Chipotle's Gen Z Recovery and Fast Casual URGENT Market Update

Join Fast Casual Nation hosts Paul Barron and Cherryh Cansler as they sit down with Stephanie Perdue, VP of Brand Marketing at Chipotle Mexican Grill, to discuss how the fast casual leader is navigating industry challenges. Learn about Chipotle's accelerated menu innovation strategy, including fresh sauces made daily and the new Build Your Own meal for groups. Discover how they're winning back Gen Z through gamification, the Chipotle U rewards program, and transparent food storytelling. Stephanie shares insights on digital transformation with 38% of sales now digital, AI initiatives empowering crew members, and the strategic roadmap for 2026 amid industrywide headwinds.
#FastCasual #RestaurantIndustry #Chipotle
Episode Highlights
0:00 - Intro & fast casual overview
0:19 - Economic shifts & traffic decline
0:46 - Guest: Stephanie Perdue, VP of Brand at Chipotle
1:17 - Rise of “micro meals” & snacking trend
3:10 - How fast casual brands are adapting
4:20 - Gen Z habits & fewer restaurant visits
5:12 - Inside Chipotle’s marketing & menu innovation
7:46 - Gen Z’s love for bold flavor & customization
8:00 - New family meal concept & digital ordering
10:05 - Convenience for families & busy lifestyles
12:00 - Connecting with Gen Z through rewards & authenticity
13:49 - Balancing quality, value, and rising costs
14:38 - Using creators to highlight real ingredients
15:55 - Portion size debate & customer perception
17:34 - Rewards, nutrition goals & app experience
19:46 - Listening to customers & TikTok hacks
20:30 - New sauces & flavor innovation


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Episode Transcript

Speaker 1 (00:00):
Welcome back to another episode of Fast Casual Nation, the
podcast that started it all. It's going to be a
banger today, and of course with me is miss share Cansler.

Speaker 2 (00:08):
How are you?

Speaker 3 (00:09):
I'm doing fabulously, Paul, how are you?

Speaker 1 (00:12):
It's going to be a really good topic today because
we are in a Fast Casual crisis.

Speaker 2 (00:17):
I feel like, or at least anything guys I talked to.

Speaker 1 (00:23):
Everybody is telling me about their woes in terms of
food traffic and sales and you know, these economic conditions
that we're under right now. We're going to have a
special guest for you, and joining us today will be
Stephanie Perdue, who is the vice president of brand Marketing
at Chipotle Mexican Grill. We will get back with her

(00:45):
in just a second second round.

Speaker 2 (01:01):
All right, back here.

Speaker 1 (01:03):
Before we get Stephanie on, though, I want to share
something that you sent to me this morning. And we've
you know, you and I have been kind of going
back and forth. I don't know that everybody doesn't know.
We don't really talk before the podcast, right, It's not
like planned.

Speaker 3 (01:17):
No, we just kind of I send you some headlines
and then we just Yes.

Speaker 1 (01:21):
It's very because you know, we understand what's going on
out there. It's it's a normal situation, so it's not
a not a big deal. One thing is a big
deal is what we're seeing in terms of a shift
between the consumer of today versus just a very short
period of time ago.

Speaker 2 (01:43):
When you look.

Speaker 1 (01:44):
At this right now, Sharah, And one of the stories
I think that you had on that I want to
share for everybody was this whole issue around what's going
on with micro meals. So explain to me, first of all,
what is this how does this affect.

Speaker 3 (01:59):
Ye've been following this snacking trend and like kind of
the death of the day part for the past several months,
and we are seeing and this trend is driven by
younger audiences who are you know, eating smaller portions at
all different times of the day, so it's not really breakfast,
launch and dinner. They're eating you know, all different times.

(02:19):
And then you also have the people taking the weight
loss shots so they can't eat as much anyway. So
rushaurants started catching on, like Del Taco today we wrote
about them launching this micro meal, so it's like a
little mini burrito and it says seven to ten French
fries and one don't seven to ten French fries, which

(02:39):
I think is perfect. I think this is brilliant. I
would love to order this meal. But then, on the
other hand, protein consumers are still really trying to get
their protein in Shakeshack being Shakeshak smart. They just launched
a giant burger yesterday that has fifty six grams of protein,
and we saw Starbucks last month do the protein packed
you know, thinks. So it's just kind of changing how

(03:02):
restaurant brands are marketing. I think they're they're lt os,
They're really paying attention to what consumers are wanting.

Speaker 1 (03:09):
So okay, so obviously there's a trend here with a
lot of these these brands, but most for the most part, well,
Del Taco is not a giant brand. Shake Shock obviously
we had the Shakesheck team on last week, but they're
definitely in that, you know, that zone of ultimate fast casual.
Do you think we'll see this in the smaller sectors

(03:31):
of fast casual?

Speaker 3 (03:33):
Yes, yeah, like the smaller brands absolutely. And it's easier
for them too, because they don't have as much, nearly
as much red tape, you know, they can they.

Speaker 1 (03:41):
Can launch things a lot easier Yeah, good things going
without dealing with all this problem. Well, listen, today's topic
is uh going to be interesting because I think one
of the things that we have been covering here on
this show for quite some time is this shift towards
gen Z and restaurant visits have declined significantly compared to

(04:03):
the previous generations. If you look at similar age group
in the millennials, right now, sixty two percent of Americans
are eating less at QSR and of course that resonates
into fast casual, and of course what we're seeing now
is that this may become a new maybe a new

(04:24):
luxury category. I don't know that I would call fast
casual a luxury category, but maybe it's becoming that. So
we wanted to bring on Stephanie from Chipotle to kind
of break into it and learn a little bit more
about what's going on. So Stephanie, Welcome into the show.

