CHIPOTLE: "Fresh & Delicious" Or "Sick & Tired"

Chipotle went from a food craze with rabid fans to a cautionary tale of mismanagement and sick customers. So, are they iconic or were they just timely? And will they survive? In this episode of Bizography we not only examine the story of founder Steve Ells, but the history of Mexican food in America and the two other iconic companies that laid the groundwork for Chipotle to come to life.

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Episode Transcript

Speaker 1 (00:00):
I think it's safe to say a brand has reached
icon status when it has overd locations around the world,
over seventy employees, and has fans that feel like this
little guy chive. But what if the same brand made
hundreds of people sick over a period of years, across

(00:22):
multiple locations and from different food born illnesses. Could they
retain iconic status. This is Phisiography, the show where we

(00:46):
dive into the strange but true stories of iconic companies.
Whether they're a current bright star, in the midst of
recovering from a massive case of food poisoning, or settling
into the compost heap of history, they all have a
past worth knowing. I'm Dana Barrett. I'm a former tech
executive and entrepreneur and a TV and radio host, and
over the course of my career, I've interviewed thousands of

(01:08):
business leaders and reported on the bright beginnings and massive
flame outs of the brands we know and love. Some
of their stories are inspiring, some make my tummy ache,
and some bring up more questions than they do answers.
Today we're talking about Chipotle, and I think it has
a bit of all of that. With me, as always
is my co host and producer, new guy Nick Bean

(01:30):
a k a. The beans Stir, who was born for
this episode. Yeah, I'm all about the beans. There's black beans,
there's pinto beans, there's refried beans. Okay, blah bla, Okay,
that'll do. I feel like this could totally be an
episode full of puns and like some of my growner

(01:50):
mom jokes. But let's just wait for it. Roll with it, um,
all right, Look, Nick, let's start with this when the
chappole like craze was in full swing. I'm going to say,
what about maybe more like ten years ago? Off? That's right?
Were you totally into it? No? I was not a
Chipotle head, but I will say I did definitely have

(02:11):
a lot of friends who were Were you crazy about Chipotle?
Did you know? I wasn't either. I really kind of
like some of the other slightly smaller chains better. I
was a big fan of mos and always have been.
And then we have a local chain here in Atlanta
called Willie's that I like, um, mostly because I think
the food is better, like not that it's better quality,
but that it tastes better. Like they have Salsa's that

(02:33):
I like better without so much like chunks in that
where they have you know, roasted red peppers to put
on stuff, and like Chipotle is much more limited, so
it is, Yes, some of the other places are a
little more flavorful. Yeah, at times, I guess. I also
always felt like when I started going to Chipotle, people
were already really into it, and so it was almost
like overhyped. You know, like when you go to a
movie and it's been overhyped and you're like, I don't

(02:55):
get it. Yeah, that's a good point too, because I agree.
I was one of those kind of late adopters as well.
When I went in, was like, really, this is what
you guys were all up about, okay. Yeah. And then
in fairness, the rabid fan thing, like I don't generally
get rabid fandom. Not gonna lie. I have never been
that kind of person. In fact, when people ask me
my favorite anything like what's your favorite color, what's your
favorite food, I kind of panic, who's your favorite producer?

(03:18):
Nick Bean? That was easy? Um? Sorry, sorry, I love
you too. Uh. In any case, when I started researching
the story of Chipotle, it took me off on a
lot of um, you know, internet bunny trails. So I
decided that we should do this episode like a bunch
of mini bisiographies all rolled into one tortilla, kind of

(03:39):
like a burrito within a burrito, or like a taco
in a taco, like the double Decker taco from Taco Bell,
you know that one that's got like the soft taco
on the outside with the hard taco on the inside.
That thing is delicious. And yes, that is exactly um
what I mean. And it's totally aproposed because one of
the mini taco stories in our story is actually about

(04:01):
Taco Bell. Really yeah, I have to say that we're
don't talk about Taco Bell in our Chipotle story. Kind
of makes me want to know, like the history of
Mexican food in America. Totally fair. That will be Mini
Taco number two in our double Decker now a triple decker.
Possibly just a bunch of tacos rolled up in a burrito.
I like this episode could also be a seven layer dip.

(04:26):
One of the best things about Mexican food is that
it's really just like you take the same I don't
know how many ingredients and you just like configure them
differently and it's magic. There's a lot, a lot of
a lot of food here. But I think we probably
need to get going right. Okay, we should probably start
that as a fair point. Okay, so let's start our
story with sort of the inspirational part, uh, the founder

(04:48):
of Chipotle and how the whole thing came to be.
So the founder was a guy named Steve Els. He
was born in Indianapolis, but he grew up in Boulder, Colorado,
and he went to high school there and he actually
stayed there for college. He graduated from University of Colorado,
Boulder with a degree that had absolutely nothing to do
with business or food, and that was art history. Really. Yeah,

(05:14):
so moms and dads, if your kids are going to
school for art history, don't panic. They could still be
the next Steve Els, who, by the way, in modern times,
is worth I believe two hundred million dollars worked out. Yeah. Um,
this guy, Steve Ells, was a guy who was not exceptional.
He was just a regular guy. In fact, his father,
Bob Els, says, he was quote a bit of a

(05:35):
delinquent actually in high school, you know, much less so
in college. Unquote. It's a ringing endorsement from your parents, right. Um.
He was also a guy who, like many of us,
got through high school in college without knowing what he
wanted to do with his life. But he had always
liked to cook, and he actually got pretty good at
it in college. And apparently he threw these elaborate dinner

