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TABLE OF CONTENTS
I. EXECUTIVE SUMMARY
II. EXTERNAL ENVIRONMENT
III. THE INDUSTRY
IV. THE CLIENT
V. THE PRODUCT, SERVICE OR ISSUE
VI. MARKET SHARE
VII. PROMOTIONS
VIII. COMPETITION
IX. RESOURCES
X. SWOT ANALYSIS
XI. PUBLIC PROFILES
XII. SITUATIONAL ANALYSIS
XIII. CORE PROBLEM STATEMENT
XIV. KEY PUBLICS & MESSAGES
XV. CAMPAIGN GOALS
XVI. CAMPAIGN OBJECTIVES
XVII. PR STRATEGIES & TACTICS
XVIII. CALENDAR & BUDGET
XIX. EVALUATION PLAN
XX. REFERENCES
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I. EXECUTIVE SUMMARY
We are constantly connected. We double-book
our schedules. We want it now, and refuse to
wait. Today, we are a generation who is living
our lives in the fast lane, and not slowing down
anytime soon. With that, we are also looking
for alternatives to food selections that meet the
requirements of our lifestyle. Fast food restaurants
such as McDonald’s, Wendy’s and Burger King are
not cutting it with their processed foods, and as
such, consumers are turning to healthier options
that can keep pace with their non-stop lifestyles.
Chipotle Mexican Grill was an innovator within
the fast-casual dining segment, and was one of
the leaders within the industry. However, due to
a norovirus outbreak in 2015, Chipotle Mexican
Grill has seen a significant decrease in its sales,
revenue and stock prices. In order for the brand to
fully recover, Chipotle Mexican Grill should utilize
the following Public Relations plan, which focuses
to regain consumers trust, create a positive
perception, as well as increase sales for the brand
overall. This plan will seek to achieve the following
goal:
BY JANUARY 2018, THE GOAL IS TO REVERSE
THE DECREASE OF REVENUE AND SALES
REGARDING THE NOROVIRUS OUTBREAK
WITHIN THE CHIPOTLE MEXICAN GRILL
RESTAURANTS BY 20%.
In order to achieve this goal, Chipotle Mexican
Grill will focus on the following three objectives:
increasing positive in store interactions, increasing
social media interaction and engagement, and
increasing visibility of The Chipotle Cultivate
Foundation.
1. IN STORE INTERACTIONS
According to a survey by HelpScout, 78% of
consumers have bailed on a transaction or not
made an intended purchase due to a poor service
SANTORE 1
experience (n.d). Customers buy the experience,
just as much as the brand. By increasing the
amount of positive in-store guest interactions,
this will give consumers something positive to talk
about, rather than the negative publicity that the
news outlets have focused on in recent years. This
will also allow the brand to regain the trust of its
consumers, retain current customers, and create
new consumers.
2. SOCIAL MEDIA
In today’s society, we are constantly connected.
Social media accounts are an important part
of millennials lives. According to a study, 88%
of millennials get their news off of Facebook
(American Press Institute, 2015). This is a
gateway for any brand to connect with, and create
relationships with its consumers.
3. CHIPOTLE CULTIVATE FOUNDATION
By increasing the visibility of The Chipotle
Foundation, Chipotle Mexican Grill will be able to
give back to the communities, as well as creating
positive publicity for the brand.
These three objectives are the key to achieving
the goal of this public relations campaign. This
campaign will allow the brand to further increase
the exponential recovery in midst of the E.coli
outbreak that Chipotle faced in 2015.
II. EXTERNAL ENVIRONMENT
You are what you eat. Unfortunately, for most
Americans, they are not getting the proper
nutrients from the food that they are consuming.
We live in a country where more than two-thirds
of adults, and one-third of children are overweight
or obese (Levi, 2011). What makes fast food so
alluring to consumers in the first place? According
to a study, between 2007 and 2010, the average
family median net worth dropped nearly 40%,
from $126,400 to $77,300 (Oches, 2012). This
significant drop of net worth for families directly
ties into the allure of a cheap means of obtaining
food, and feeding an entire family cheaply. Fast
food also offers a convenience factor over its full
service competitors. Most fast food restaurants
offer various opportunities to engage consumers
within their fast paced lives such as drive-thru’s
and mobile ordering to acquire delicious, greasy
food on-the-go. In 2010, the U.S. Food and Drug
Administration began reforming the food industry,
redefining what ‘healthy’ means, including the
unveiling guidelines for both franchised and chain
restaurantstoincludecaloriecountsontheirmenus
(Amidor, 2013). However, over the last couple of
years the climate has changed drastically within
the food industry, and instead of looking for the
cheap, convenient options of the past, the public
is looking for healthier alternatives. In the wake of
the war against obesity in the United States, the
food industry is revolutionizing its menus in order
to offer the delivery of healthful alternatives at
reasonable prices in order to make healthy food,
easier to access for its public.
According to a study, Nielsen’s 2015 Global Health
& Wellness Survey, which polled over 300,000
individuals online and suggests consumer
mindsets about healthy food have shifted over
previous years, and found that 88% of consumers
within all demographics are willing to pay more
SANTORE 2
for healthier foods (Gagliardi, 2015). By 2017, the
global sales of healthy food products is estimated to
reach $1 trillion (Hudson, 2012). Chipotle Mexican
Grill assisted in (responsibly) raising of the bar for
fast casual restaurants, through adding naturally
raised, non-GMO ingredients to its portfolio.
The reason that Chipotle has been so successful
is because it gives the people a healthy alternative
to the fast food restaurants of the past, at a higher,
yet still affordable price. Chipotle as a brand is
committed to cultivating a better world through
the use of fresh ingredients, humane treatment of
their animals, and organic food options. In 2013,
Chipotle became the first national restaurant chain
to voluntarily disclose the presence of GMO’s
(genetically modified organisms), and in 2015,
became the first to serve food with only non-GMO
ingredients (“Food with integrity,” 2017).
Within its commitment to cultivating a better world,
in 2011, Chipotle Mexican Grill established the
Chipotle Cultivate Foundation in order to extend its
commitment to creating a more sustainable future.
According to CEO and company founder, Steve
Ells, “Delicious affordable food can be produced
without exploiting the farmers, the animals or the
environment. Chipotle has proven this to be true,
but Chipotle is only one small part of the solution.
Our goal now should be to have all food produced
as sustainably as possible” (The Chipotle Cultivate
Foundation, 2017).
III. THE INDUSTRY
The fast food industry is one of the largest
industries in the United States. In 2014 alone, this
industry generated approximately 198.9 billion
dollars, and by 2020, it is forecasted to exceed
223 billion dollars (Statista, 2017).
Restaurant chains such as McDoanld’s, Burger
King, KFC and Wendy’s are rapidly expanding
across the world; however, with the changing
economic and social climate, consumers
began looking for a healthier, more eco-friendly
alternative to the quick service restaurants of the
past. Recently, fast casual restaurants, such as
Chipotle Mexican Grill, Five Guys Burgers and
Fries, Burger 21, and Blaze Pizza have begun
gaining an edge on the top dogs within the quick
service market. Since 1999, the fast casual food
market has grown by 550%, which is more than
ten times the growth seen in the fast food industry
over the same period (Ferdman, 2015).
What separates fast food, from fast casual, from
full-service dining restaurants?
SANTORE 3
Fast-casual restaurants, like their fast food
counterpart, have customers order at the register,
and most offer no table service; however, the
food tends to be of higher quality and prepared
in store, rather than mass-produced like in chains
such as McDonald’s, and relents a higher price tag
(FranchiseHelp, 2017). According to Scarborough
Research, the largest segment of the fast-casual
dining consumers are married, Caucasians,
between the ages of 35 and 54 with no children
(FastCasual, 2006).
IV. THE CLIENT
In 1993, the first Chipotle restaurant opened in
Colorado under the direction of CEO and founder,
Steve Ells (“Our Company,” 2017) and became
one of the first fast casual dining establishments
in the world. Based upon the ideals of “food with
integrity,” Chipotle went on to boast the idea of
food that was natural raised, without antibiotics
and would go on to set a precedent for other fast
casual restaurants across the globe. The ironic
part? Steve Ells had no interest originally in creating
a new fast casual dining establishment, instead,
he had aspirations of owning and operating a
fine dining establishment. He developed the idea
of Chipotle after watching an assembly line of
workers at a local taqueria as a means of funding
his restaurant (Schlanger & Bhasin, 2012). Within
a month of opening, Ells was selling more than
1,000 burritos per day, and a mere two years
later, the second Chipotle Mexican Grill opened in
Colorado (Fundable, 2017).