Speaker 4 (04:40):
How are you, Hi, Paul, Hi Cheryl. Nice to meet
you guys.

Speaker 1 (04:44):
So let's get it first of all, before we get
started too much, kind of give us your day to
day there at Chipotle. What are you in charge of
outside the brand marketing?

Speaker 2 (04:53):
What do you get to do?

Speaker 5 (04:55):
Yeah, so I've been with Chipotle since twenty eighteen. It's
been a meteority growth journey for Chipotle, and I have
the pleasure of working on our advertising, menu, innovation, social partnerships,
local marketing, new restaurant marketing, and consumer.

Speaker 1 (05:11):
Insights consumer insights. When you dive into consumer inc is
it more analyzing the demographics based on your sales data
or is it something broader around like big generational trends.

Speaker 5 (05:24):
It's usually connected. Big generational trends is definitely part of it.
It's usually connected to our brand health. So how are
perceptions of our customers changing for us versus the competition
we have some KPIs Specifically, Chipotle is a leader in
the category for real food, for quality ingredients, for amount
of food for the money. So there's things that we're

(05:45):
tracking and making sure we're continuing to lead. And then
you know, just qualitative and quantitative insights. You know, just
you know, consumer needs are changing, different needs of different
demographics are changing, and so staying on top of that
is is part of the remit of that group.

Speaker 1 (06:02):
I think share when you look at just the number
of brands right now that are reporting data, we're seeing
several of them come in right now. We of course
Scott Boat right from the CEO of Chipotle. You guys
of course reported some sales forecast ombers again that have
kind of mirrored what's happened around the industry, which is slowing.

(06:23):
How are you guys addressing that right now? Has this
been a broader plan or are you just or where
are you today and kind of dealing with this?

Speaker 5 (06:32):
I think from specifically from a menu innovation standpoint, I
think we're really excited about the potential for more growth
from Chipotle. You know, if you study our cadence of
our new menu introductions, it's nothing like the industry has done.
It's been about two maybe three per year, and so
we're looking to step that up. I think right now

(06:54):
we're seeing demands from customers around like new product news,
new acous asians, and I think that's a really exciting
place for Chipotle to grow. I think this past quarter
you saw the start of it for Chipotle. We've had
a lot of success. Our proteins are amazing responsibly raised,

(07:14):
you know, no antibiotics, no hormones. We've had a really
long standing success around introducing new steaks, new chickens, new
flavors that have absolutely wild consumers because it's that craft
that Chipotle takes in terms of where we source our.

Speaker 4 (07:30):
Food and how we could get fresh in our restaurants.

Speaker 5 (07:33):
And so now we've layered on in this past quarter
new sauces, So this red Chimney chery made fresh in
our restaurants every day. And we know that gen Z
goes crazy for sauces, and so what is superpower to
have that we can make sauces fresh in our restaurant,
you know, made with real ingredients, no preservatives, nothing artificial.

Speaker 4 (07:55):
And then what other occasions can Chipotle get into?

Speaker 5 (07:58):
If you kind of study Chipotle, you can see that,
you know, from a group occasion perspective, we have we
have significant opportunity. So we just launched a new build
your own Chipotle meal for four to six people. It's
absolutely incredible value. You basically get the Chipotle line at
your house, you order it through the app, pick it

(08:19):
up in fifteen minutes, and you can feed four to
six people for you know, close to ten dollars and
you're getting a lot of food for the money. So
those are just different ways that I'm personally excited about
how the innovation can can grow the Chipotle brand.

Speaker 3 (08:34):
We talked about that catering offering a few episodes ago,
Paul and I did, and we thought that was really
brilliant because catering is such a hot topic. But people,
the consumer base, I think, thinks of the word catering
as like huge you know, office lunches and parties and weddings.
But what we're seeing is there's a lot of growth
for restaurant brands who are going to be catering to

(08:55):
that smaller group, the four to six people. So I
think that I think you guys are right on on
trend with that well.

Speaker 1 (09:01):
And it also flexes into the family, you know, because
for us that's how we look at things. Because my
daughter a huge Chipotle fan, so she's going to be
very happy about this episode, right. But the point is
is that we get normally we have to kind of
jockey around which menu items, et cetera. Sure, now that

(09:21):
you've got to build your own the digital especially available
in the app, that's more of a family orientation, which
which addresses one of the biggest areas that much of
the analysts have reported to, and that is that gen
Z is leaning on grocery and or secondary you know, alternatives.
So this would be perfect to kind of circumvent that

(09:45):
departure if people are worried about was that one of
the strategies.

Speaker 5 (09:48):
Definitely, I mean we're early days in growing that occasion,
but we can we can, we can definitely see the promise.
I mean, and consumers are delighted, right, You're getting real ingredients.
You're seeing the fresh romain ladd you know, shredded, You're
seeing the fresh grated cheese, you're seeing the delicious protein,
and you're building your own entrees and that's something that
we haven't given our customers the access to do. And

(10:11):
so you know from bulls, burritos, quesadillas, and nachos, you know,
they're having fun and it's bringing people together at the
table and giving them great values. So I see a
lot of different benefits with the offering. And to your point,
I'm a mom of two, I got I got two
girls in sports. There's nothing better than you know, using
the Chipotle app, picking two bags of build your own

(10:31):
Chipotle and having a great meal in fifteen twenty minutes.

