A month after taking over as CEO of Chipotle Mexican Grill in March 2018, Brian Niccol told investors his turnaround plan for the chain would involve a "maniacal" focus on improving the company's digital platforms.
At the time, digital sales represented 8.8% of total sales, and Chipotle was still reeling from a series of food safety scandals that caused sales to plunge. Niccol tasked himself with modernizing the brand for the next generation of digital savvy consumers.
It was no small task. In the early days of the job, he recalls walking into a restaurant and noticing that it was still taking fax orders.
"The brand was really invisible," Niccol told Insider.
Three years later, amid the disruptions of a global pandemic, Chipotle is no longer inconspicuous. In fact, in 2020, digital sales grew 174.1% to $2.8 billion and accounted for 46.2% of sales.
The Newport Beach, California, fast-casual chain is among a handful of restaurant companies that have managed to fare well during the pandemic, which underscores the importance of a chain's ability to adapt and reach consumers via multiple digital channels.
"I've been very fortunate to lead a great company with a great group of people and a great culture," Niccol said. "Our strategies are working, and they'll continue to work."
Chipotle's stock has more than tripled in value under Niccol's reign. Shares hovered at $423 in late March 2018 and now sit at roughly $1,418.42 as of March 10.
After a couple years of testing, Chipotle is rolling out an oven-cooked quesadilla as an online only product. Chipotle
Menu innovation
Chipotle's menu had remained largely untouched for years until Niccol came on board.
And when Chipotle had introduced a new item in the past, the results weren't always positive. Take the introduction of queso about four years ago - prior to his arrival. The cheesy dipping sauce was criticized for being too grainy.
Under Niccol, that recipe was overhauled and reintroduced as Queso Blanco in early 2020. It's now a fan favorite.
In earnings calls, Niccol is famous for discussing the brand's meticulous "stage-gate" process. Nothing gets introduced until it's thoroughly battle-tested to ensure it meets several standards.
Items that have successfully gone through this rigorous testing include carne asada, Cilantro-Lime Cauliflower Rice, and the chain's new Quesadilla. The latter is debuting this week (March 11) as an online-only product after being tested for about two years.
Last summer, during the pandemic, the chain additionally introduced certified organic lemonades and agua frescas from Tractor Beverages.
"I'm really proud of how we've been disciplined in what we've done with the menu," Niccol told Insider.
Chipotle's loyalty program now has about 20 million members. Chipotle
Digital innovation
Chipotle's second make lines - a second food line available for assembling off-premise orders - were also revamped under Niccol.
When he arrived, these lines were dedicated mostly for "big orders" such as catering and fax orders, Niccol said.
In 2018, they generated about $200,000 in revenue for the chain. The year before, it was lower - $150,000.
Chief Technology Officer Curt Garner, who came to Chipotle from Starbucks in 2015, was already digitizing those second-make lines when Niccol started the job. Rather than reading an order ticket, employees assemble food by looking at digital screens which indicate which ingredients to use in each order. It improves accuracy and speed.
Niccol and Garner saw these lines as a perfect opportunity to optimize the company's digital-ordering system, which Garner and his team were developing.
"Pair [the digital lines] up with a great app experience, a great web experience, and then" you start to see an impact to the digital business, which includes mobile and delivery orders, Niccol said.
Those gains are real: Chipotle's digital business reached $2.8 billion in 2020.
Since launching its loyalty program tied to its mobile app in March 2019, the rewards program has grown to 20 million members. Through the app, consumers earn rewards and have access to various online-only menu items like the chain's Lifestyle bowls.
Through a partnership with DoorDash, Chipotle also offers delivery through its app as well as quick and contactless order pickup from Chipotle's growing list of more than 180 restaurants outfitted with Chipotlanes.
Resetting culture
Even though Niccol's three-year tenure includes a global pandemic, he said his first year on the job was his most challenging given all the major changes that needed to take place.
He notably moved the company's headquarters from its Denver birthplace to Newport Beach, California, and began hiring leaders that would execute his recovery plan.
"That first year, it was a lot of hiring. Myself, personally, I was interviewing people. I wanted to make sure they were the right culture fit," he said.
Moving the company headquarters, resetting the culture, and hiring the best talent set the stage for moving the brand forward.
"Corporations are only as good as the people they have and the purpose that those people believe in," Niccol said.
One of the first leaders Niccol tapped was Chris Brandt, who used to work with Niccol at Taco Bell. As chief marketing officer, Brandt went straight to work creating campaigns that reminded fans why they loved Chipotle.
In 2019, the company filmed behind-the-scenes footage of Chipotle's kitchens to show the culinary-focused ethos of the business. The campaigns were called "Behind the Foil" as it gave fans a peek of "the heart of Chipotle," Brandt said at the time.
Tressie Lieberman, another former Taco Bell co-worker, came on board as vice president of digital and off-premise. She's elevated Chipotle's digital presence through clever and relevant social campaigns tied to YouTube and TikTok stars. This week, the chain is unveiling a collection of exclusive "quesadilla" crypto art to commemorate the rollout of the new digital menu item.
Niccol said top-notch talent is driving great culture at the brand, and it's his job is to make sure that everyone stays focused.
"I set the deck so that they've got the resources to be great. And I think that's why our culture is working," he said.