In 1998, Chipotle found an unlikely investor in
McDonald’s and allowed the chain to grow to
become a burrito empire. Chipotle grew from its
mere 18 stores in 1998, to over 500 in 2005. In
total, McDonald’s invested approximately $360
million in the Chipotle brand before stepping aside
in 2006 to diverge focus from non-core business
restaurants such as Chipotle and Boston Market
(Myers, 2014). The investment from McDonald’s
SANTORE 4
was all that Chipotle Mexican Grill needed to
begin to grow and become a multi-billion dollar,
nationally traded company (CMG).
AofDecember31,2015,ChipotleMexicanGrill,Inc.
operates 1,971 restaurants throughout the United
States, Canada, England, France and Germany
and has expanded to open additional branches
including ShopHouse Southeast Asia Kitchens
and Pizzeria Locale, with over 59,330 employees.
At the end of the 2015 year, Chipotle Mexican Grill
saw a revenue of $4.5 billion, and a net income
of $475.6 million after operating expenses and
taxes (“Annual Report,” 2016). Chipotle became
the first company to begin to disclose non-GMO
ingredients, and then in 2015 became the first
national chain to abolish the serving of non-GMO
ingredients in their restaurants (“G-M-Over it,”
2017).
In 2016, the brand had hoped to further expand its
portfolio to an additional 225-235 stores (“Annual
Report,” 2016); however, at the end of the 2015
fiscal year during the fourth quarter, the restaurant
chain fell upon its most challenging period in
its history due to the unexpected outbreak of
the food-borne illness: E. Coli within its stores.
According to the Centers for Disease Control
and Prevention, as of January 27, 2016 there
were 55 reported infections across 11 states,
resulting in 21 hospitalizations (FDA, 2016). The
norovirus outbreak was devastating to the fast
casual restaurant. In November 2015, Chipotle
Mexican Grill closed 43 of its stores in Washington
and Oregon in response, and only reopened
the stores when they were positive that the food
that they were serving was not contaminated.
The brand worked closely with federal, state and
local government agencies to ensure that robust
food safety was in place, and even closing every
restaurant for a portion of the day in order to deep
clean the stores nationwide (FDA, 2016). During
the fourth quarter of 2015, the brand saw a 6.8%
decrease in revenue, in addition to a decrease of
14.6% in comparable restaurant sales over the
fourth quarter of 2014. The overall net income of
the fourth quarter was $67.9 million, which was a
decrease of 44.0% compared to the previous year
(“Investor Relations,” 2016).
SANTORE 5
V. THE PRODUCT, SERVICE OR ISSUE
Chipotle Mexican Grill offers consumers burritos,
burrito bowls, tacos, salads and chips created
from fresh, high-quality ingredients. Consumers
can build their own burritos, in a construction
line, customizable experience choosing from
six different meats (chicken, steak, barbacoa,
carnitas, chorzos or sofritas), two different types
of rice (white or brown), two different types of
beans (black or pinto), and an array of salsas,
and extras. According to Business Insider, at any
Chipotle restaurant, patrons can enjoy and create
over 65,000 unique menu combinations (Hickey,
2013). Chipotle Mexican Grill upholds their mission
statement of providing “food with integrity” to its
SANTORE 6
consumers at affordable prices. According to the
brand, every choice they make – about who they
work with, what they serve, and what they stand
for – affects the bigger picture: the health of the
planet (“Food with Integrity,” 2017). Chipotle offers
its consumer natural ingredients from farms, rather
than factories. Today, all of the pork that Chipotle
sells in its carnitas comes from hogs raised
naturally on farms, which are allowed to roam
free on farms, without antibiotics or hormones.
The stores themselves seek out locally grown
and sourced produce, in order to support rural
economies, not to mention 40% of their beans are
organically grown (Chicago Gateway Green, n.d).
VI. MARKET SHARE
Chipotle Mexican Grill is considered to be a fast-
casual Mexican style restaurant, and its direct
competition falls in other likeminded chains,
such as Moe’s Southwest Grill, Qdoba and Baja
Fresh; however, when it comes to the share of
the market, Chipotle Mexican Grill also must face
off against larger competitors such as Applebee’s
and McDoanld’s.
According to the United States Department of
Agriculture, the size of the food service industry
supplied approximately $1.24 trillion worth of
food in 2010, and is nearing the size of the food
retailing industry. Both full-service and fast food
restaurants account for about 77 percent of all
away from home food sales (USDA, 2016).
The largest competitor in the food industry is
McDoanlds (MCD) which held 17% of the market
share for fast food in 2015, followed by Yum!
Brands, which owns KFC, Pizza Hut and Taco
Bell with 10.8%. Chipotle Mexican Grill makes up
only a mere 2.2% of the fast food market share
(Statista, 2016).
However, despite its small market share, Chipotle
is a rapidly growing company and was ranked
one of the fastest growing companies in 2015
by Forbes.com (Chen, 2015). While sales have
been decreasing due to the food-borne illness
epidemic, the fall has slowed significantly, and the
brand can begin re-establishing its foothold on the
competition.
SANTORE 7
VII. PROMOTIONS
While you won’t find advertisements from Chipotle
Mexican Grill in any traditional means, such as on
television or on the radio, the brand utilizes digital
tools as its means to an end, in order to differentiate
it from its competition. It gives the opportunity for
the brand to tell its story. According to Chipotle’s
Chief Creative and Development Officer, Mark
Crumpacker, “we deliberately spend less on our
marketing so we can afford these higher-quality
ingredients.
That’s essentially the main marketing benefit
to our customers” (Wohl, 2015). Despite their
spending less on marketing, the non-traditional
means to their advertising has not come without
success. Two of the major promotional campaigns
that Chipotle has created to influence an increase
of business is their annual Boorito campaign, as
well as their Chiptopia campaign that took place
during the summer of 2016.
SANTORE 8
The Boorito campaign was created in 2000, and
encourages customers to dress up in Halloween
costumes.
The treat? Any consumer dressed in a costume
would originally receive a $2 burrito on Halloween.
While the price has risen, due to an influx in
ingredients, over the last four years through
Boorito, Chipotle has raised over $4 million to their
Chipotle Cultivate Foundation (Arnold, 2016).
The second, Chiptopia, was birthed in the summer
of 2016, in an attempt to regain patronage after the
outbreak of a food-borne illness in its restaurants.
Chiptopia became a rewards program, offering
consumers a 33% return on their purchases of an
entrée at the restaurant. For every four burritos a
customer would purchase, they would receive one
free, and that’s not where the prizes stopped.
The chain relinquished additional prizes for
customers who reached a specific prize level
(mild, medium and hot) such as an additional free
entrée, free merchandise and the biggest prize:
Chipotle meal catering for a party of 10, a $240
value.
In October, the chain announced that 85,000
Chiptopia members qualified for the largest prize,
and as a result, the brand relinquished over $20
SANTORE 9
million worth of free food to its customers (Fox
News, 2016). Did the promotion meet its target?
Or did it fall short?
According to an article by Business Insider, the
campaign did not address the largest issue to the
brand: company perception (Taylor, 2016).The
largest issue with Chipotle’s rewards program,
Chiptopia, was that it would not be sustainable for
the brand long-term, and it failed to capture the
attention of the casual consumer.
What’s next?
Chipotle has been creating unique, non-traditional
media videos in promoting its mission statement
of food with integrity.
These advertisements will continue to tell the story
of the brand, in light of their recent allegations,
and draw in consumers through the creativity and
innovation that originally brought them to the top
of the fast-casual market.
new evolutionary marketing tools that Moe’s is
utilizing is augmented reality, or AR. The brand
built an application aimed at restaurant artwork,
and gives guests the opprotunity to bring Moe’s
fresh ingredients to life.
In 2015 alone, the brand opened 68 new
restaurants, and sold 186 new franchise deals
(Tweet, 2006). In 2013, the brand saw a 12%
increase in sales over the previous year with
$526 million in system wide sales. In 2016, Moe’s
Southwest Grill unseated Chipotle as the top fast
casual restaurant, according to Harris Polls (Harris
Polls, 2016).
2. QDOBA MEXICAN EATS
Qdoba Mexican Eats
was founded in 1995 in
Denver, Colorado. The
brand began franchising
in 1997, and then was
acquired by Jack in the Box, Inc. in 2003 for $45
million (Sweeney, 2003). As of 2016, Qdoba is a
mixture of both company owned, and franchised
stores, and currently has 332 franchised locations,
and 367 company owned, bringing the grand total
to 699 total locations across the United States and
Canada. In the 2014 fiscal year, the brand saw
restaurant sales of approximately $338 million
within its company owned stores (Statista, 2017).
SANTORE 10
VIII. COMPETITION
Fast-casual restaurants are becoming more and
more popular within the food service industry,
and in 2015, became the fastest growing market
segment at 10.4% increasing its market by $3.4
billion in one year (QSR, 2016). The fast-casual
restaurant has become more appealing due to a
consumers yearning for healthier alternatives to
fast food giants such as McDonald’s, who until
recently, did not offer healthy choices. Chipotle
Mexican Grill falls within the market segment of
Fast-Casual Mexican dining. The brand’s largest
two competitors are Moe’s Southwest Grill and
Qdoba Mexican Eats.
