]We've already completed our third or fourth prototype and are ready to go to restaurants. I'm sure that once we implement this in our restaurant, we'll learn something that we may need to repeat again.
Part of this process also requires allowing for failure.chippy [tortilla chip-making robot] It didn't go the way we expected. Chippy has greatly improved my work with Autocado. I am committed to being a learning organization.
Sozzi: What went wrong testing the Chippy robot?
Nicole: The biggest challenge was cleaning. It became very tedious for the team to clean it. We took that learning and put it into his Autocado. Much earlier in the design, you should consider what your crew will need to clean this.
Sozzi: It feels like the lines at Chipotle restaurants are finally getting faster. why?
Nicole: [It] We're about to go back to executing based on Chipotle standards. We needed to completely shake off some of the behaviors that were created during the labor shortage caused by the coronavirus. We dealt with very difficult situations where we had to close the restaurant early, run out of food, and be short staffed.
And all of that is behind us now. We are currently staffed and trained for deployment, and our team is more stable than it has been in years.
Sozzi: There aren't many restaurant chains opening 300 locations this year like you do. How many Chipotles will be open around the world in 10 years?
Nicole: Well, we've said publicly that we want to get to at least 7,000. The good news is that we don't see a slowdown in new unit economics as restaurants continue to open. This makes us increasingly convinced that 7,000 may be too conservative.
And I'm just talking about the United States. So Canada is doing well, regions in the United States are doing well, we're still in the early stages in Europe, and we're going to start exploring how this brand can work and travel outside of the United States. But it's still early days.
Sozzi: Can Chipotle work in China?
Nicole: That's a great question. I don't know the answer to that yet. My instincts say so. But there's a long way to go to prove it… The good news is that American business is growing in a very special way, giving us the opportunity to go to different parts of the world to learn. about it.
Sozzi: Chipotle continues to focus on promoting internal talent to higher-level positions and offering benefits such as college support to strengthen its culture. How much do you think about culture every day?
Nicole: That's very important. People want to be part of a winning culture, a caring culture, a growing culture. And one of my key jobs is how do we make sure we have the right leaders to chain that culture together?
Sozzi: How do you stay insightful as a leader?
Nicole: I'm always thinking about what I can learn next. I'm still very curious. I like what I do. That gives me energy. And it's fun to be a part of growing something. The idea that we have a lot of opportunities to grow, and the fact that I still consider myself young, I personally still have a lot of things that I think I can influence and develop myself. there is.
Sozzi: So, where do you see yourself in 10 years? As you said, you are still young.
Nicole: The funny thing is, I have three children, and the youngest is still in middle school. Of course we want Chipotle to accomplish everything we set out to do. But I also know that it's important to me and my wife, Jen, to see our children become good people. And I hope the same will happen for our children, hopefully over the next 10 years. I want to see them grow into brave young men. And at the same time, I think Chipotle will accomplish what we set out in our vision statement. [them] reality.
Sozzi: I heard that you will give a commencement speech at your alma mater, the University of Miami, in May. What is your message to those graduating?
Nicole: It's interesting, I'm working on it now. People who are passionate about getting things done naturally get things done. And then something unexpected happens. Unexpected doors open and unexpected opportunities open up. And when you go through things with an “I’ll get through it” attitude, something happens.
Not everything will go your way, so you need to do it with great integrity and resilience. I think where we live is one of the best places in the world to make the most of it. So I think the biggest thing for people to remember is to not be afraid to be a doer.
Brian Sozzi I'm the executive editor of Yahoo Finance. Follow Sozzi on Twitter/X @BrianSozzi And even more linkedin. Have a tip about a deal, merger, activist situation, or more? Email brian.sozzi@yahoofinance.com.
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