(05:56):
parties in college where he served all kinds of delicious foods,
but interestingly enough, I don't believe ever Mexican food. Also,
by the way, he's around my age, like I'm a
teensy bit younger than him, and nobody where I went
to college was throwing elaborate dinner parties. I just want
to make kid, but you would have a lot of
people it's college kids. Then when I eat, well, that's true,

(06:18):
but it did. I just wish I had gone to
school in Colorado, It's all I'm saying. So in his
senior year of college, a friend suggested to Steve Els
that he should go to cooking school because he couldn't
really figure out what he was going to do after college,
and he thought that seemed like a fun idea, though
he still wasn't really thinking about it as a career.
It was just sort of something to do to I

(06:38):
guess put off growing up a little bit longer. So
he goes to his dad, um with this idea, and
bob Ell says this quote, I'll make a deal with you.
If you work a year doing anything related to restaurant work,
waiting tables is good enough, and then you come back
and tell me you really love the restaurant business. I
will pay to send you to a culinary college. But
I have a condition. It has to be the best

(07:01):
culinary college in America. All right, that's a fair deal,
I think, so go like it. And then he gets
set up. So basically, if it wasn't for Dad, none
of this may have happened. Because Dad was like, he
was pretty serious. He's like, you don't just get to
go mess around, Like, get down to business here and
we'll talk. In any case, that's is exactly what happened.
What Dad proposed, bob El's is exactly what Steve Els did.

(07:23):
He went and worked for a year in the business,
and then he went off to the Culinary Institute of
America in New York. He graduated there in and then
he went out to San Francisco to work as a
sioux chef at a restaurant there that was pretty well
known called Stars That Wait for It was in part
known for its open kitchen concept where diners could watch

(07:44):
the chefs at work. Sound familiar, but we know where
he got his inspiration from. There you go. Also, while
he was living in San Francisco, Um, Steve Ells fell
in love with the huge foil wrapped mission style burritos
that were popular there but not anywhere else in the country.
Before that, he'd only seen burritos like at a Mexican
restaurant on a plate covered in sauce, not wrapped up

(08:06):
in foil, as street food. Essentially, that's how we were
all eating them at the time. Let's think the standard
thought old school yeah yeah, um, But really none of
those things had anything to do with what Steve els
like sort of wanted to do as his dream at
that point. After, you know, graduating from culinary school and
working in this fancy restaurant in San fran he wanted

(08:28):
to open his own fine dining restaurant. That was the
dream for him. But of course, a fine dining restaurant
is an expensive undertaking and a risky undertaking also because
many of them don't make it past the first year.
So instead of going straight for the fine dining restaurant,
he asked his father to loan him seventy five thousand
dollars to open a small burrito shop in Denver, near

(08:50):
the University of Denver campus. He was around twenty eight
at the time, and he saw a burrito shop for
college kids as a low risk investment, thinking that if
he did is he can make enough money with the
concept to eventually open the fine dining restaurant that he
was dreaming of. Later, in a interview in with Bloomberg,
bob Els, Steve's dad recalled saying, quote, so you have

(09:14):
six years of pretty expensive schooling here and it's gonna
be burritos and tacos. Are you serious? I can't say
that I blame him for that. I just paid for
all the school and you want seventy grand for a
burrito joint. Can't you imagine like any parent in America
saying that to their kid. Right, of course, it's like

(09:35):
every dad would say that exact same thing. But look,
bob Els was a good dad. So he went along
with the plan, insisting once again sort of laying down
the rules that if Steve wanted the money, he first
had to write a business plan. He wasn't going to
give him the money on just sort of an idea.
So Steve Els does the math and he writes the
business plan, and he figures out that to break even,

(09:56):
I'll have to sell a hundred and fourteen burritos a day.
So he opens the store in July and he brings
in two hundred and forty dollars that day. Okay, so
in I'm no economic expert, but I bet you burritos
weren't like two dollars. Even if they were six bucks,
that's only forty burritos. And if they were half that

(10:17):
at three, it's still only eighty dollars. So they didn't
really break even, did they. No, they have not break even.
That said, it didn't take long to get a break
and even exceed that hundred and fourteen burrito a day plan.
A couple of months into the restaurant, which was sort
of getting word of mouth and getting a little bit

(10:38):
better day by day, they got a review from a
local paper and it was a really good review, and
so sales shot up and they got to a thousand
burritos a day. A thousand burritos, that's some pretty good move. Law.
So did he end up paying his dad back or
did you just give him one of those burritos for
life kind of cups that would be horrible. No, Now,
he actually did, in fact pay his dad back in full,

(11:00):
really within just a few months of opening that first location,
and a year and a half later they decided, even
though Steve was still at that time hoping to do
the fine dining restaurant, to open a second location in Denver,
and then in three years into it, the third Denver
location was open. So things were going really well. Obviously

(11:21):
we kind of know what happened. Fast forward. Today they
have locations around the world. But of course there's way
more to the story. Right, we have to talk about
the salmonella and their first you know, big investor. I mean,
where are they really now? Right, of course we do
have to talk about all of that. But I have
to tell you, saying burrito over and over again has

(11:44):
a made me hungry and be made me want to
dig into the history of Mexican food in America. So
let's do that right after this. No one can argue
with Steve L. Six us. He started with seventy five
thou dollars that he barred from his dad at age eight,

(12:04):
and now at age fifty three, at least according to Wikipedia,
he's worth around two million bucks. It's a pretty good turnaround.
I would not complain about that me neither. But unlike
a lot of our other physiography episodes, Els didn't invent
something new like vasoline or tupperware. Uh. He didn't take
advantage of new technology like sears or tinder. He just

(12:26):
sort of did something others were doing better and he
had really good timing. So you're saying the ingredients had
to line up perfectly for the world to embrace Chippotle,
kind of like they line up the ingredients at Chipotle
when you go to get your burrito. That is exactly right,
new guy, Nick, And just like the food lineup at Chipotle.