1. MOE’S SOUTHWEST GRILL
Moe’s Southwest Grill was
founded in Atlanta, Georiga
in 2000, and markets itself
as a ‘fun-and-engaging
casual restaurant’ (Moe’s
Southwest Grill, 2017). The
store offers consumers over
20 different ingredients, as well as low-calorie
and vegetarian options. In 2007, the brand was
purchased by FOCUS Brands Inc., which is the
parent company to Auntie Anne’s, Cinnabon,
Schlotzsky’s, Carvel, and McAlister’s Deli, and is
represented in over 60 different countries. Moe’s
is a constantly growing company, due largely to
their franchising.
Moe’s Southwest Grill’s marketing strategy plays
a focus to its digital advertising. According to
Moe’s President, Bruce Schroder, “our industry
is going through a great deal of transformation.
Fast causual is in the same over-supply situation
that QSR encountered years ago. We’re no longer
the best kept secret, so we have to work harder
to differentiate as exciting new options enter the
market every day” (Cansler, 2016). One of these
IX. RESOURCES
SANTORE 12
Prior to the 2015 E.coli outbreak, Chipotle Mexican
Grill was a brand on the rise. In 2015 alone, the
brand saw $4.5 billion in revenue (“2015 Annual
Report, 2016); however, due to the outbreak the
brand has seen a substantial loss of sales and
revenue across the board. While the brand is slowly
recovering, social media is in part responsible for
the difficult uphill battle. News travels much faster
than it did in the past, and can now reach a larger
audience of people. Chipotle faces the challenge
of breaking free of the negative clutter, and
imposing itself in a new light. With the outbreak,
the chain saw a distinguished decrease in sales.
One of the largest obstacles that the chain faces
is overcoming their public relations nightmare, and
re-establish trust with their consumers.
X. SWOT ANALYSIS
SANTORE 13
1. STRENGTHS
Fast-casual restaurants such as Chipotle Mexican
Grill, Panera Bread, and Jersey Mike’s Subs are
leaving a mark on the food industry. With $4.5
billion in sales in 2015, Chipotle Mexican Grill falls
right behind Panera Bread as the industry leader
of fast-casual dining (“Annual Report,” 2016).
Chipotle Mexican Grill revolutionized the industry,
becoming the first national food chain in the United
States to completely cut out the use of GMO’s in
their food, and working with local farms in order
to benefit rural economies, and provide their
consumer with naturally raised, organic options for
their dining options. In 2011, Chipotle established
the Chipotle Cultivate Foundation, and has since
raised over $3 million to organizations committed
to creating a better world through food. This money
has gone to fund initiatives that support sustainable
agriculture, family farming and culinary education
(Cultivate Foundation, 2017).
Chipotle Mexican Grill is a highly recognized,
and profitable brand in the United States, and
is a brand that is expanding rapidly across the
country. In 2015, the brand hosted a portfolio of
over 2,000 stores, and in 2016 aimed to expand
to an additional 225-230 stores across the
United States (“Annual Report,” 2016). With over
2,000 unique restaurants, none of the above are
franchised. According to Chris Arnold, Chipotle’s
Communications Director, “we believe that
companies franchise for two reasons, either they
need money to grow or they need operators to run
restaurants” (Taylor, 2014). Chipotle doesn’t need
either, and by choosing to not franchise, they are
able to retain the standards of their brand and
their commitment to providing the best, highest
quality ingredients. After being plagued with
negative publicity due to faulty advertising, the
burrito chain stepped away from the marketing
companies, and decided to bring their advertising
in-house. According to Chipotle’s Chief Marketing
Officer, Mark Crumpacker, “Chipotle was built
on word-of-mouth marketing. We’re focused on
reigniting word-of-mouth marketing, rather than
big advertising campaigns” (Zmuda, 2010).
The brand has never utilized television marketing,
but rather, focused on telling its brand story through
digital marketing. In one advertisement, Chipotle
retells the story of young Ivan and Evie, as they
grow old, become immersed in a thirty-year-
long fast food rivalry, and eventually overcoming
their rivalry due to their discovery of what really
matters: their love for real food, and each other (“A
Love Story,” 2017). In 2013, the restaurant chain
announced that it only spent 1.4% of its revenues
on advertising (Jones, 2014).
2. WEAKNESSES	
While Chipotle Mexican Grill has a large portfolio in
the United States, its global impact is significantly
smaller, and has just recently begun to expand to
Europe. Out of the chain’s 2,100 stores, only 27
of them are located outside of the United States
(Maxfield, 2016).
Competitors such as McDoanld’s already have
a large foothold in the European market with
approximately 8,000 locations; however, for the
burrito chain, Europe offers a large expansion of
its market, and market share. While Chipotle does
offer over 65,000 unique creations when it comes
to their burritos, their menu has stayed remotely
the same since the restaurants induction in 1993.
In recent years, the brand has introduced new meat
options to the mix in the face of chorizo’s, which is
a mixture of spicy chicken and pork sausage, and
sofritas, an organic tofu.
In the four months that chorizo’s have been
introduced to the public, their popularity has grown
immensely, and now make up 7% of all entrée
sales at Chipotle restaurants (Watrous, 2016).
SANTORE 14
SANTORE 15
With the addition of these two menu items, the
base items are still the same (burrito, burrito bowl,
salad or tacos), while other chains such as Moe’s
Southwest Grill offers a much larger selection
(burritos, jr. burritos, tacos, quesadillas, nachos,
salads, stacks and burrito bowls).
In the wake of the E. coli outbreak, the brand itself
is still in the midst of overcoming the rapid decline
of comparable restaurant sales. Even a year after
the norovirus sent 21 consumers to the hospital,
Chipotle is still facing a difficult road ahead of
them. In October 2015, Chipotle stock prices were
at an all-time high – and were being traded at $750
apiece; however, in January of 2017, a little over a
year after the infectious incident, stock is down to
$400 apiece.
The E. Coli outbreak was just the tip of the
iceberg, in July of 2016, Chipotle executive, Mark
Crumpacker as arrested on seven counts of
cocaine possession only to be reinstated by the
burrito chain in September. In August, the brand
faced a class action lawsuit accusing the chain of
wage theft (Gillespie & Long, 2016). In September
2016, the brand also was facing a sexual assault
lawsuit from a former employee, and teen was
awarded $7.65 million by Chipotle Mexican Grill
due to the allegations (Long, 2016).
3. OPPROTUNITIES
With the past E. coli outbreak in mind, one of
Chipotle’s largest opportunities for growth is to
regain its consumers trust. According to an article,
Chipotle was successful in regaining its loyal
customers after the outbreak, this segment only
makes up for 25% of its business, the other 75%
of casual customers still feel the weight of the
epidemic (Taylor, 2016).
The brand is already battling the negative publicity
through the creation of rewards programs, such
as Chiptopia, an incentive program that rewards
that incites return business. While Chiptopia was
a huge success for the chain in terms of rewarding
loyal consumers with free burritos, it was extremely
expensive for the chain, granting consumers a
33% return rate for their money (Taylor, 2016). In
comparison, coffee giant, Starbucks only offers
consumers an 8% return on their rewards program.
This offers a great opportunity for Chipotle to
expand their rewards program, and create a larger,
more loyal consumer base.
Another opportunity for growth would be for
Chipotle Mexican Grill to expand its menu options
to compete with direct competitors such as Moe’s
Southwest Grill and Qdoba Mexican Grill. These
restaurants offer the consumer a larger amount
of options, which makes it more appealing to
the everyday consumer. Currently, the current
demographicthatChipotleMexicanGrillistargeting
with their advertising is millennials, the generation
born between 1982 and the early 2000’s.
With quirky branding, and social media accounts
that allow consumers to engage with the brand.
With this in mind, the largest consumer of fast-
casual food in general are dual income families,
with no kids.
Rodger Roeser, vice president of Justice & Young
Advertising and Public Relations stated in an
interview|: “Fast-casual consumers are educated,
health conscious and are really big fans of the
outdoors. These consumers are overwhelmingly
white — 90 percent — and are split down the
middle in terms of gender, and 38 percent own a
home worth $100,000 to $199,000” (FastCasual,
2006) While millennials have overtaken baby
boomers as America’s largest generation to date,
it is important to reach groups outside of this
window.
As the target market expands, the brand itself
needs to expand as well. Chipotle is currently
in the process of growing globally, and with the
addition of 13 stores overseas, it’s on its way to
becoming a global entity. The brand is working on
building brand recognition, and brand loyalty in the
European market, and is a large opportunity for
growth within the chain.
