Chipotle, purveyor of burritos, tacos, guac, fries and a variety of other dishes, wants to add an elusive item to its menu: dessert.
The company has been trying to provide a dessert option for years. In 2017, he tested buñuelos, a crispy cinnamon dessert with chocolate sauce. The following year, Chipotle introduced a Mexican Chocolate Shake in its test kitchen in New York. The channel also considered churros as an option. But so far, nothing has changed.
“We continue to work hard to try to come up with a dessert proposition” or other “additional” items such as queso or guacamole, CEO Brian Niccol said during a call with analysts Wednesday discussing the results of the first quarter of the chain.
New menu items are an important tool for restaurant chains, which use them to attract customers to stores and help build buzz around their brands. Chipotle typically launches two to three new menu items each year.
“We are constantly exploring new menu innovations, and dessert is one area where we see opportunity,” Chris Brandt, the company’s chief marketing officer, said in an emailed statement.
“A few items have been tested in this category over the past few years, however, we are not yet ready to push anything through the official front door process,” he added, making reference to Chipotle’s official testing process.
Get new menu items correctly
Add-ons in particular are a great way to increase the average check size, as customers receiving a lunch or dinner entrée may decide to add a side dish like queso or guacamole.
But it hasn’t always been easy for Chipotle to get those things right. When the brand launched the queso in 2017, the cheese dip received poor reviews, with customers complaining that the texture was “grainy” and the flavor “like crayons.” The company changed the recipe shortly after the initial launch and rolled out another version in 2020.
Lately, the channel has had better luck with new articles.
Last month, Chipotle launched pollo asado nationwide for a limited time. The grilled chicken option marked the chain’s first chicken recipe innovation in its history. “The reaction has been outstanding,” Niccol said on the call. He added that Chipotle’s second quarter got off to a good start thanks to pollo asado, which is “our most popular new protein yet.”
The company’s rewards program, which has nearly 28 million members, can help the chain understand how menu items resonate with customers, Chipotle CTO Curt Garner told CNN Business.
“We have a challenge going on right now in our rewards program where we’re giving people extra reward points for… trying all of our proteins,” he said. “We then lean in and understand – did their behaviors change after trying the different proteins?” This idea helps inform the company’s thinking about what kind of menu items might appeal to customers, he said.
Moreover, the app helps in publicizing new items as well as existing ones which might attract some customers.
Higher prices, better staffing
Even without dessert or other new additions, Chipotle’s sales are growing. In the three months ended March 31, sales at restaurants open for at least 13 months jumped 9% and total revenue rose 16% to $2 billion. Chipotle’s stock jumped about 5% before the market opened on Wednesday.
Chipotle raised prices by about 4% at the end of the first quarter, after significantly increasing them last year. So far, customers aren’t too worried. “We’ve seen…very little pricing resistance,” Niccol said.
Higher prices help the company cover rising costs, such as more expensive avocados, tortillas and dairy products. They also compensate for higher wages. Last year, the company announced it was raising the wages of its restaurant workers to an average of $15 an hour. In addition to the salary increase, Chipotle is emphasizing to employees that they will have the opportunity to move up the corporate ladder.
The tactic paid off. “Chipotle’s staffing levels are better today than they were in 2019,” Niccol said. The company is also experimenting with automating its kitchens to speed up service and allow workers to spend more time on higher-priority tasks.
– Jordan Valinsky of CNN Business contributed to this report.
™ & © 2022 Cable News Network, Inc., a WarnerMedia company. All rights reserved.