Speaker 3 (10:35):
Right. And it also goes along with the trend that
we were just speaking about, the smaller portions, because if
you're you know, four to six people. You know, you
can have your tiny little meal. You're people who are
on their weight loss shot, and then they can have
leftovers for the next like two or three days. So
I think it's back control together.

Speaker 2 (10:50):
Well totally.

Speaker 1 (10:50):
We're the other side of it where you get my
son who is like, no, I want double this, double that,
double this.

Speaker 5 (10:58):
Yeah, he's eating yeah, a full cereal box and you know,
double protein Chipotle labels.

Speaker 4 (11:03):
Yeah, I totally know.

Speaker 2 (11:06):
It's crazy. All right.

Speaker 1 (11:08):
Well, okay, so the the demographic side of things, obviously,
gen Z is what everybody's talking about.

Speaker 2 (11:15):
And this is not just what Chipotle.

Speaker 1 (11:17):
We are seeing this across all of fast casual as
a measured metric. That gen Z's departure from Fast Casual
is becoming a thing.

Speaker 2 (11:26):
It's in it.

Speaker 1 (11:27):
We kind of thought that, I think this time last year,
when Sharon and I were doing the podcast, we kind
of felt like this was going to be an opportunistic year.
It did not necessarily turn that way for a lot
of brands. What do you think has to change for
gen Z to really kind of come back into the fold.

Speaker 4 (11:43):
Yeah, great question.

Speaker 5 (11:44):
I think we got to stay in touch with their needs,
how they're eating, how they're accessing food. You know, I
think we're one of the top brands around teens. I think,
you know, for college students, you know, we're thinking about
every part of their life, right So for college students,
we just launched at Chipotle you Rewards program. It allows
those gen Z customers to accelerate their earning on rewards

(12:08):
and get rewards for every part of their college lives.
So we all know that contextual relevant marketing works, you know,
and we're reskinning our rewards program to make it more appealing,
more value and just really meet them where they are
they're at. You know, I think the pressure is in
the age segment that you're talking about is you know,

(12:29):
post twenty five, where you know it's hard to find.
You know, you're saving money to have a home, you're
trying to get a job, trying to get your feet
under you. So I think, you know, for us, we're
going to stay true to our brand. What makes it
chipotely distinctive in the category is that the fact that
we use real food, real ingredients, We make it fresh
in the morning, nothing artificial, nonofficial colors, flavors or preservatives.

(12:52):
You know, we've done some work where we've seen consumers
really surprised, especially in that gen Z demographic, because they've
they've been accustomed to having chipotles on every corner and
whole food, so, you know, they're accustomed to eating clean eating, right.
I think that's why grocery appeals to them too, not
only just from a value segment, but you know, when

(13:15):
they see that their chicken sandwich is filled with preservatives
and artificial ingredients, I think the you know, I think
it's our job from a fast casual perspective, to elevate
the quality of our food, you know, across brands, and
that's that's really why they're coming to us, is to
get a better experience than fast food, you know, whether
that's clean ingredients, stronger animal welfare, and just better taste.

(13:38):
So I think that's it's impaired and it's really beholden
for the fast casual brands to continue to tell that
story and why the quality is better. And I think
it's very appealing for gen Z.

Speaker 3 (13:49):
Yeah, we've talked about you know, the fresh food and
the and the price point, and Scott, your CEO on
the earnings call, I thought it was interesting that he
was talking about you know, you have these fresh food everything,
and the prices are still twenty to thirty percent below
your peers. So he's really trying to lean in on
that value proposition. Do you think customers realize that because

(14:12):
I mean, as people see that the prices are increasing,
you guys are still lower. So I guess how are
you telling that story to show these younger consumers that hey, yeah,
we're still less expensive and more healthier.

Speaker 4 (14:25):
Also, yeah, great question. You know, we do.

Speaker 5 (14:28):
We do a lot of different things. I think we're
going to continue to turn up the volume them. But
we'll let me give you a couple examples. You know,
we'll bring creators who are real big super fans in
social media about Chipotle.

Speaker 4 (14:38):
They just love their.

Speaker 5 (14:40):
Particular order, their ble, so we bring them in in
the kitchen, we have him make it and you know,
so they're pulling, you know, whole avocados, checking the avocados,
making guacamole from scratch, and it's pretty eye opening and
in terms of the what the ingredients are that are
going into their favorite Chipotle entre.

Speaker 4 (14:58):
So we'll continue to.

Speaker 5 (14:59):
Do more of that, make that transparent, make that accessible.
You know, social media allows us for great content that's efficient,
that's easy to make. And I think it's just speaking
in that you know, that language in terms of, you know,
how do we show what really goes into the food
and compelling ways.

Speaker 1 (15:17):
I don't know that you guys have a problem with
that though, I mean.

Speaker 4 (15:21):
No, we don't.

Speaker 5 (15:22):
It's just more turning up the volume, you know, because
I think where you get you know, what's in this
item in fast food for ten dollars versus what's in Chipotle.
I think what I'm saying is continue to reinforce that benefit.
That's why people are coming into fast casual.

