Learning Business From Burgers

This Foodie Friday brings news that the folks at Chipotle are doubling down. As you’re probably aware unless you’ve been under a rock for the last few months, Chipotle has had some serious issues with E.coli outbreaks in a number of their stores across the country. I wrote about this problem a few months back so we won’t review the details here. Suffice it to say that it has been a disaster for the chain and sales have plummeted.

Español: Restaurant Chipottle Mexican Grill in...

(Photo credit: Wikipedia)

In the wake of that, the chain has decided to open another chain. This one will serve burgers and has launched the first outlet in Ohio, calling it Tasty Made. It will serve the same sort of fare as McDonalds, Burger King, and any number of other chains: burgers, fries, and shakes. They intend, however, to put the Chipotle spin on them, as explained in this article:

The company said the new restaurant chain will use “high-quality ingredients that are grown and raised with respect for the animals, the land, and the farmers who produce them.” The company said the new restaurant chain will use “high-quality ingredients that are grown and raised with respect for the animals, the land, and the farmers who produce them.”

That’s the same philosophy as the main Chipotle chain and it had been serving them well until the bacteria breakout hit. Now one could rightly wonder why they’d be thinking about a couple of things. First, why burgers? It would seem as if the field is pretty well saturated and there is even a high-end competitor – Shake Shack – that seems to be in the space already. Second, why now?

I often remind clients that eBay wasn’t the first online auction site, Amazon wasn’t the first online retailer, and that the iPod wasn’t the first mp3 player. They just did things better. We’ve all heard the line about building a better mousetrap and that’s what Chipotle did in their original incarnation. There isn’t anything wrong with their model although obviously, the recent execution leaves quite a bit to be desired. None of us should be afraid to get into a crowded space if, and only if, we really do have a product that is obviously better to the consumer.

Why now? Why not. Their model works and they need to do something to jump start revenues since the flagship brand isn’t recovering quickly. They have other infrastructure already in place for marketing, real estate, systems, and distribution. In fact, they have a couple of other ideas (pizza!) in the works as well. I’ve found that if we wait until conditions are perfect, we’ll generally be waiting a long time.

Our love of a good burger isn’t going anywhere. Let’s see if Tasty Made does. No matter what, it’s will be interesting to learn from them.

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