Chipotle (CMG) has been spending more on avocados, meat and cheese as it weans itself off genetically-modified fare. But in spite of those costs —and possibly because of them—its line of customers just keeps getting longer.
Thanks to a surge in traffic, the chain of Mexican restaurants said profit in the recent quarter jumped 30 percent. Sales at restaurants open more than a year were up 9.3 percent; overall sales surged 21 percent compared to the same period a year ago. The average Chipotle outlet brought in an extra $622 a day in the last three months of the year, compared with the same period in 2012—that’s somewhere around 80 extra burritos a day.
The company opened almost 200 stores in 2013, but the same-store sales growth is stunning. The most obvious difference in the company’s approach was its vow in March to eliminate genetically engineered ingredients, a pledge that it crowed about in some bold (and probably quite expensive) marketing campaigns. Most notably, Chipotle released in September a short animated film called “The Scarecrow,” which took aim at overly processed fast-food. To date, the film has been streamed on YouTube almost 12 million times, including 450,000 clicks on its first day.
On Feb. 17, Chipotle will carry forward its critique of “industrial agriculture” with a four-part comedy series on Hulu dubbed “Farmed and Dangerous.”
In a conference call this evening, founder and co-CEO Steve Ells noted that raising animals with antibiotics and vegetables with gene-therapy are complex endeavors. “That’s why we create marketing designed to make people more curious about these issues,” he said. “We believe the more curious they become and the more they learn, the more likely they’ll come to Chipotle.”
Plenty of people will take issue with that, but Chipotle shareholders won’t be among them.