Speaker 1 (15:37):
Okay, well, I think the elephant in the room that
many people will refer to around Chippotle has always been
this departure of portion size, because that's that you guys
know this, I mean, this is the number one complaint
that we see out there when we're studying the brand,
because I don't see the complaint on the quality of
the food dropping. I see people saying it's it's even.

Speaker 2 (15:59):
Better, you know.

Speaker 1 (16:00):
So it's really boiling down to that portion size because
as you know, the dollar is much for it. Because
I think a lot of these college kids are expecting
a two meal bowl absolutely half the meal at lunch,
half the meal at dinner kind of thing.

Speaker 4 (16:14):
They actually do that because we have so much food
in the ball. So it's it's pretty funny.

Speaker 2 (16:18):
So so how are your address?

Speaker 5 (16:20):
Yeah, I think it's you know, reminding people and showing
the you know, how people are using our food.

Speaker 4 (16:26):
So people love to make two meals out of the bowl.

Speaker 5 (16:28):
They actually get a side tortilla, they make a burrito
and a bowl, and you know, I think it's showing
those hacks. You know, it's important operationally to be consistent.
So that's something that's very important to our organization and
it's something that we're making sure our restaurants are continually
consistently you know, portioning. But honestly, you know, we give
more food for the money. Our perceptions around abundance have

(16:49):
never been stronger. But we do need to remind people
about all the different ways that you can use Chipotle.
And that's where you know, showing that the side tortillas,
showing how you can convert a bowl into tacos, showing uh,
you know, all the you know, even the build your
own Chipotle, how you can access value at different different

(17:10):
different ways and different occasions. For Chipotle is really important
in these times, as you mentioned that people are looking
to make sure they get the most bang for their buck.

Speaker 3 (17:19):
So I thought, I think it's interesting that the double
meal thing, because I think it's easy to do that
at Chipotle if you're getting like you double up on
that protein, which is a few extra dollars. And I
saw last week in the app, I had it a
reward that was like free double meat, and I was like, meat, Like,
I thought that was like brilliant marketing because that is
the way to get two meals out of one if

(17:39):
you just add that extra extra meat. So that was interesting.

Speaker 5 (17:43):
Sure, and that protein is really satiating, and it's clean
protein again, no antabetics, you know.

Speaker 2 (17:48):
NormOn that's my favorite still totally.

Speaker 5 (17:51):
And I think people are surprised about how much protein
grams are in an entree. You know, they're they're really floored,
you know, to feel like they're they're meeting their protein goals.
Thirty six grams eighty grams of protein just in one city.

Speaker 2 (18:03):
Which is huge.

Speaker 1 (18:04):
And I remember when you guys launched those lifestyle balls
for the first time. I think a lot of people
I know because I know a lot of trainers and
stuff that are on Keto and they've got all these
different you know, mechanisms of tracking macros and all that
kind of stuff. I don't think that the average consumers
worried about that as much, but I do think they
are worried about how much meat, you know, can I get,

(18:28):
which is kind of the big factor here going into
that neck what.

Speaker 4 (18:32):
About Okay, So, by the way, yeah.

Speaker 2 (18:36):
Yeah, share a hit on it.

Speaker 1 (18:37):
There is that you're leveraging into the digital side where
you kind of let people know. But at the same time,
when you go into the app and I feel like
I'm a Chipotle app connoisseur, I know all the little
tricks around it, I feel like there's a few things
that need to be added. Number one, I'm going to
make my own suggestions.

Speaker 4 (18:58):
Okay, I'm listening, all right.

Speaker 1 (19:00):
It is very difficult to find the shredded cheese as
an extra.

Speaker 5 (19:06):
Oh okay, yes, so she's delicious to every day.

Speaker 1 (19:11):
Old girl that like lives off of that. That's like
the lifeblood to a meal. Uh So she's always about
scheddar cheese, getting the extra and I have to go
in to get the extra.

Speaker 4 (19:23):
Cheese, I hear you. Okay, is there like.

Speaker 2 (19:29):
I'm just I'm not. I don't know.

Speaker 1 (19:31):
I have yet to find it down there because it's
usually you know, you can get the light. You slide
and you can get the light rise or the light anyway, just.

Speaker 3 (19:42):
Ordering his dog.

Speaker 2 (19:46):
It's something, all right.

Speaker 5 (19:49):
We've had a lot of tiktoks around just adding extras
like that and how to hacker a menu, which I
think is really interesting. We listen to those all the time.
One in particular for September. She basically loves getting a
side of protein as a snack for Chipotle because again
it's like thirty six grams that chicken is delicious.

Speaker 4 (20:08):
Yeah, so you know, I think, can.

Speaker 3 (20:13):
I go on and order just hey, I'll take a
side of chicken, like you.

Speaker 5 (20:16):
Can double your protein and you you know, when you
do go in restaurant, you can ask for things on
the side. And to Paul's point, on on our app,
we we have a basically a slider that allows you
to go more, you know less, or put it on
the side.

Speaker 2 (20:30):
Let's talk sauce strategy again.