(12:47):
The story gets messy. But before we get to that,
see I told you growner mom jokes. But before we
get to that, I do want to understand the ingredients.
So what is the history of Mexican food in America? Well,
I got to assume it probably came from like the
border states of Mexico, right, Texas, New Mexico, Arizona, California,
all that. Right, Yeah, I think it's fair to say

(13:07):
that early immigration of Mexicans into America in those states
in particular in the eighteen hundreds in early nineteen hundreds
is where a lot of that came from, but also
from the U. S. Soldiers who were experiencing the food
during military operations in Texas in that time period and
then bringing those foods back home talking about them, maybe

(13:28):
experimenting a little bit. All right, So we are about
to officially jump into our history of Mexican food layer
of the Seven Layer Dip episode of Bosiography, right, yeah,
And I think we should do that not by a
timeline like we often do on this show, but instead
by looking at some of the staples of Mexican food

(13:49):
that we love in this country. Okay, all right, So
when you say the staples the classic Mexican menu items,
that's like what tacos, nachos, burritos, fajitas, stuff like that,
and don't forget margaritas. That is like the most important one. Hello,
and I have to add chili to the list, because
even though now we really think of chili as an
American food, it's truly a Mexican food, right, I wouldn't

(14:12):
even think of chili as a Mexican food, It's it's
an American staple. At this point, it is, and we'll
get to that in a minute, but I want to
start with enchiladas. So enchiladas actually the word means in Chile,
which is weird, I have to say, because it seems
like we should call the dish that we call enchiladas

(14:35):
and tortillas. Now, well, yeah, right in the tortilla seems
like it. This is why I wish I spoke more Spanish.
In any case, the enchilada was first referenced in United
States and writing at least in eighty five, and we
don't really know where it came from from an invention perspective,
but it was one of the staples that was part

(14:56):
of Mexican food making its way to America, and like
a lot of the Mexican food that made its way
to America, it wasn't really Mexican. It was, in fact
prepared more for tourists, as noted in the Dictionary of
American Food and Drink in article that says, quote a

(15:17):
Mexican dish prepared more for trista than for local consumption
in reference to enchilata's. Now, let's talk tacos. Tacos are
obviously delicious and hugely important, yes, but they have an
interesting origin story. Jeffrey Pilcher, who's a professor of history
at the University of Minnesota, believes that tacos became a

(15:38):
thing in the eighteenth century in the silver mines in Mexico.
In the mines, the word taco referred to these little
like dynamite sticks, little charges that they would use to
evacuate the ore from the mind. So they were like
these little pieces of paper that they would wrap around
gunpowder and stick into the holes that they had carved
in the rock face, and then they would blow up.

(16:00):
And so the earliest tacos, you're thinking, like, what does
that have to do with the taco, Well, the earliest
tacos weren't like the U shape that we think of today.
They were more like takeedo's hold up. Pilcher says, this
is a quote from him. Quote when you think about it,
a chicken takeedo with a good hot sauce is really
a lot like a stick of dynamite. Unquote. He's not wrong,

(16:23):
now that you mentioned it, right. He also notes that
one of the earliest written references to the taco is
in the late eighteen hundreds, and one of the first
types of tacos described back then is called tacos. Dimon
Narow minors tacos, so that is the most likely origin
of the taco. And as Mexican food started to become

(16:44):
popular in southern California around the nineteen twenties, the first
famous tacos were available, and they were in fact actually
what we now think of as takeedos. That does make sense.
You're working in the mind he needs something you can
grab and go with real fast. That totally makes sense.
There you go. All right, we have to talk chili.
As I mentioned, even though we don't think of it

(17:05):
as Mexican, it really is. Chili originates from northern Mexico
and Texas. Uh. And in fact, it was in Texas
in the nineteen thirties that chile concarnate and tamales started
to become popular with the locals. It was not marketed
with the word chili until much later, when it was
canned and sort of dispensed to the larger American masses. Okay,

(17:26):
so what we now know as chili is technically chile
concarn But of course when Americans read c h I
l e. We think of the pepper or they go child.
If you wanted to re pronounce chili, especially back then
in the nineties. You spell it the way Americans world
pronounce it properly. There you go. Interestingly enough, other than

(17:49):
a lot of the other Mexican food origin stories, chili
was originally popularized by women, most of them were ta
Hannas or Mexicans in the area in Texas, who in
particular became known in San Antonio as the chili queens.
Did I did I stun? You have a chili queen? Yeah.
So in the late nineteenth century, San Antonio was a

(18:10):
booming railroad town, and apparently it became famous for its
women run open air food stalls that served food like
tamales and chili concarne. According to a cookbook called The
Text mex Cookbook, the women who were selling the chili
were portrayed as quote, sharp witted and alluring. Yes. In

(18:32):
other words, they were sexy, and they kind of spoke,
you know, their minds as women do. So they were strong, attractive,
kind of like the chili dish. Yes, and apparently I
think they were single also was which was part of
the allure. And men went to sort of see these
beautiful women and they the ladies and just happened to

(18:53):
eat some Chilian poss So the Chili queens and their
fame helped propel Chili Concarne out of Texas and into
the Midwest and beyond. So that is how Chili got
its start. Okay, nachos. Everybody loves a good plate of nachos.
I remember the first time I had nachos. Yeah, I'm

(19:16):
pretty sure it was. It was in the ninth early
nine eighties, could be the late seventies, but I want
to say it was the early eighties. Growing up, we
got like our first t g I Fridays, and they
did the nachos where like each chip was separate and
had like a tiny little bit of beans and then
cheese on top and then a single slice of halopenia
in the middle of it. And I remember thinking like