SANTORE 16
4. THREATS
The largest threat to Chipotle is that of public
perception. With the E. Coli outbreak and lawsuits,
the brand itself must overcome the challenges,
and continue on the path of recovery. With content
going viral, the brand must overcome negative
publicity related to the outbreak, and break free
of the clutter in order to get their message of ‘food
with integrity’ to its publics.
The brand also faces the imminent threat of
extremely strong direct competitors such as Qdoba
Mexican Grill, Moe’s Southwest Grill and Baja
Fresh Mexican Grill. For three years, 2012-2015,
Chipotle topped Harris Poll’s as the top fast-casual
Mexican restaurant; however, after the food-safety
scares, and norovirus outbreak, the chain was
unseated by competitor Moe’s Southwest Grill
(Harris Poll, 2016).
2016 also saw the decline of consumers eating
out, and spending money in general, due to
uncertainties in the economy. According to the
National Restaurant Association’s Restaurant
Performance Index, the beginning of 2016 saw
steady decline in sales and spending from its
consumers (Chamlee, 2016).
The brand itself sees the imminent threat of a
change of customer tastes, and preferences,
which impact the entire food service industry. For
example, in light of Chipotle’s wide spread food
safety incidents of 2015, consumers could choose
to steer away from freshly-prepared foods (“2015
Annual Report,” 2016).
SANTORE 17
While Chipotle’s promise to provide farm fresh,
non-GMO ingredients is alluring to a multitude
demographics, with the key demographic within
Chipotle’s market segment is that of millennials.
Chipotle utilizes non-traditional media to reach out
to the younger demographic, and focuses on its
message of organic farming. Millennials, which
are the generation that was born between 1980
and the mid-2000’s are the largest generation
in the United States, and represented one-third
of the overall population in 2013 (The Council
XI. PUBLIC PROFILES
of Economic Advisors, 2014). In the According
to the Council of Economic Advisors, millennials
value the role that they play in their communities,
and yearn to become leaders within their unique
communities (2014). The role that millennials
choose to take in their communities correlate to the
choices that they make in relations to the food that
they intake. Chipotle offers its demographic means
of supporting an organization that provides ethical
treatment of animals, non-antibiotic farming, and
organic sustainability.
Chipotle Mexican Grill stands apart from its
competition in regards to its mission of providing
quality ingredients, in a fast-casual dining
experience; however, with the recent outbreak of
norovirus E.coli, the brand faces a multitude of a
public relations nightmare. Over the fourth quarter
of 2015, Chipotle saw a decrease 6.8% decrease
in revenue (“Investor Relations,” 2016).
Chipotle’s scare with foodborne illnesses literally
scared away business, and while the company
XII. SITUATIONAL ANALYSIS
is on the road to recovery, the brand’s sales and
stock are still fighting to get back to the point that
they were prior to the fright. The brand needs to
overcome the negative image that it has been
painted in by the media and regain its consumers
trust. The brand itself speaks about their quality
ingredients, and in this regard, they failed its
public, and they failed to uphold their own food
safety standards. The brand needs to uphold their
standards by showing their public that their food is
safe once again.
SANTORE 18
Due to the recent outbreak of foodborne illnesses within their restaurants, Chipotle
Mexican Grill has seen a significant decrease in revenue, and sales across the
board.
XIII. CORE PROBLEM STATEMENT
SANTORE 19
Three key publics have been chosen in order
to push the recovery of the brand. Prior to the
outbreak of foodborne illnesses, Chipotle Mexican
Grill saw $4.5 billion in revenue; with the public
relations nightmare that was embodied, the brand
saw a substantial loss of sales and revenue
across the board. Within this campaign, the brand
will be targeting the following publics: millennials,
families, and Chipotle’s shareholders. We believe
that these three key publics will be the key to
unlock the recovery of the brand in order to re-
establish trust with its consumers.
1. MILLENNIALS
As of 2015, millennials have overtaken the baby
boomer generation to be the largest generation in
American history with according to the U.S. Census
Bureau, 75.4 million people within the demographic
and are made up of those born between 1980 and
mid-2000. With the number constantly growing
due to immigration, the U.S. Census Bureau
predicts that the number of millennials will grow
to a projected 79.2 million by 2050 (Fry, 2016).
Millennials are not just the largest generation, but
they are also the most diverse compared to their
predecessors, more educated, less religious, and
slower to settle down than previous generations
(Pew Research Center, 2010).
XIV. KEY PUBLICS & MESSAGES
SANTORE 20
This generation poses to be the first ‘always
connected’ generation, with cell phones and
their social media accounts practically within an
arm’s reach 24/7. According to a survey, 93% of
millennials admit to using their cell phone while in
bed, 80% while using the restroom, and 43% while
stopped at a red light (Saiidi, 2015). While this
generation is extremely connected, millennials as
a whole are also more receptive to change, and
are significantly more likely to become engaged
within their communities over other, previous
generations, and push to become leaders within
their societies (The Council of Economic Advisors,
2014).
Millennials are not only redefining the pre-
determined lifestyles of their predecessor
generations, they are also redefining what the
word ‘healthy’ means. While previous generations
were busy counting calories, millennials are much
more concerned with food being considered fresh,
less processed and with fewer artificial ingredients
(Lutz, 2015).
The roles that millennials choose to play within their
communities, directly correlate to their choices
when it comes to the food that they eat. Chipotle
Mexican Grill offers its consumers the benefits of
supporting an organization that promotes ethical
treatment of animals, non-antibiotic farming, and
organic sustainability. While the cost of dining
at a fast-casual restaurant is slightly higher than
that of fast-food restaurants such as McDoanld’s,
SANTORE 21
Wendy’s and Burger King, according to Fortune,
millennials are willing to “pay a little more for
something they recognize as better” (Kell, 2015).
The largest part of Chipotle’s demographic is
that of millennials, and at roughly one-third of
the population, this group holds $1.3 trillion in
spending power (McGrath, 2014).
Millennials are a large group that have the ability
to push a brand to success, or cripple a brand.
With Chipotle’s recent public relations nightmare,
the brand needs to engage with its largest
demographic in order to continue to grow, and
thrive as a brand. It is vital to the recovery of the
brand to convince this key public that the food that
they are purchasing is safe, as well as healthy.
1. DESPITE THE OUTBREAK OF NOROVIRUSES,
CHIPOTLE MEXICAN GRILL HAS REFORMED ITS
SAFETY STANDARDS, AND IS COMMITTED TO
PROVIDING ‘FOOD WITH INTEGRITY’ THAT IS
SAFE FOR ITS CONSUMERS.
Chipotle Mexican Grill’s recovery is complacent to
the updating of their safety policies, and ensuring
that an incident like the 2015 E.coli outbreak
never happens again. In 2016, the brand took
the following steps to ensure the safety of their
consumers:
• Introducing new safety protocol, including
the blanching of avocados, citrus’, and onions
before being used (Galarza, 2016).
• Implementing bar codes for each food item,
allowing traceability to its source (“Open Letter,”
2017).
• Increased store-audits by in-house
management, and third party inspectors.
(Galarza, 2016).
• Enhancing internal training procedures in
order to ensure Chipotle’s high standards of
food safety, and food handling (Business Wire,
2016).
2.CHIPOTLEMEXICANGRILLISCOMMITTEDTO
PROVIDING QUALITY, HEALTHY INGREDIENTS
TO ITS CONSUMERS.
Chipotle Mexican Grill’s mission statement is
to provide its consumer with ‘food with integrity.’
Since its founding in 1993, Chipotle Mexican Grill
has boasted the idea that food, naturally raised
without antibiotics is a much better alternative to
the processed alternative that its competition has
to offer.
• In 2015, Chipotle Mexican Grill became the
first chain to completely abolish the use of
GMO’s (Genetically Modified Organisms) in its
restaurants (“Food with Integrity, 2017).
• A study by researchers at Washington State
University showed that between 1996 and
2011, the use of pesticide and herbicides
increased by more than 400 million pounds
as a result of GMO cultivation (“G-M-Over it,
2017).
• Chipotle believes that animals that are raised
outdoors without the use of nontherapeutic
antibiotics, which are allowed to freely roam
are happier, and healthier than those raised
in confinement. The brand only works with
suppliers who will hold their high standards of
animal welfare (“Food with Integrity,” 2017).
• Chipotle Mexican Grill’s stores seek out locally
grown and sourced produce, which aides in
supporting local economies (Chicago Gateway
Green, n.d.).
• 40% of Chipotle’s beans are organically grown
(Chicago Gateway Green, n.d.).
3. CHIPOTLE MEXICAN GRILL IS DEDICATED
TO CULTIVATING A BETTER WORLD THROUGH
THE CHIPOTLE CULTIVATE FOUNDATION, AND
PROMOTING HIGHER STANDARDS OF ANIMAL
WELFARE, SUPPORT OF RURAL ECONOMIES
AND SUSTAINABLE FARMING.