Speaker 1 (20:32):
You just briefly went across that because this is this
is one of the things I think when you look
at the Carnita product, you look at just what you
guys have done around just the seasoning inside the chicken
product itself. Now you're leveling up to an additive outside
of what has been only salsa, you know, really in

(20:55):
the variations there. Do you think this is going to
stay around? Is this something you feel like is a
long term initiative that will be resident on the menu
from here on out?

Speaker 5 (21:05):
Yeah, we do, Paul, I think, you know, I think
we first got a taste of success with our case Oblanco,
so we launched that in twenty twenty. Since that launch,
we've doubled the business. It's become one of one of
the fan favorites on the menu. You know, we've been
cognizant to make sure our operations, you know, is not complex,
and so I think, but then we realized, you know,

(21:26):
I think making these sauces in the back of the
house fresh was not a hard thing for our crew
members to do, and they brought a lot of flavor excitement.

Speaker 4 (21:35):
Right.

Speaker 5 (21:35):
You know, you can completely change your Chipotle entree with
adding a dobo ranch. You know, you can make your
salad completely different. You can add to your carneasada bol
red chimmy churry and get transported to a completely different
flavor place. And I think the competitive advantage we're finding
is that it's not sauce in a packet that's been

(21:55):
sitting out, you know, for months. It is something that's fresh,
and consumer are really appreciating that. And I think what
you're finding in social media is that flavor excitement, that
accessible flavor at a low price is really driving consumer interest.
And I think it's specific to gen Z. They have
fun with sauces. They you know, it's everything you know

(22:17):
and you know how you pour it, how you interact
with it, and so yeah, I don't think I think
that trend is going to continue to accelerate. We're excited
about what we can do with the fifty three ingredients
we have in the back of our house. I mean,
it's just it's a big competitive advantage to make these
things fresh. And I think the light customers more frequently
around new flavors.

Speaker 3 (22:37):
He get us a sneak peak on the next sauce, Like,
what are you guys testing in the next sauce.

Speaker 5 (22:41):
I've already been getting ideas from you guys, So you
tell me you're a h Chipoli knnosumer is like, think.

Speaker 2 (22:46):
Here's what we do.

Speaker 1 (22:47):
We take the fifty three ingredients, all right, we know
they're using cross utilization.

Speaker 2 (22:53):
We plug this into chat.

Speaker 4 (22:54):
Gbt BT love it and.

Speaker 1 (22:57):
Ask for creative sauce ideas that come out of it,
and then we break it as news.

Speaker 3 (23:02):
Yes we do, and we have to start with ranch.
Ranch though as like the basis, since that's like gen
Z's favorite sauce is ranch. A catch like you're Adobo
ranch was awesome?

Speaker 5 (23:13):
Yes, Yes, the Adobo ranch was really awesome because it
took like that spice of adobo that's really unique to Chipotle,
and I think brought those like fresh herbs and yeah,
it was something something different and I and that's where
we're excited.

Speaker 4 (23:25):
I think we can do way more of that in
the future.

Speaker 3 (23:28):
And you've charged a little extra for that too, right,
So I mean that was that was a menu way
to cover some costs.

Speaker 4 (23:34):
Yeah, you know, under a dollar or less.

Speaker 5 (23:35):
And I think that's what we're seeing is like it's
really approachable for customers to you know, have a different
flavor experience at Chipotle.

Speaker 1 (23:43):
We've got okay, so that that kind of brings us
into price a little bit here, forty seven percent right
now of restaurant operators saying that they're trying to add
new discounts and value promotions, usually through loyalty programs or
some kind of personalized deal. When you see that kind
of day where everybody else, for the most part, competition wise,

(24:04):
is out there looking at doing something like that, what's
on the roadmap for you guys?

Speaker 4 (24:08):
I think, I mean, the digital ecosystem is strong.

Speaker 5 (24:11):
At Chipotle, we've got you know, you know, over twenty
million reward members. We have strong, you know, a strong
app that's sticky, and I think what we're seeing is
it drives business, right, So I think you have the
ability to be highly targeted on the app and really
understand customer behaviors, and you know, it's it's easy to

(24:32):
plug into your digital ecosystem and deliver great value. So
I think it's a strong trend. I think from an
advertising perspective, I think consumers still want to know why
fast casual brands are different than fast food. So I think,
you know, having value within the digital ecosystem makes makes
a lot of sense. And you know, I think the

(24:53):
best digital engagement is one that provides education plus something
for you.

Speaker 4 (24:57):
So let me give you an example.

Speaker 5 (24:59):
The summer, we've had a wildly successful annual digital promotion
called Chipotle IQ.

Speaker 4 (25:06):
Real simple.

Speaker 5 (25:06):
You answer five questions about Chipotle, you come away learning
about the integrity of our food and the commitments we
make to our food, and you get a free Bogo
or free rewards points or free side. So we've had
the most entrance in that promotion that we have ever had.
And so I think, you know, the challenge to fast
casual brands is how do you create that education and

(25:27):
that digital engagement and a really fun way. And if
we're talking about gen Z, gamification is a really strong
trend and we see you know, the promotions that we run,
higher redemptions, higher engagement than the previous year. And I
think it's all about how do you express your unique
brand proposition within that digital engagement so you don't become

(25:49):
a ce of me Too's right?

Speaker 1 (25:51):
Well, I mean, you guys had a pretty good game integration,
was it with tech and eight?

Speaker 4 (25:55):
Yes? Yeah, yeah, we had.