(19:37):
this was I had just found Nirvana, Like this was
this was everything salty, cheesy goodness. Right, nachos do that
They hit the spot pretty much all the time. Yeah,
nachos are amazing. Well, there's a lot of debate about
how nachos really began and who created them, but um,
there's a story that I found about the so called

(20:00):
real inventor of nacho is a guy named Ignacio Anaya,
And I don't know if this is really a true story,
but it's a legit article on HuffPost dot com and
um anyway, it says that during World War two, wives
of American military officers who lived um in Equal Past,
Texas would go over the Rio Grand River to the

(20:21):
nearby Mexican town of Piedras Negras, and on one of
these excursions, they went to this place called the Victory Club,
which was a popular restaurant. They just wanted a lull
bite to eat, and the maitre d was, you know,
glad to have the business, but unfortunately had a bit
of an issue that day because he couldn't find the
cook and so he didn't want to turn away these

(20:44):
women because you know, he wanted the money. So instead
he sort of put on the chefs a hat himself
and looked around the kitchen and essentially just threw together
what he had, which turned out to essentially be um nachos.
It was what they called neat canopies of tortilla chips, cheese,
and hollow pino peppers. Sounds very fancy, yes, and kind

(21:08):
of like the ones that t G I Friday's made
where it was each one was a neat. It wasn't
a pile of nachos like we know now. It was
like individual a little air quoting every time I say canopies,
but like of a chip with cheese on it and
a little bit of beans and a hallapeno. So he
made it look pretty for the women. Right, wow, I see.
I always imagine nachos is like a mess on a plate, right,

(21:30):
But old school it wasn't. And interestingly, even though it's
such an American food, was actually invented across the border
in Mexico for Americans. But in Mexico had the name
come about. Well, Ignacio was often called Nacho for sure,
and the dish was named after him. Funny interesting fact

(21:53):
about new guy Nick. That was actually my name in
Spanish class in high school. I love it, um lay
ter on. Of course, Nacho's, uh, you know, made their
way into the US and didn't really gain popularity until
maybe twenty years later, and that credit goes to a
guy named Frank Liberto who began to sell them as
stadium food at Arlington Stadium, home of the Texas Rangers,

(22:17):
and he made a tweak real cheese didn't have a
great shelf life, so he devised basically a fast food
version of cheese and put it on there and there
you have it. Now classic cheese sauce, right, and the
stadium nachos essentially were born. Yeah, okay, let's have a cocktail. Yes,

(22:39):
my favorite part. Time to talk margarita's. Margarita's were first
mixed in bars along the California Mexico border in the
nineteen forties and eventually became a standard beverage in Mexican
American restaurants. The frozen margarita, of course, blended with ice,
became popular in the nineteen fifties, along with sort of

(22:59):
the other tropical drinks of the time, made with rum
and some made with tequilla. Put a little umbrella in exactly.
By the venteen seventies, the margharita had surpassed the martini
as the most popular American cocktail. All right, I'm not
going to say I saved the best Mexican food for last.
I will say I saved the most Chipotle ash food

(23:20):
for last with the burrito. According to Vox, the burrito
was one of the last Mexican foods to actually catch
on in the United States. So we don't know exactly
who invented the very first burrito or why, but we
do know that the name is a diminutive of burrow
or donkey. And there are a couple of different theories

(23:41):
about how the name burrito came about. So if you
had to guess, knowing that burrow is donkey, maybe as
like an easy way to put stuff together to feed
you donkey fair. I originally when I started reading this,
thought they were going with don g meat, and I

(24:02):
was concerned. But neither of those things is actually true.
The main theory that people sort of accept as probably
the theory is that people from Sonora, which is a
northwestern Mexican state, invented the burrito because it was easy
to travel with the name burrito may have come about

(24:22):
from its role as a sidekick to the donkey. So
you're getting ready for a trip, you you know, load
up your stuffy, load up the burrow, and get the burritos.
So there you go. Guestavo Ariano is the author of
Taco Usa, and he believes that this Sonora theory is

(24:44):
the credible one, and he says it's because Sonora is
the wheat growing region in Mexico, and a lot of
the Spanish settlers stuck with the wheat to make their tortillas,
in other words, making flower tortillas which held together way
better than core and tortillas and essentially made the burrito
possible because before that it was corn tortillas. And if

(25:05):
you've ever had a soft corn tortilla, they don't hold
together the way the flower ones to absolutely right, you
try to roll them up and they kind of break
apart and splinter and stuff exactly. So for burrito to
really be what it is, it kind of has to
be in a flower tortilla and um, so that combination
of all of those things happening and the travel worthiness
is probably how it is true burrito was a very good,

(25:28):
on the go food. It is. The word burrito was
first seen in print in the United States in nineteen
thirty four, but burritos didn't actually get popular in the
United States told much later. They caught on in southern
California in the nineteen fifties and started to become popular
nationwide thanks to a guy named Dwayne R. Roberts, who

(25:48):
invented the frozen burrito in nineteen fifty six. Really yeah,
frozen burrito. He was the guy who froze stuff. He
had sort of already had a lot of six us
wait for it, selling frozen burger patties to McDonald's. Oh frozen. Yeah, well,
let's go a little bit more fun than frozen. Let
me throw a fun fact at you. Real fascinating. So

(26:09):
a burrito. You know what happens when you take a
burrito and you deep friate, you make it extra delicious
that too, and you now call it a chimmy changa.
That apparently for the first time, happened in the nineteen
fifties at a restaurant called El Chorro Cafe in Tucson, Arizona, which,
mind you, was established in nineteen twenty two, so it's
been around for almost a hundred years. It's the nation's