The Chipotle Cultivate Foundation supports local
economies through investing in local farms and
education and believes that “delicious, affordable
food can be produced without exploiting the
farmers, the animals or the environment” (The
Chipotle Cultivate Foundation, 2017).
• The Chipotle Cultivate Foundation provides
resources for farmers, and since its inception
it has contributed $3 million to likeminded
organizes who are committed to cultivating a
better world (The Chipotle Cultivate Foundation,
2017).
• The Foundation contributed $2 million to help
fund initiatives that support stainable agriculture,
family farming, and culinary education (The
Chipotle Cultivate Foundation, 2017).
• The number of family farms have plummeted
nearly 40% over the last 50 years, accounting
for only 16% of the food produced of total farms
(USDA, 2010) – Chipotle supports local farms
by seeking out locally grown produce.
2. FAMILIES
What exactly is a family? According to Business
Dictionary, a family consists of a social unit of
two or more persons related by blood, marriage
or adoption having a shared commitment to the
mutual relationship (Business Dictionary, 2017).
This idealogy goes beyond the traditional idea
of a family being parents, and children and also
embodies the lifestyle of DINK’s, or dual-income,
no kid families. Between the years of 2007 and
2010, the average family’s median net worth
dropped nearly 40%, from $126,400 to $77,300
(Touryalai, 2012).
This significant decrease of net-worth directly
relates to the allure and consummation of fast,
cheap alternatives. According to a study, fewer
families have time to eat together due to work,
school, sports, ample extracurricular activities
and conflicting busy schedules (Ensle, 2007).
According to Ensle, the food industry as a whole
is under pressure to provide healthier foods;
however, they must too be convenient, easy to
prepare, and be able to be ready on the table and
eaten within a few minutes (2007).
While fast-casual restaurants such as Panera
Bread, Chipotle Mexican Grill, and Five Guys
Burger and Fries are typically more expensive than
its fast food predecessors (on average $10-$13
per person), these restaurants do offer healthier
options for its consumers. According to Neilson’s
2015 Global Health and Wellness Survey, 88% of
consumers are willing to pay more for healthier
options (Gagliardi, 2015). Families are eating out
more, and like their millennial counterparts, are
looking for a healthier way to do so. According to
QSR Magazine, 29% of families are eating out
multiple times per week (QSR Magazine, 2013).
What Chipotle Mexican Grill needs to focus on is
creating a healthy relationship with families, allow
them to become part of their norm by engaging,
and reassuring them that they provide safe, healthy
food compared to the competition, and can easily
fit into their busy lifestyles.
1. CHIPOTLE MEXICAN GRILL OFFERS
HEALTHIER FOOD OPTIONS FOR FAMILIES ON
THE GO.
SANTORE 22
While a burrito from Chipotle may have more
calories than a Big Mac from McDoanld’s, it is
overly perceived by its public to be healthier. The
ability for consumers to customize their meal in
front of the consumer, is something that gives
Chipotle Mexican Grill the competitive edge over
its competition.
• According to Business Insider, at any Chipotle
restaurant, consumers can create over 65,000
unique menu combinations (Hickey, 2013).
Consumers can pick and choose the ingredient
make-up of their burritos.
• Chipotle Mexican Grill offers both online and
mobile ordering, which allows consumers to
avoid the lines in the stores. Digital sales make
up 5% of total sales, and rose 40% last year
(Wahba, 2015).
• The brand sources their ingredients from local
farms, rather than utilizing factories as a means
to produce their materials. Chipotle’s meat is
raised naturally on farms, rather than cooped up
in a cage, and is free of antibiotics (“Food with
integrity,” 2017).
2.CHIPOTLEMEXICANGRILL,ANDOTHERFAST-
CASUAL DINING EXPERIENCES OFFER A GREAT
ALTERNATIVE TO FAST FOOD RESTAURANTS
SUCH AS MCDONALD’S, WENDY’S, AND
BURGER KING.
Fast-casual style dining is growing at an alarming
rate. In 2015, sales grew 5.7% globally, improving
over the previous year by 5.3%. Fast-casual
dining was the strongest growing segment across
the food industry at 10.4%, increasing USD $3.4
billion from 2014 to 2015 (QSR Magazine, 2016).
• Consumers are shifting their dining preferences,
and are looking for healthier options, and the
dining out culture is looking for more modern,
premium, casual and social experiences (QSR,
Magazine, 2016).
• Fast-casual dining experiences offer the benefit
of no wait staff, while retaining the casual dining
atmosphere of a full-service dining experience.
• Chipotle offers its consumers fresh, non-GMO
ingredients, which is healthier than the overly
produced meats that fast-food restaurants such
as McDonald’s offers.
3. DESPITE THE E.COLI OUTBREAK, CHIPOTLE
MEXICAN GRILL HAS CORRECTED, AND
REFORMED ITS SAFETY STANDARDS FOR FOOD
HANDLING.
Chipotle Mexican Grill believes in cultivating a
better world through its use of fresh ingredients;
however, in 2015, the chain experienced a major
setback with a norovirus outbreak. The chain too
major steps to correct the situation, and the food in
its stores are once more safe.
SANTORE 23
• Days after the norovirus outbreak, Chipotle
Mexican Grill closed 43 stores in the affected
states in order to contain the epidemic. 38% of all
victims were hospitalized due to the foodborne
illness; however, there were no fatalities. The
chain only opened the closed restaurants once
it was sure that the food once more met their
standards of food safety (CDC, 2016).
• Chipotle Mexican Grill announced, during
a companywide meeting, that they would be
creating a $10 million program that would assist
local food suppliers adhere to the new safety
guidelines (Barnett, 2016).
• The company also announced that it would be
providing its employees with fully paid sick days
to ill employees, who are now required to stay
home an additional five days after symptoms
disappear (Barnett, 2016).
3. SHAREHOLDERS
Shareholders are an imperative part of any
publically traded brand, and in return they gain
partial ownership of the brand in question.
Shareholders are uniquely situation, within
Chipotle and many other brands, in the ideals that
they are looking out for the best of the company.
They want the brand to succeed in order for their
own financial gain. As the brand grows, so does
their income. In 2015, Chipotle’s shareholders had
a total equity of $2.1 billion invested in the brand,
which was over a $100 million over the previous
year (“Annual Report,” 2016).
In light of the 2015 norovirus outbreak, Chipotle
Mexican Grill saw a second public relations
nightmare, this time coming from inside the
company. 2016, the brand saw a lawsuit from
its own shareholders due to insider trading, and
stated that the board of trustees acted for their
own good, rather than the good of the brand.
Former Co-CEO Marty Moran sold $107.7 million
worth of stock at its inflated prices, based on
insider information (Northrup, 2016). With the
foodborne illness outbreak of 2015, Chipotle saw
a significant decrease in their stock. Regaining
the trust of its investors is an important part of
Chipotle’s recovery, which is what makes this such
a vital key public of this campaign.
1. CHIPOTLE MEXICAN GRILL IS ON THE ROAD
TORECOVERYAFTERTHERECENTFOODBORNE
ILLNESS OUTBREAK.
Despite the falling stock prices, and the decreasing
revenue and sales company wide, Chipotle
Mexican Grill is beginning to slow their fall, and
regain their edge on the competition. With the
various forms of communication available to its
consumer, unfortunately for Chipotle the road
ahead to recovery proves to be a long, but not
impossible road to traverse.
• Other competitors, such as Jack in the Box
and Taco Bell were able to recover from similar
situations, and actually became more profitable
after a rebranding (Cook, 2016).
• Chipotle saw a 5% increase at $414.84 rise
in their shares of stock in December 2016
(Ramakrishnan & Baertlein, 2016).
• Same-store sales in December 2016 grew
14.7% for same-store sales, compared to
30% drop earlier in the year (Ramakrishnan &
Baertlein, 2016).
SANTORE 24
SANTORE 25
2. FAST-CASUAL RESTAURANTS, SUCH AS
CHIPOTLE MEXICAN GRILL, ARE PART OF THE
LARGEST GROWING MARKET SEGMENT IN THE
FOOD INDUSTRY.
The fast-food industry is one of the largest
industries in the United States, and in 2014 alone,
the industry generated approximately $198.9
billion in revenue, by 2020 it is forecasted to exceed
$223 billion (Statista, 2017). The fast-casual
market segment is no different, and is constantly
increasing and putting pressure on the top dogs
within the food industry. Both full-service and fast-
food restaurants account for approximately 77%
of all away from home food sales (USDA, 2016).
• Since 1999, the fast casual food market has
grown by 550%, which is more than ten times
the growth seen in the fast food industry over
the same period (Ferdman, 2015).
• According to Euromonitor, fast-casual grew
at 10.4%, increasing $3.4 billion from 2014 to
2015 (QSR Magazine, 2016).