Speaker 5 (25:57):
We did college football twenty twenties XA college football. And
we have had a history of partnering with video games
or or platforms like Roadblocks, and you know, I think
for us it creates a fun engagement with the brand
where you actually walk away and learn something about the brand,
which is really cool.

Speaker 1 (26:18):
All right, more ideas and I'm gonna throw at you.
I got a chance to talk with the team over
at AMP, which is a digital payment ecosystem. I'm sure
you're familiar with them. They are integrated in with you guys.
And he went through and he sent me a video.
He said, Paul, I'll send you a video of me
going through Chipotle's line and paying through.

Speaker 2 (26:37):
You know, the use of.

Speaker 1 (26:38):
Digital assets basically, like whether it's a stable coin or
you know, in some cases an alternative crypto asset. Now
that we have all this happening in the regulatory front
and all of these banks and all in the administration everybody,
do you think we're going to see like stable coin
payments available in the app on Chipotle soon?

Speaker 5 (27:02):
I don't think right soon, But we are we are
always looking for ways to make our payment system frictionless,
our reward system frictionless, and so I think you'll continue
to see innovation from us with payment to remove any
kind of friction points in the restaurant. So we'll keep
an eye on on you know, the bitcoin and and

(27:23):
all of that and we do have ways to redeem
if you're choosing that form of payment. But I think
I think you know what, I think the trend you're
seeing is how do you continue to take friction out
of the payment process for restaurants, how do you continue
to take friction out of being a known rewards member
or if you haven't joined at all, you know, having

(27:43):
a multi step process to join. I think you're going
to continue to see innovation to make make it easier,
especially when you know, for restaurants throughput and you know,
the time that you spent in the drive through is
so important, you know, in terms of sales, and so
I think I think that's a really important trend.

Speaker 1 (28:00):
Well, speed is going to be you know, it's a
paramount right now, and we continue to see you know,
kind of the combination of speed and convenience as the
number one pair and operations share When you look at
the broader scale of fast casual, would you say that
it's trending more toward drive through or less.

Speaker 3 (28:21):
I think it's trending more if brands can afford it. So,
I mean that's the that's the thing, right Like I know, Chipotle,
you're doubling downe on your Chipot Lanes, which is interesting
with with that with that speed and for the speed
and accuracy.

Speaker 5 (28:35):
We are, you know, especially especially we're talking about that
twenty five to thirty four. I mean, I think they're
like they've been born with convenience, and I think our
Chipotle Lanes, which is just a mobile pickup where you know,
place the order on the app, gives you a time
you drive through. It's so easy. I think, you know,
eighty percent of our new restaurants are going to have
a Chipot lane this year, and it's definitely been a

(28:58):
channel that's helped us improve the convenience perceptions of our
brand and and create more loyalty.

Speaker 1 (29:05):
Stephanie, what was the reason that maybe this is only
here in South Florida where I am. What was the
reason that Chipotle took away that little when you do
a takeout or carry out, you know, for a pickup order,
there was like usually like a little book case type
thing where the bags would be and you'd see your
name on it.

Speaker 3 (29:24):
You still you still have that there?

Speaker 2 (29:27):
We don't have that.

Speaker 5 (29:28):
You got to check your restaurant, Paul, Yeah, let me
find out it's gone.

Speaker 1 (29:32):
It's gone. Both of the restaurants we use some kind
of big, you know, brand wide change. I was like, oh, okay,
I mean it's very nice they hand your food to
you and yeah, you know, but it's still it's a
little you know sometimes there if the if it's you know,
at six o'clock, it gets to be a little heated

(29:54):
in there, like who's got what order?

Speaker 2 (29:56):
Kind of thing. Anyway, probably a small problem.

Speaker 5 (29:59):
I love this Polly tips from Paul no I podcast speech.

Speaker 4 (30:03):
How we're following up after this conversation.

Speaker 2 (30:09):
I got tips.

Speaker 1 (30:11):
Anyway, let's hit on the snacking topic because this is
something that you know. Obviously Share has been reporting on
this a lot. We've seen a lot of brands going
in this direction. I don't know about this seven French
fry thing. I'm not sure about that's really specify.

Speaker 3 (30:25):
I freaking love this idea because you could ask my husband.
I just want to bite of everything. I don't want
to go through and drive through and get a whole
thing of French fries because my fat ass is going
to eat it all. But I only need three French fries.
So if I can go get seven to ten French
fries and I and I don't have to pay this money. Brilliant,
So I wish every single restaurant would.

Speaker 2 (30:46):
Does that with the little mini chips, okay, see.

Speaker 4 (30:48):
Chips, and people use their kids meals, right, so let's
be honest.

Speaker 3 (30:51):
I not the kidding meal constantly. But then I feel
terrible like I'm a bad human because I'm ordering off
the kid's meal, like I'm ripping people off. But I
just want the small portion because that, okay.

Speaker 1 (31:01):
That brings up a big why would you not be
able to go into it? But I know this is
counterintuitive of many people, like you know the amount of
food that comes out for most part, but if you
look at someone like me, I won't eat a whole bowl.
And you know, if you could offer a half bowl product,

(31:22):
it's a little smaller and it's kind of like the
little round bowl you have, and there is a serving container.
I've seen them. They're they're usually for extras, but maybe
that would be a.