(26:32):
oldest Mexican restaurant in continuous operation by the same family. Right,
that's cool. Crazy? So they still exist today. Yeah, they're
still around today. Isn't that cool? All right? So getting
back to sort of the food timeline of Mexican food,
By the nineteen fifties, traditional corn tortillas and flower tortillas
became a pretty significant component in everyday American meals. Started

(26:53):
to be available and used all over the country. In
the fifties and sixties, companies tapped into the growing Latino
market by mass producing Mexican taco shells, tortilla chips, frozen burritos,
and these all became staples in grocery chains and convenience stores,
probably more in certain parts of the country and others,
but kind of all over the place. In nineteen seventy,

(27:15):
and entrepreneur in Chicago by the name of Art Velasquez
founded as Teca Foods, which you've probably seen that brand.
They sold, of course Mexican and Central American foods in supermarkets,
and they were one of the early um users of preservatives,
putting preservatives into the flower in corn tortillas to make
them last longer. All the stuff we sort of you know,

(27:36):
shy away from now, but was very popular at the
time to get foods to travel. In five Tostitos became
Friedo Lay's fifth largest brand. In two when something else happened,
nick Bean, that's right, that very year. In fact, salsa
outsold Ketchup Wow Salsa more popularly catch up and by

(28:02):
tortillas began out selling hot dog buns. That's incredible we
as Americans love Mexican food more than traditional American hot dogs. Yeah, absolutely,
and that essentially gets us to today. But while Chipotle
can take a lot of credit for spreading the mission
style burrito nationwide, it was actually two other iconic companies

(28:23):
that paved the way by bringing tacos and chili to
the American masses. Are we about to get into the
next layer of our double triple taco that we got
going on? Oh yeah, we're gonna do too, essentially mini
bisiography tacos next. If it wasn't for a couple of

(28:46):
savvy businessmen who saw an opportunity, Steve L's creation of
Chipotle might never have happened. One of those two guys
was J. C. Hormel. Hormel was born in US in
Minnesota back in eight two, and the year before he
was born, his dad, George Hormel, who had a long

(29:07):
career in the meat industry, founded his own company. He
called it George A. Hormel and Company, and he focused
on the packaging and selling of ham sausage and other pork, chicken, beef,
lam et cetera. Two consumers. Jay went to college but
left college in nineteen fourteen to start working for his
dad's business, and he continued to work there throughout most

(29:27):
of his life, although he did have a brief interruption
to serve in the military during World War One. At
the same time in history that Ja was coming of
age and coming into the company, canning was becoming more
and more popular as a way to um distribute mass
produced foods and get them shipped all over the country.
So he starts there in nineteen fourteen, and then in Nino,

(29:49):
the company Hormel becomes the first to ever can ham
and they started with that to move their products way
beyond Minnesota. And in nine j Hormel becomes the president
of the Hormel Company and is looking for ways to
grow the business. By this point, Chile concarne is already
being canned by several companies and it's getting out there,

(30:12):
but it's not nationally popular yet, and Jay sees some
potential there. So in j Hormel begins canning Hormel's Chile
concarne and shipping it across the Midwest, taking on the
Texas and Chicago companies that were already dominating the trade.
So he wasn't the first to can Chile Concarne, but

(30:34):
he was a marketing guy, and he organized a variety
of different ways to promote the product, including a traveling
twenty piece Mexican song and dance troupe called the Hormel
Chili Beaners. Yes, they sung and dance their way to

(30:55):
product success, going across the country singing and dancing about
the chill and giving away samples. The competitors were not
up to the challenge and they essentially fell away, while
Hormel continued to can the stuff to the tune of
millions of dollars per year, and of course it's still
available today. The other thing it did, aside from just

(31:17):
getting it out there, was sort of what the American
appetite for a whole new flavor profile and kind of
get them ready for more Mexican food. Right, I mean,
chili got so so popular at one point that here's
a little interesting bit. The chili dog right was first
made in Altoona, Pennsylvania in nine eighteen, right, so before

(31:38):
this happened. But of course, just like anything else, it
starts to spread little by little through mostly interestingly Greek families.
That's an interesting tidbit for another show. But eventually it
finds its way. The chili dog finds its way to
none other than New York, where there's a bunch of
hot dog stands. About the time that happens is when
Hormel's Chili is everywhere. Boom. Chili dog in New York

(32:00):
became a huge thing. Also, interestingly, in l A on
the other side of the country, the chili burger was
gaining popularity about the same time, so they were starting
to pick up and then oh, everyone can have chili,
and they exploded. So like chili at the time was
like cheese today, like now we're in this mover, like
if you put cheese on anything, it's good. And right

(32:21):
back then it was like you put on you know
what it's speaking of? Where is the Chipotle episode? Remember
the big thing for a while was guawk. That was chili.
It was chili back then, and Hormel took advantage of it.
And here's another interesting fact about Jay Hormel. His grandson,
whose name is Smokey Hormel, No really, that's actually his name,

(32:43):
is not involved in the family business. He's not. Instead,
he's a recording artist. He plays guitar and he's done
stuff with Adele Beck Johnny Cash, the Dixie Chicks, Rufus waynewright.
Even justin timber Lake, he ha been apparently with all
the big names as a recording artist. That is pretty wild.