• Despite the norovirus outbreak, Chipotle
Mexican Grill saw its most profitable year in
2015, with a comparative restaurant sales
increase of 5.5%, and an increase of 25.6%
increase in diluted earnings per share through
the first nine months (“Annual Report,” 2016).
3. CHIPOTLE MEXICAN GRILL HAS TAKEN
EXTENSIVE STEPS TO ENSURE A HIGHER LEVEL
OF FOOD SAFETY IN ITS RESTAURANTS.
Chipotle Mexican Grill has taken multiple steps
in order to ensure that the foodborne illnesses
that caused outrage of its publics in 2015 never
happens again. The brand revolutionized their
food safety standards.
• Chipotle Mexican Grill is now working closely
with its suppliers in order to ensure that the
ingredients that they’re receiving are safe prior
to reaching their restaurants (“Food Safety,”
2017).
• The brand devised a safety council made up of
food safety experts dedicated to improving the
food safety program at Chipotle, headed under
the leadership of Dr. James Marsden (“Food
Safety,” 2017).
• Innovated a new traceability system, in order
to track the ingredients on all the way from the
farms to their restaurant, which allows the chain
to respond quickly to a supply issue (“Food
Safety,” 2017).
BY JANUARY 2018, THE GOAL IS TO REVERSE
THE DECREASE OF REVENUE AND SALES
REGARDING THE NOROVIRUS OUTBREAK
WITHIN THE CHIPOTLE MEXICAN GRILL
RESTAURANTS BY 20%.
With the E.coli outbreak, the restaurant chain saw
a large 6.8% decrease of revenue, and 14.6%
XV. CAMPAIGN GOAL
SANTORE 26
decrease in comparable sales (“Annual Report,”
2017). The key to increasing the number of in-store
sales, is to change the public’s opinion of the store
overall. In order to regain a favorable means, the
brand should foster meaningful relationships with
its clients both in-store and through social media,
and promote the Chipotle mission of serving food
with integrity.
SANTORE 27
60 DAYS FROM THE BEGINNING OF THIS
CAMPAIGN, INCREASE IN-STORE POSITIVE
GUEST INTERACTIONS BY 25%.
After the E.coli scare, Chipotle Mexican Grill
restaurants turned its focus on food safety, and
began neglecting customer service. While the
brand’s attention to safety is important in regaining
its position as the top fast casual Mexican
restaurant, Chipotle Mexican Grill needs to turn its
attention to raising its guest service scores across
the board in order to regain its public’s trust.
The chain needs to make its focus on what’s
important: its customers. The three largest
complaints within the chain are: long lines, running
out of ingredients, and untidy dining environments.
The happier the customer, the more likely they are
to return.
90 DAYS FROM THE START OF THIS CAMPAIGN,
AIM TO BOAST POSITIVE SOCIAL MEDIA
ENGAGEMENT AND INTERACTIONS BY 20%.
Chipotle Mexican Grill hosts a large following on
social media, including 3.1 million followers on
Facebook (@chipotle), 830 thousand followers
on Twitter (@chipotletweets), and 424 thousand
followers on Instagram (@chipotlemexicangrill).
Chipotle does a lot of great engagements with
consumers over social media; however, there
still is a lot of negativity regarding the customer
service, and negative publicity. In order to answer,
the brand should attempt to reach consumers and
resolve their issues.
XVI. CAMPAIGN OBJECTIVES
OVER THE NEXT 6 MONTHS, INCREASE
VISIBILITY OF THE CHIPOTLE CULTIVATE
FOUNDATION BY 50%.
The Chipotle Cultivate Foundation is a great tool
for the brand, and offers the opportunity to give
back to the community. Chipotle Mexican Grill as
a whole hasn’t established definitive social media
accounts for their foundation, and thus, visibility is
extremely low.
The ideals of the foundation which supports
agriculture, family farming, culinary education,
and innovations that promotes better food, is key
to the success and recovery of the chain. To date,
the Foundation has given thousands of dollars to
trusts, and societies that align with their mission
such as the Nature Conservatory, International
Rescue Committee, FarmAid.org, among many
others.
XVII. PUBLIC RELATIONS STRATEGIES & TACTICS
Chipotle Mexican Grill has three key publics that
they will target with this campaign. Those three
are: millennials, families, and shareholders. These
key publics will be instrumental in the success of
this public relations campaign and reaching the
overall goal of reversing the decline of sales due
to the foodborne illness crisis that the company
faced. The following strategies and tactics will
seek to convince its consumers that the food that
the brand is serving is once again safe, and the
company is on the road to recovery.
1.INTHENEXT6MONTHS,INCREASECONSUMER
ENGAGEMENT AND TRANSPARENCY THROUGH
SOCIALMEDIAACCOUNTSSUCHASFACEBOOK,
TWITTER, AND INSTAGRAM IN ORDER TO
REGAIN CONSUMER TRUST BY 60%.
Chipotle Mexican Grill has been struggling to
regain its edge as a forerunner in the fast-casual
industry. Today, we live in a society where news
travels quickly, and misinformation travels even
faster. Chipotle should aim to regain the trust of its
consumers, and push to break free of the clutter
of misinformation to ensure transparency with
its consumers. Social media plays an extremely
important tool in reaching its publics, and
especially within the millennial generation this is
additionally important. Millennials, unlike previous
generations, are not as phased by traditional
advertising, and instead, are looking for ways to
connect with the brand on a personal level, as was
part of the success of Coca-Cola’s ‘Share A Coke’
campaign (O’Connor, 2015).
• Engage with consumers across mediums, in
order to retain current relationships with loyal
millennial consumers, as well as create new
relationships and foster brand loyalty with the
general consumer base.
• Instead of referring customers to a form to
handle and dissipate guest complaints and
SANTORE 28
compliments, utilize social media to provide
guest service in order to retain transparency
with the clients.
• In order to increase transparency with the
brand, and to give the consumer’s the illusion of
directly speaking with the brand, rather than a
random-faceless associate, the brand will stop
replying to guest comments with their names.
• Encourage guests to share positive guest
experiences through social media accounts
utilizing a specified hashtag such as
#ChipotleCompliment, or #BestBurrito. Chipotle
Mexican Grill could share, or retweet the post to
create more community engagement.
• Work closely with influential social media
personnel to promote the Chipotle Mexican Grill
product.
• Team up with websites such as BuzzFeed and
Tasty to create a contest for new products.
2. IN THE NEXT 90 DAYS, INCREASE THE
NUMBER OF POSTS ON SOCIAL MEDIA
ACCOUNTS PROMOTING HEALTHY EATING
HABITS AND INGREDIENTS BY 40%.
Chipotle Mexican Grill prides itself in the idea
of food with integrity, which means providing its
consumers with healthy, and fresh alternatives to
the processed foods of fast food restaurants such
as McDonald’s, Burger King and Wendy’s. One of
the driving factors of a parent’s purchasing of food
is whether or not it will be healthy for their children.
In a study by the Organic Trade Association, in a
surveywheretheysurveyedover1,200households
in the United States with at least one child, found
eight out of 10 American families bought at least
one organic product due to concern about their
children’s health (Organic Trade Association,
2014). Consumers are also more likely to spend
more, if they deem the product to be healthier
(Gagliardi, 2015).
• Create compelling, real life examples of what
their company stands for, rather than using
animated videos, in order to break free of the
clutter, and transform the public’s perception of
the brand.
• Post interviews with those within the
agriculture industry, talking about animal
welfare, and promote Chipotle’s way of life.
• Engage with medical experts about healthy
ways to make your burrito bowl, and give
consumers tips on how to make Chipotle a part
of any diet plan.
• Partner with third-party websites, such
as BuzzFeed and Tasty in order to create
engaging content that will influence consumer’s
perception of the brand.
3. INCREASE THE VISIBILITY OF THE CHIPOTLE
CULTIVATE FOUNDATION BY 30% OVER THE
NEXT YEAR.
Instead of focusing on the challenges that the
brand has faced since the E.coli outbreak of
2015, the brand will aim to direct part of the
attention of the brand to the positive impact that
Chipotle Mexican Grill is making within their local
communities and ecosystems. Since the Chipotle
Cultivate Foundation was established in 2011,
they have raised over $3 million, and donated it to
organizations committed to creating a better world
through food (The Chipotle Cultivate Foundation,
2017). This will aim to gain support from not
only consumers, but shareholders and current
Chipotle employees as well. Employees play a
vital role in the public relations of a brand, and
according to the 2013 Edelman Trust Barometer,
41% of consumers believe that employees are the
most credible source of information regarding a
business (Arruda, 2013).
• Raise awareness of the issues that The
Chipotle Cultivate Foundation is working to
correct within the communities by creating
separate social media accounts for the
foundation.
• Host events across the United States that
promotes sustainable farming, with proceeds
going to the Foundation. Inviting media
channels, executives, shareholders, etc.
• Allocate time during the event for Q&A with
Chipotle executives on the sustainability of
the brand, and promoting the well-being that
Chipotle is fostering within its communities.