Speaker 3 (31:32):
Way eat a whole bowl. Really, you don't eat a
whole man, I just can't do it. So I think
it's growing up in the Midwest. I will eat whatever
is given to me, so I don't need a whole
bowl because I'm like, I'm going to save my whole
bowl and have the leftovers later. There's never leftovers. I'm
full and I'm still eating.

Speaker 5 (31:48):
So if I man your technique on eating the Chipotle
bowl is it?

Speaker 4 (31:52):
Do you turn it upside down? Do you shake? Do
you eat left to right? Do you mix? It's a conversation.

Speaker 2 (31:58):
I am right to left? Yeah, okay, nearly a problem.

Speaker 3 (32:03):
It's mister logical logic right till left not good.

Speaker 1 (32:08):
I'm already messed up. Uh this I can see. Uh, okay,
off peak. Let's talk about that for a second. Because
almost any time I go into Chipotle, there's a line. So, uh,
is there a good time I'm working for me right now?
A better time at Chipotle where I should order?

Speaker 4 (32:30):
You know? Have you tried mobile pickup?

Speaker 3 (32:32):
I do?

Speaker 4 (32:33):
Mobile pick sounds like you do? Right, Okay, so you're
you are skipping the line and that and then.

Speaker 2 (32:38):
But occasionally it's we're on the way and you're on
the way. You're driving, so you can't really do it.
So it's like, Okay, I got to go in.

Speaker 5 (32:45):
Yeah, got it. I mean, I mean, I think there's
benefits to both, but yeah, I would say use the
mobile app, but it sounds like you do that already.
Plus you know, you know, getting rewards is easy through
the mobile app. But you know, I think I don't
have any on getting through the line.

Speaker 1 (33:01):
I think you know, what's the biggest day part for
you right now?

Speaker 2 (33:06):
Is it still lunch?

Speaker 4 (33:08):
Lunch and dinner are pretty equal? Yeah?

Speaker 5 (33:10):
Okay, all right, Yeah, And honestly, we've seen ships, We've
you've seens we have people eating like what what do
you consider a lunch? You know, like it is it
is bleeding like later into the afternoon daypart. Yeah you're saying,
yes it is, and in dinner is bleeding earlier.

Speaker 3 (33:24):
Into a RuSHA ont at two o'clock and it's like
a dud zone. But now people are eating lunch later
and dinner earlier.

Speaker 4 (33:31):
I'll find slow clear definitions.

Speaker 2 (33:34):
Yeah, so I don't have apt for you.

Speaker 1 (33:37):
Weekends are a little bit different. Well, I think this
this goes back to the trends that you know, the
industry and share has been reporting on. Is this especially
in the snacking side where you don't really have day
parts anymore, where people are kind of coming in at
all hours of the night and you know, just whether
it's a lunch, dinner, or whatever, that's a big deal. Okay,

(33:59):
So back to the app for a second. In terms
of I want to kind of get a framework of
how much business is coming through digital right now because
I know you guys.

Speaker 2 (34:09):
Have reported on this report before. Where are you today?

Speaker 5 (34:13):
Yeah, we're around We sit around thirty eight percent, roughly,
could be hired, could be a little lower, but roughly
around there, you know. Really, uh, that includes both our
own and Marketplace. So it's been it's a very significant
business for us. Again, we have over twenty million reward
members that are that are engaged with our brand, and

(34:36):
it's it's something that you know, I think is it
is definitely a superpower. You know, be able to think
about today in twenty twenty five marketing and being able
to reach so many people is incredible and learn about
you know, their behaviors, their preferences, and I think, uh,
you know, the app has been something that also I
think has helped fast casual become way more convenient for sure.

Speaker 2 (35:00):
Stephanie, what about third party?

Speaker 1 (35:02):
Have you seen any trends where this is slowing and
you're seeing more customer pickup?

Speaker 5 (35:07):
Yeah, we have seen Marketplace be an incremental customer. I
think they're shopping restaurants differently than the customers that are
shopping your brand. So I think it's important to have
strategies for for both, and you know we do. We
have benefits of being part of our Chipotle dot com,
our Chipotle app, and there's benefits of being part of marketplace, right,

(35:28):
So I think we see them as distinct channels and
important ones, you know, to get new customer acquisition.

Speaker 3 (35:37):
Everybody's talking about, you know, Chippy and the avocado bod
and the bowl making and can we just get an
update on where you guys are because we have people
come on the show a lot and they're excited about that,
but you know they don't have the budget to do that,
and you guys are are doing that, So can you
just kind of let us know how that's going.

Speaker 5 (35:54):
Yeah. I think the technology innovation that has been focused
on empowering our crew and our general manager has been
has been quite incredible.

Speaker 2 (36:04):
You know.

Speaker 4 (36:05):
I think one of the things they're finding is like, Okay,
what are the pain points in our restaurant.

Speaker 5 (36:10):
One of them was you know, making sure although you
know our gms they are we have you know, little turnover.
Eighty percent are promoted from within you know, from a
from an entry level crew member standpoint, like scheduling those
interviews was time consuming, so they came up with an assistant,
an AI assistant to help schedule those interviews. That's helped

(36:30):
staffing considerably. And then you know, looking for other paints
in the pot with the restaurant, you brought them up, chips, avocados.
I think there we still need more time to flesh out,
you know, with using real ingredients. It's tricky, right, No
avocados the same how you mash it as a science, right,

(36:51):
So I think we're optimistic that we're going to continue
to find technologies that saved the crew time. But I
think it's that lens of like how do we make
the crew member, how do we make the managers jobs
easier so they can focus on food and service and
you know, and use that labor in strategic ways. And
how do you take some tasks that are like ugh,

(37:12):
you know, this is the last thing I want to do?
How do you take those off your plate?