(33:04):
Now do you think when he walks in the room
they all ask him for like a can of spam?
One would hope not? Right, Maybe he's maybe that's why
he got into music, right, he's trying to get away
from the whole canned meats industry. But you would have
to think he's gotta at least have one or two
in the trunk. Right, it's your name, man, Come on,
you've gotta think So. That brings us to the other

(33:26):
entrepreneur and even more iconic brand that was instrumental in
getting Americans all across the country to embrace Mexican food.
His name was Glenn Bell, and the company, of course,
is Taco Bell. I'm sorry, did you say Taco Bell.
That's that's like a millennial calling signs, like a Pavlovian thing, right,

(33:47):
because that's that's what millennials eat, Its Taco Bell. But
I didn't know it was actually named after the founder,
did you. No? I thought it was just a bell,
like in a bell tower, or like a dinner bell
maybe right, right, we think of the Alamo in the
big church tower, but the bell on the top, that's
absolutely nuts. So alright, so Glenn Bell obviously didn't invent
the taco. We already talked about that. So how does

(34:09):
he come into the story here? Right, He did not
invent the taco. As we already mentioned, tacos made their
way to southern California in the early say, nineteen tens
and nineteen twenties, right around the time Glenn Bell was born.
He was born in Linwood, California, in ninety three. He
grew up in that area, graduated from San Bernardino High

(34:30):
School in ninety one, and served in the Marines in
World War Two. After the Marines, he starts his first
hot dog stand called Bell's Drive In That was also
in San Bernardino and now it's nine. In nineteen fifty two,
he sells the hot dog stand and builds a new location,
a new restaurant, selling this time hot dogs and hamburgers.

(34:52):
And from there he watches across the street a long
line of customers at a Mexican restaurant called Meat La Cafe.
This is across the street from him and he's just
frustrated because he's seeing everybody line up over there. Um
that restaurant became famous among the local residents for its
hard shelled tacos, which was sort of a new way

(35:13):
of doing the taco. So Bell tries to reverse engineer
the recipe and eventually the owners let him in and
let him see how the tacos are made. So he
takes what he learns and he opens a new stand
under the name of Taco Tia in nine and starts
selling tacos. Side note. In Glenn Bell's autobiography, he claims

(35:36):
to have invented the hard taco shell, but in the
Google world we now live in, this is easily disproved.
But the ability to preserve and transport the hard taco
shell was instrumental for Glenn Bell and for tacos going
nationwide and becoming UH an American favorite. Bell continued to

(35:58):
grow his businesses, opening three Taco Tias in the San
Bernardino area in the mid nineteen fifties, eventually selling those
and then opening four l tacos with a partner in
the Long Beach area. Then by nineteen sixty two, he
decides to go solo and he opens his first Taco Bell,
and though he didn't invent the hard taco shell, what

(36:20):
he did do was figure out how to transport the
taco shells without them breaking all over the place and
bring the idea of franchising to the world of Mexican food.
So Taco Bell, with their fast food version of Mexican
now becomes available to the masses. So Glenn Bell basically
took Mexican food, and let's be fair, McDonald's did, right. Yeah,

(36:43):
isn't it interesting how McDonald's is working its way into
this episode. First we had the guy who froze the
burrito and the patties froze the McDonald's patties. Then we
have sort of a McDonald's ezing of Mexican food. Say
McDonald's ezing three times fast. You're writing, it's all tying together, right,
But he he made a mass produced, cheap version of

(37:05):
Mexican food that made it more accessible to Americans, and
that kind of americanized Mexican food so much that it
is part of our culture now, right, Okay, So I
just have to say this reminds me of Trevor Noah's
stand up on Netflix where he talks about how his
first roommate in America is shocked that he has never

(37:26):
had a taco. Let me play it for you. Nothing
says American like tacos. It's really nothing says America like
Mexican food. I've I've had the privilege of traveling everywhere
in this beautiful country. I've been two places like Erie, Pennsylvania,

(37:49):
al Paso, Texas, Honolulu, Hawaii. You know, I've been everywhere.
And one thing I've learned across the board in America
is that Americans love talk. I mean, he's kind of
right spot and tacos have definitely gotten fancier over the years.
It's like it's like Glenn Bell made them really fast

(38:11):
duty and then you know, culinary folk made them fancy again.
So I think now that we know all of that history,
we should probably get back to Chipotle. Up next, we'll
talk about how Chipotle grew, what they got right, what
they got wrong, and whether or not they will retain
iconic status or fade into just a brand that was

(38:37):
Getting back to Chippotle, the namesake of our episode um
is important because while they are iconic and headlining this episode,
the question really remains, how did they get there? And
will they retain that status. So when we were talking
about Chipole at the very beginning of the episode, we

(39:00):
could turn before they really began to grow. In fact,
we left their story just after the third Denver location
was open in nineteen s so that was barely into it.
So in while Steve L's still kind of wants to
do a fine dining thing and is feeling guilty every
time he opens a new Chipotle, he also realizes the

(39:20):
potential that Chipotle has, and so he also knows if
he's going to continue to grow Chipotle, he needs more cash.
So he goes back to the bank of M and
D known as Mom and Dad, and they come through.
Els parents once again bring money to the table. This
time they helped him raise one point three million an
investment money from a handful of their wealthy friends. With that,

(39:43):
Els creates a board of directors and a new business
plan and raises an additional one point eight million for
the company and continues to grow and add locations in
McDonald's gets interested, yeah, and they make an initial my
ority investment of fifty million dollars. Now I say minority
investment because that means that's how much the company is

(40:06):
now already worth a fifty million is a minority investment, right.
So the company is doing amazingly well, and McDonald's over
the next couple of years grows to be their largest investor,
UM continuing to invest and allowing them to expand from
sixteen stores UM in two thousand one to five hundred

(40:26):
stores by two thousand five. That is incredible growth. It
is phenomenal growth. But McDonald's wanted to do things the
McDonald's way, so they attempted over the years to get
Chipotle to add drive through windows. Can you imagine some
part of me says that'd be cool, but then again weird. Yeah.
And also they wanted Chipotle to do breakfast, but Els