• Partner with other brands, and rescues
that are also promoting the well-being of the
environment such as International Rescue
Committee, The Kitchen Community, The
Ecology Center, and Food Corps, in order to
increase visibility of the brand.
4. GAIN A 45% INCREASE OF POSITIVE GUEST
EXPERIENCESWITHINTHECHIPOTLEMEXICAN
GRILL RESTAURANTS WITHIN THE NEXT 9
MONTHS.
Since the 2015 E.coli outbreak, Chipotle Mexican
Grill has been plagued by negative reviews on
social media, as well as a significant drop in its
American Customer Satisfaction Index (ACSI)
score. At Chipotle’s height of popularity in 2015,
the brand saw a ACSI score of 83/100, falling
right behind the leader, Chick-Fil-A with 86/100;
however, after the recent foodborne illness
incident, the brand saw a drastic decrease in their
score, falling 6% to 78/100 (Cox, 2016). Customer
serviceisanimportantfactoronanyrestaurant,and
often first impressions make a lasting impression.
If Chipotle Mexican Grill wishes to overcome the
negative publicity associated with the crisis that
they faced in 2015, they need to turn around their
guest satisfaction within their restaurants.
• Provide guest recovery for any issues
regarding the brand through social media
accounts. Recovery should be on a case by
case basis in order to ratify solutions to poor
guest experiences at various stores.
• Add a prompt on receipts in order to engage
SANTORE 29
with consumers whether they’ve had a positive
or negative experience. This will allow the
brand to understand what they are doing right,
as well as what they can improve on in terms of
guest service.
• Promote mobile ordering as a means of
skipping the long lines during peak hours.
This will also alleviate the main line in the
stores, and essentially create a more efficient
environment for consumers.
• Train associates to provide a higher standard
of guest service, including dealing with guest
recovery in-stores rather than allowing the
situation to elevate to social media accounts.
SANTORE 30
XVIII. CALENDAR & BUDGET
Chipotle Mexican Grill has three key publics
that will be targeted with this public relations
campaign: millennials, families and shareholders.
These key publics will be the key for the brand to
regain its rightful place as the number one fast-
casual restaurant in the perception of its publics.
Chipotle saw a rough couple of years; however,
this plan will begin the long road to recovery to
regain its consumers trust over the next year. This
proposed plan will begin in June 2017, and last
12 months, ending May 2018.The primary focus
of the campaign will be to drive consumers to
change their perception of the brand from negative
to positive after the norovirus outbreak.
SANTORE 31
The entire budget for the campaign will cost the
brand approximately $800,000, which will cover
associate training, video productions, as well as
live events which will be held across the country.
This plan will allow the brand to grow, and regain
its strength against competitors such as Moe’s
Southwest Grill and Qdoba Mexican Eats. While
the brand usually utilizes in-house marketing,
and limits its budget, in order for Chipotle to fully
recover, the brand should splurge its budget in
order to overcome its setbacks.
1. IN THE NEXT 6 MONTHS, INCREASE CONSUMER ENGAGEMENT AND TRANSPARENCY
THROUGH SOCIAL MEDIA ACCOUNTS SUCH AS FACEBOOK, TWITTER, AND INSTAGRAM IN OR-
DER TO REGAIN CONSUMER TRUST BY 60%.
SANTORE 32
2. IN THE NEXT 90 DAYS, INCREASE THE NUMBER OF POSTS ON SOCIAL MEDIA ACCOUNTS
PROMOTING HEALTHY EATING HABITS AND INGREDIENTS BY 40%.
SANTORE 33
3. INCREASE THE VISIBILITY OF THE CHIPOTLE CULTIVATE FOUNDATION BY 30% OVER 12
MONTHS FROM THE BEGINNING OF THE CAMPAIGN.
SANTORE 34
4. GAIN A 45% INCREASE OF POSITIVE GUEST EXPERIENCES WITHIN THE CHIPOTLE MEXICAN
GRILL RESTAURANTS WITHIN THE NEXT 9 MONTHS.
SANTORE 35
XIX. EVALUATION PLAN
CHIPOTLE MEXICAN GRILL’S POSITIVE IN-
STORE INTERACTIONS WITH CLIENTELE
INCREASED 25% BY THE 60 DAY MARK WITHIN
THE CAMPAIGN.
Chipotle Mexican Grill CEO Steve Ells stated
in an interview that he was not satisfied with
the rate of recovery of his restaurant chain, and
he is especially not pleased with the quality of
experience at some of his stores (Turner, 2016). It
is vital for Chipotle Mexican Grill to increase its in-
store guest service experiences in order for them
to fully recover from the foodborne illness crisis.
In order to evaluate whether or not the chain
was successful in increasing positive in-store
interactions, the brand will a series of surveys and
cyberspace analysis. Prior to the beginning of the
campaign, the brand should set a baseline of the
current customer satisfaction. In order to get the
baseline reading, Chipotle Mexican Grill will add
an online survey link to their receipts. To get a
larger amount of the population participating, the
brand will include a raffle prize, which would be
released monthly. Once a baseline is created, the
brand can begin the proposed campaign. After the
60 day mark, the brand will look at the statistics
and compare them to the baseline in order to see
if the brand has improved its guest services in-
store. Some questions that would be asked to the
consumer will include:
1. Have you ever been to a Chipotle Mexican Grill
restaurant prior to today?
2. How would you rate your experience today at
Chipotle Mexican Grill?
3. What is your current perception of the brand?
4. What could we do to improve our service?
5. Would you reccommend Chipotle Mexican Grill
to a friend?
SANTORE 36
Another method of measurement that the brand
will utilize will be cyberspace analysis, where the
brand looks at social media accounts and is based
upon how the brand is portrayed online in terms
of images, reputation, and positioning through
chatter and discussion (Reed College of Media,
2017). Like with the surveys, Chipotle Mexican
Grill will set the baseline prior to the beginning of
the campaign, and then re-evaluate the statistics
after the 60 days allotted. If the brand reaches the
25% increase of positive guest interactions, then
the brand will continue the campaign for another 60
days, and then re-evaluate at the end; however, if
the brand does not meet its quota, then the brand
will look at what changes they can make to the
campaign in order to meet the goal.
CHIPOTLE MEXICAN GRILL’S SOCIAL MEDIA
ENGAGEMENTANDINTERACTIONSINCREASED
BY 20% AMONG KEY PUBLICS 90 DAYS FROM
THE BEGINNING OF THE CAMPAIGN.
Chipotle Mexican Grill has been plagued with
negative interactions through social media, which
does not look favorable for the brand. In order for
the brand to regain the trust of its consumers, it
needs to properly engage them through social
media. While only 41% of millennials use Facebook
every day, the numbers are much higher across
other social media platforms such as YouTube,
SANTORE 37
Instagram, Snapchat and Twitter (Friedman,
2016).
One method that Chipotle can utilize to evaluate
the success of their public relations campaign
pertaining to social media would be through
a social media monitoring program such as
Hootsuite, Keyhole, or Little Bird. These programs
will allow the brand to focus on who their campaign
is reaching, and whether it was successful or not.
With applications such as Hootsuite, the brand
can focus on specific keywords, demographics,
and number of mentions across social media
platforms. This will allow the brand to focus on
increasing both engagement and interactions with
consumers.
AWARENESS OF THE CHIPOTLE CULTIVATE
FOUNDATION WILL BE INCREASED BY 50%
OVER THE NEXT SIX MONTHS.
The Chipotle Cultivate Foundation is a positive
aspect of the brand, and would serve as a great
opportunity for the brand to escape the negative
publicity associated with the issues that the brand
faced in 2015 and 2016. One way to overcome
the negativity that the brand is facing is for the
brand to focus on positive aspects of the company,
for Chipotle, that relies within their foundation. In
order for Chipotle to measure the effectiveness of
their campaign, and whether or not the visibility
of their foundation has been increased, they need
to utilize two different means of measurement.
Chipotle will need to utilize both surveys, as well
as social media analysis. The surveys will look into
the correlation between guests who have heard
about Chipotle Mexican Grill, and if their knowledge
about the foundation influences their perception
on the brand. It will also ask consumers about
whether they knew about the foundation, and if
they know how it benefits their economies. Social
media analysis will allow the brand to focus on what
their consumers are talking about, and if they’re
talking about The Chipotle Cultivate Foundation in
comparison to prior to the campaign’s beginning.
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SANTORE 38
SANTORE 39
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SANTORE 40
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SANTORE 41
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IMC 618 - Chipotle Public Relations Campaign

  • 1.