Speaker 1 (37:16):
Yeah? I think that's that's going to be the magic
of understanding how to kind of advance this technology, whether
it's AI or we get into any kind of robotics
side of things here soon, which is still a ways off,
because I still am concerned how much that is going
to impact costs for restaurants if it because if you
don't forego labor, then you're adding you know.

Speaker 2 (37:40):
Ops and op costs, So that in.

Speaker 1 (37:43):
Itself, I just don't know if consumers can withstand that
kind of increase in price right now, looking ahead toward
twenty twenty six, as we start to get in this
this isn't a prediction show, but we're going to be
doing one, by the way, guys, so make sure subscribe
to the show right now. We're going to do a
prediction show for twenty twenty six. We're gonna drop some

(38:03):
crazy bombs on you. But for you, Stephanie, what would
be the realistic because there is a little bit of
a hit on the industry right now, what's the recovery
timeline look like where you can start to see solutions
that are regaining this sales share that's being lost right now.

Speaker 4 (38:25):
Yeah.

Speaker 5 (38:26):
I think it's a couple of things, and I mentioned
them a little bit earlier, but I think it's doubling
down on innovation. So again we have our cadence of
our menu. Innovation is much smaller and much less than
a lot of the category. I think it's being louder
with our proposition of real food that's really puts us

(38:46):
in a category of one. I think it's smart with
being value in the digital ecosystem. We kind of talked
about that a little bit, in the power of the
customer databases that you have that we all have, and
how to you know, meet the customer where they're at.

Speaker 4 (39:02):
And I think just being on the top of trends
and new occasions.

Speaker 5 (39:04):
I think, hey, you know, I think the restaurant industry
why I join is because it's agile, and it because
it responds to consumer trends quickly. That's what what's always
fascinated me. And so I think that's something that you'll
see Chipotle continue to do. I think you saw it
in this last quarter, and we're going to continue to
do that and find those new occasions, whether it's how
people are eating differently, if they need more value, how

(39:27):
do we demonstrate that value in all parts of the menu.
And and you know, that's I think what gets us
out of bed and it makes us excited that there
is there is growth ahead. And I think you just
got to remain true to who your who you are
and understand who your customer is and respond with agility
and with the right you know, energy across your organization

(39:50):
in all aspects of operations, marketing digital.

Speaker 3 (39:55):
Okay, Stephanie for our last question. What is the Stefanie
Purdue Chipotle Bowl?

Speaker 2 (39:59):
What is it?

Speaker 5 (40:01):
Sure, it depends on what day it is, but I
can give you a couple If you haven't had our
carneas Soda Salad bowl, it's amazing, Like you can get
under five hundred calories, you can include guok on it.
I mean it, you know you look at out any
whole thirty diet.

Speaker 4 (40:15):
That is amazing.

Speaker 5 (40:16):
I also like in the Lifestyle bowl section, are are
balanced macros? So I basically I use the slider on
the app to do light rice, heavy lettuce, which is
you know, shredded fresh every day. I mentioned that again,
plus the toppings. I can get a lot beans, glock,
light cheese again, a little bit light extra on everything

(40:37):
to make it perfect to who I am. But you're
really craving something amazing? Have you tried our ques idea?
You compare it with three dips. That's my my cheat
meal when I'm feeling good. I had good workouts the
whole week. But what that's what I love about Chipotle
is I can balance it to you know, whatever whatever
I need for the for the day.

Speaker 1 (40:55):
All right, man, Okay, Stephanie Purdue, vice president of brand
Marketing over at Checkpoul and Mexican Grill, thanks for coming
in today.

Speaker 2 (41:02):
We appreciate it.

Speaker 4 (41:02):
Thank you guys, thanks for having me, all right, you bet.

Speaker 2 (41:05):
Okay, what a what a great interview.

Speaker 1 (41:07):
I think we got some answers for Chipotle, shouldn't dodge anything,
which was good. It's great, and I think we continue
to see maybe this market. But I'm a little bit
concerned about fast casual right now, Shara, in terms of
just the sales challenge. Are you seeing this industry wide
in terms of these downtown.

Speaker 3 (41:26):
Yeah, I'm a little concerned too, But I'm also concerned
for all the markets. So qs are casual brands, you know, like,
so I don't think I think we're all in the
same boat. So I don't think, you know, I don't
think QSR is going to come in and take market
share and vice versa with casual dining because everybody is
in the same situation. So I think we just got

(41:47):
to struggle through this next year or so and we'll
be back.

Speaker 2 (41:51):
Oh it's going to be interesting for sure.

Speaker 1 (41:54):
You guys, of course, do not want to miss it,
because we are going to be delivering to you the
best of the best here on Fast Casual Nation. If
you're not subscribed to the show, whether it's in the
audio version over on Spotify or Apple Podcasts, do that
right now. If you're watching out there on YouTube, hit
like and subscribe down below. Give us a comment. We

(42:14):
always love to get your feedback, and of course we'll
catch you next time right here on Fast Casual Nation.

Speaker 2 (42:19):
Take care,