(40:49):
resisted all of that. He wanted to keep um things
how they were. By two thousand six, Chipotle is ready
for their first public offering. They're ready to go public
on the stock market. That same year, McDonald's decides to
fully divest itself from Chipotle altogether. I don't think it
really had anything to do with the personality clash that

(41:10):
McDonald's wanted all these new things, and you know, Chipotle
slash Stevels didn't, but more because McDonald's was sort of
taking a look at all of their investments and just
deciding that they wanted to focus on McDonald's and get
rid of all of the non core, non McDonald's parts
of their business. But it's important to note that over time,
McDonald's invested something like three hundred and sixty million dollars

(41:33):
into Chipotle. Without that, I mean, maybe there would have
been another investor, but without McDonald's being a part of
the story, they would never have gotten where they are.
The other important point, and you notice this too when
you're looking at this, Nick, is that for the three
d and sixty million McDonald's invested, they walked away with
a cool one point five bill That is a very

(41:55):
good investment. Yeah, in just a couple of years. Yeah,
because they divest in oh six and it wasn't even
ten years from ninety eight, that's eight year return. That's
pretty incredible, pretty drank. So you know, essentially, Chipotle continues
to grow on their own once they are separated from
McDonald's and now public um. By two thousand eight, they
opened their first store outside of the continental US, being

(42:17):
in Canada's going going global. Yeah. In two thousand eleven,
Consumer Reports ranks Chipotle as the best Mexican fast food chain.
At this point, they're serving approximately seven hundred and fifty
thousand customers a day. Yeah, remember that first day of

(42:38):
sales where they sold two hundred and forty dollars worth
of burritos. I will say, I thought it was incredible.
They get up to about a thousand burritos a day
at the store, but seven hundred and fifty thousand people.
By fourteen, Chipotle has now seventeen locations outside the US,
most of those in Canada, but also in some other countries.
By they have two thousand locations overall and more than

(43:01):
forty five thousand employees and a net income of almost
five mill Well, I will say, right about the time,
you're right when like the Chipotle craze was going on.
Everybody was at Chipotle and they had the Chipotle cups,
and it was like it was it was kicking right,
It was top notch. Everybody had to go to Chipotle
for lunch. Yes, and in with two thousand locations and

(43:24):
forty thousand employees and five million net revenue, all seemed great.
Rabid fans are there, it's all happening, And then the
poop hit the fan, maybe not literally for everyone, but
kind of literally for some because the food poisoning thing
started to happen, and it wasn't just one disease. It

(43:46):
was like E. Coli and neurovirus, and it was just
one thing after another, one store after the other, and
it happened over the course of not you know, a
month or a year, but multiple years. Right. And that's
the crazy eiest thing that makes you know it's not
it's it's a company issue, right, is because it happened
in this part of the country and then the other
part of the country. It wasn't all concentrated it was company.

(44:09):
It was sort of all over the place, and it
was really random, and they kept thinking it was solved,
and then it wasn't solved, and a new outbreak would
happen in a new city. And so I think we
have to almost separate the way Chipotle appeared to grow
and what they appeared to stand for versus their actual
behavior who they really were at the core. And I
think the problem is they focused on things like food

(44:33):
with integrity. They that started all the way back in
when they were looking to um source their pork better,
probably because they wanted a better taste, you know, or
a better consistency. But ultimately they found that they you know,
could buy product from local ranches in particular areas and
they could kind of go for this you know, food
with integrity theme, which was starting to you know, become

(44:57):
popular with restaurant go or in general, not just Chipotle.
Absolutely right, you didn't want the GMO stuff and you
wanted naturally sustainable and all of that, right as the
millennials essentially we're starting to come of age did, right,
And that's the kind of stuff millennials were wanting and
so and that was their target market. And so they
got on board with that, and you know, it was
probably less of a feature during the McDonald's years. It

(45:21):
was still there, but they weren't really you know, pushing
it as hard as they had. But once McDonald's was
out of the picture again in two thousand and six,
they get focused on that again and they start advertising
heavily about and when I say heavily, ship alay never
really advertised super heavily, but billboards and and you know, uh,
press releases and you know, interviews with cevels about this

(45:42):
kind of of thinging this part of their basins and
especially when you walked into a Chippotle you could tell
that was kind of something they were pushing for. Was
that sustainability model. And L's at the time, like in
the mid two you know, Mid how do you say that,
mid Oughts, I guess right, was doing a lot of interviews,
um about all of that. Like you'd see him, you know,
with his boots on out on the farm, talking to

(46:03):
the farmer about whatever, the tomatoes or the pork or whatever.
And they added things like biodegradable containers, etcetera, etcetera, And
so you know, this really became their theme. Through two
thousand eleven, they added those gold rappers. Remember that that
was part of their eighteen year anniversary. It's hard to

(46:24):
believe they've been around as long as they have, but
two thousand was eighteen years. They added the Gold World
again to promote food with integrity. Um. In two thousand eleven,
I'm jumping around a little bit, but they launched a foundation.
It's called the Chipotle Cultivate Foundation, and that supports and
promotes good land stewardship, good animal husbandry practice practices, food literacy,

(46:46):
better nutrition. So this is all the stuff that they're
sort of marketing out to the world. And you know,
one of my pet peeves for companies in general is
when they market their goodness, it's out of truly worrying
about being good. Sometimes look at me. Yeah, sometimes you
have to let the goodness speak for itself. And that's

(47:08):
not to say it shouldn't be on the menus and
all of that, but they really um went out of
their way to promote the goodness of what they were
doing as their differentiator. We're better than any other burrito
place because we do this right right, That was their
primary marketing scheme altogether. Yeah, And it's funny because you
and I both talked about the fact that when the

(47:30):
craze of Chipotle was happening kind of maybe was like
the Heyday that we were not into it, you and
I and because we were sort of latecomers to the
to the whole thing. And you know, like I said,
when I walked into a Chipotle, the stores were kind
of dirty, the chairs were uncomfortable, the selection wasn't really
exactly what I like. To the people you know that

(47:51):
worked there weren't very nice. I didn't really get it.
But I think what I saw in the store was
what was actually happening. In other words, yes they worse
their food responsibly, and yes they had biodegradable containers, but
they didn't spend the time or money to train their
staff um or to provide support and services, it seems
like for their franchisees. So there was no push for

(48:14):
their franchisees to keep the stores clean or the machinery
operating in the way that it should, and that is
what allowed for you know, outbreak of disease, and again
nero virus being the first one, but over the years
of these continual disease outbreaks, I think something like seven

(48:34):
people got sick, that's yeah. And there were also some
other stories that were happening in and around, you know,
in that whole era where there was a drug charge
with against the chief marketing officer of the company, a
guy named Mark Krumpacker who got caught up in a

(48:56):
cocaine ring, and that was sort of in some more
bad press for the company. Any there was also some
discussion about Steve ELL's salary being too high and him
being too greedy given everything else that was going on,
and none of this was good press for Chipoli. So
there market value goes down a little bit, their stock
goes down a little bit, the you know, rabid fandom

(49:17):
sort of dissipates to some extent, and you know, they
you know, they're struggling a little bit, like they're not
on the way to doomsday. But they're definitely not the
shining star that they were prior to all of that happening. Yeah,
they definitely took big profit hits for sure with all
of that stuff that was going on. The people just
to it, Yeah, I don't need Chipotle like that anymore exactly,

(49:41):
And so I think, you know, ultimately the end of
the day, Steve l sort of knew that he had
done all that he was going to be able to
do for the company and it was time for him
to step down from his role of CEO. So he
does that in and they announced the new CEO coming
in shortly after that. Who comes for um none other
than Taco Bell go fake here, bringing our episode full circle.

(50:08):
Brian Nicol had formerly been CEO of Taco Bell, and
in March of he becomes CEO of Chippotle and in fact,
the stock goes way up on the news, uh, and
it looks like things are going to be better. So
that kind of brings us up to today. Look, there
are people who don't like the idea of Brian Nicol

(50:29):
running Chipotle because they don't like the idea of Taco
Bell and Chippotle sort of being the same. But the
question really now is will Chipotle regain some of its luster?
Will the rabid fans ever come back? Do they get
to keep or even really officially earn an icon status
or are they just a flash in the pan and

(50:51):
not a true icon? And if I have to make
a prediction, which I guess I kind of do because
I set myself up to make one that is Bhisiography,
it is, I would say I think they're more of
a flash in the pan um, though a very well
known one. Unless they decide under Brian Nicol to really
start innovating, they're just gonna die. Look at all the

(51:14):
other companies, um, some that we've talked about on Bhisiography
and some that we haven't that stopped innovating. And because
of that fell away sears Um, you know, the most
famous probably of all we didn't do an episode on,
but Blockbuster, And so we've seen that across a lot
of of companies. At first, I think it was great
that Steve Els stuck to the mission of keeping the

(51:36):
food choices limited and making the quality really good. But
after a while, everybody can copy that. So unless you're
on the forefront and innovating, you don't survive. He almost
lost sight, right. We said at the start of the
episode that he didn't really make something new or groundbreaking
like some of the other things. He just took what
was already being done and did it better. Well, the
problem is people came behind him and did what he

(51:58):
was doing better than right right. And of course I
think the other really important point is that this is
not a guy who was um designed for this, if
that makes sense. I mean, he was just a guy
who found the right food at the right time and
turned it into an amazing business. But it's not like
he had the head for that necessarily. I don't know.

(52:20):
It's hard to say. I don't know him obviously, and
I don't really know what's in his brain, but it
does seem like there's some hope now with Brian Nicol
in charge. We'll see what happened. My prediction is they
just become maybe a lasting brand for a period of time,
but one of many. Yeah, they'll just fall amongst the
rest unfortunately. Yeah, and I think that it is noteworthy

(52:42):
in pointing out that here in um there are a
few Mexican chains that are doing extremely well. And if
you just look at the number of locations they have
as an indicator, the biggest one is Taco Bell with
over six thousand stores across the globe. Chipotle, however, is

(53:04):
in second place with close stores globally, followed by q Doba,
which has about seven hundred and fifty stores, and then
Mos my favorite that has also in the mid seven hundreds,
and then Del Taco with five and eight stores. So
there's a lot of folks on their tail. Um. But
Taco Bell might actually have to be the icon of

(53:28):
this story as we wrap it up, right, I think.
So they are the ones that kind of spread it everywhere, right,
They're the ones that you just instantly remember, my kids
aren't gonna know about it, right, So Taco Bell might
not be as i'll air quote this classy as Chacotle,
but they're still going strong and everybody knows Taco Bell.

(53:49):
That's our show for today, See you next time. Phisiography
is produced by the I Heart podcast Network. I'm your
host Dana Bart, My co host is Nick Bean, our
producer is Tory Harrison, and our executive producer is Jonathan Strickland.
Have questions I want to give us feedback or have
a company you'd like us to cover. Email us at

(54:10):
info at Physiography dot Show, or contact us on social.
I'm at the Danta Barrett on Facebook, Twitter, and Instagram,
or just search for me on LinkedIn. Thanks for your support.