  • 2. TABLE OF CONTENTS I. EXECUTIVE SUMMARY II. EXTERNAL ENVIRONMENT III. THE INDUSTRY IV. THE CLIENT V. THE PRODUCT, SERVICE OR ISSUE VI. MARKET SHARE VII. PROMOTIONS VIII. COMPETITION IX. RESOURCES X. SWOT ANALYSIS XI. PUBLIC PROFILES XII. SITUATIONAL ANALYSIS XIII. CORE PROBLEM STATEMENT XIV. KEY PUBLICS & MESSAGES XV. CAMPAIGN GOALS XVI. CAMPAIGN OBJECTIVES XVII. PR STRATEGIES & TACTICS XVIII. CALENDAR & BUDGET XIX. EVALUATION PLAN XX. REFERENCES 1 2 3 4 6 7 8 10 11 13 17 18 19 20 26 27 28 31 35 38
  • 3. I. EXECUTIVE SUMMARY We are constantly connected. We double-book our schedules. We want it now, and refuse to wait. Today, we are a generation who is living our lives in the fast lane, and not slowing down anytime soon. With that, we are also looking for alternatives to food selections that meet the requirements of our lifestyle. Fast food restaurants such as McDonald’s, Wendy’s and Burger King are not cutting it with their processed foods, and as such, consumers are turning to healthier options that can keep pace with their non-stop lifestyles. Chipotle Mexican Grill was an innovator within the fast-casual dining segment, and was one of the leaders within the industry. However, due to a norovirus outbreak in 2015, Chipotle Mexican Grill has seen a significant decrease in its sales, revenue and stock prices. In order for the brand to fully recover, Chipotle Mexican Grill should utilize the following Public Relations plan, which focuses to regain consumers trust, create a positive perception, as well as increase sales for the brand overall. This plan will seek to achieve the following goal: BY JANUARY 2018, THE GOAL IS TO REVERSE THE DECREASE OF REVENUE AND SALES REGARDING THE NOROVIRUS OUTBREAK WITHIN THE CHIPOTLE MEXICAN GRILL RESTAURANTS BY 20%. In order to achieve this goal, Chipotle Mexican Grill will focus on the following three objectives: increasing positive in store interactions, increasing social media interaction and engagement, and increasing visibility of The Chipotle Cultivate Foundation. 1. IN STORE INTERACTIONS According to a survey by HelpScout, 78% of consumers have bailed on a transaction or not made an intended purchase due to a poor service SANTORE 1 experience (n.d). Customers buy the experience, just as much as the brand. By increasing the amount of positive in-store guest interactions, this will give consumers something positive to talk about, rather than the negative publicity that the news outlets have focused on in recent years. This will also allow the brand to regain the trust of its consumers, retain current customers, and create new consumers. 2. SOCIAL MEDIA In today’s society, we are constantly connected. Social media accounts are an important part of millennials lives. According to a study, 88% of millennials get their news off of Facebook (American Press Institute, 2015). This is a gateway for any brand to connect with, and create relationships with its consumers. 3. CHIPOTLE CULTIVATE FOUNDATION By increasing the visibility of The Chipotle Foundation, Chipotle Mexican Grill will be able to give back to the communities, as well as creating positive publicity for the brand. These three objectives are the key to achieving the goal of this public relations campaign. This campaign will allow the brand to further increase the exponential recovery in midst of the E.coli outbreak that Chipotle faced in 2015.
  • 4. II. EXTERNAL ENVIRONMENT You are what you eat. Unfortunately, for most Americans, they are not getting the proper nutrients from the food that they are consuming. We live in a country where more than two-thirds of adults, and one-third of children are overweight or obese (Levi, 2011). What makes fast food so alluring to consumers in the first place? According to a study, between 2007 and 2010, the average family median net worth dropped nearly 40%, from $126,400 to $77,300 (Oches, 2012). This significant drop of net worth for families directly ties into the allure of a cheap means of obtaining food, and feeding an entire family cheaply. Fast food also offers a convenience factor over its full service competitors. Most fast food restaurants offer various opportunities to engage consumers within their fast paced lives such as drive-thru’s and mobile ordering to acquire delicious, greasy food on-the-go. In 2010, the U.S. Food and Drug Administration began reforming the food industry, redefining what ‘healthy’ means, including the unveiling guidelines for both franchised and chain restaurantstoincludecaloriecountsontheirmenus (Amidor, 2013). However, over the last couple of years the climate has changed drastically within the food industry, and instead of looking for the cheap, convenient options of the past, the public is looking for healthier alternatives. In the wake of the war against obesity in the United States, the food industry is revolutionizing its menus in order to offer the delivery of healthful alternatives at reasonable prices in order to make healthy food, easier to access for its public. According to a study, Nielsen’s 2015 Global Health & Wellness Survey, which polled over 300,000 individuals online and suggests consumer mindsets about healthy food have shifted over previous years, and found that 88% of consumers within all demographics are willing to pay more SANTORE 2 for healthier foods (Gagliardi, 2015). By 2017, the global sales of healthy food products is estimated to reach $1 trillion (Hudson, 2012). Chipotle Mexican Grill assisted in (responsibly) raising of the bar for fast casual restaurants, through adding naturally raised, non-GMO ingredients to its portfolio. The reason that Chipotle has been so successful is because it gives the people a healthy alternative to the fast food restaurants of the past, at a higher, yet still affordable price. Chipotle as a brand is committed to cultivating a better world through the use of fresh ingredients, humane treatment of their animals, and organic food options. In 2013, Chipotle became the first national restaurant chain to voluntarily disclose the presence of GMO’s (genetically modified organisms), and in 2015, became the first to serve food with only non-GMO ingredients (“Food with integrity,” 2017). Within its commitment to cultivating a better world, in 2011, Chipotle Mexican Grill established the Chipotle Cultivate Foundation in order to extend its commitment to creating a more sustainable future. According to CEO and company founder, Steve Ells, “Delicious affordable food can be produced without exploiting the farmers, the animals or the environment. Chipotle has proven this to be true, but Chipotle is only one small part of the solution. Our goal now should be to have all food produced as sustainably as possible” (The Chipotle Cultivate Foundation, 2017).
  • 5. III. THE INDUSTRY The fast food industry is one of the largest industries in the United States. In 2014 alone, this industry generated approximately 198.9 billion dollars, and by 2020, it is forecasted to exceed 223 billion dollars (Statista, 2017). Restaurant chains such as McDoanld’s, Burger King, KFC and Wendy’s are rapidly expanding across the world; however, with the changing economic and social climate, consumers began looking for a healthier, more eco-friendly alternative to the quick service restaurants of the past. Recently, fast casual restaurants, such as Chipotle Mexican Grill, Five Guys Burgers and Fries, Burger 21, and Blaze Pizza have begun gaining an edge on the top dogs within the quick service market. Since 1999, the fast casual food market has grown by 550%, which is more than ten times the growth seen in the fast food industry over the same period (Ferdman, 2015). What separates fast food, from fast casual, from full-service dining restaurants? SANTORE 3 Fast-casual restaurants, like their fast food counterpart, have customers order at the register, and most offer no table service; however, the food tends to be of higher quality and prepared in store, rather than mass-produced like in chains such as McDonald’s, and relents a higher price tag (FranchiseHelp, 2017). According to Scarborough Research, the largest segment of the fast-casual dining consumers are married, Caucasians, between the ages of 35 and 54 with no children (FastCasual, 2006).
  • 6. IV. THE CLIENT In 1993, the first Chipotle restaurant opened in Colorado under the direction of CEO and founder, Steve Ells (“Our Company,” 2017) and became one of the first fast casual dining establishments in the world. Based upon the ideals of “food with integrity,” Chipotle went on to boast the idea of food that was natural raised, without antibiotics and would go on to set a precedent for other fast casual restaurants across the globe. The ironic part? Steve Ells had no interest originally in creating a new fast casual dining establishment, instead, he had aspirations of owning and operating a fine dining establishment. He developed the idea of Chipotle after watching an assembly line of workers at a local taqueria as a means of funding his restaurant (Schlanger & Bhasin, 2012). Within a month of opening, Ells was selling more than 1,000 burritos per day, and a mere two years later, the second Chipotle Mexican Grill opened in Colorado (Fundable, 2017). In 1998, Chipotle found an unlikely investor in McDonald’s and allowed the chain to grow to become a burrito empire. Chipotle grew from its mere 18 stores in 1998, to over 500 in 2005. In total, McDonald’s invested approximately $360 million in the Chipotle brand before stepping aside in 2006 to diverge focus from non-core business restaurants such as Chipotle and Boston Market (Myers, 2014). The investment from McDonald’s SANTORE 4 was all that Chipotle Mexican Grill needed to begin to grow and become a multi-billion dollar, nationally traded company (CMG). AofDecember31,2015,ChipotleMexicanGrill,Inc. operates 1,971 restaurants throughout the United States, Canada, England, France and Germany and has expanded to open additional branches including ShopHouse Southeast Asia Kitchens and Pizzeria Locale, with over 59,330 employees. At the end of the 2015 year, Chipotle Mexican Grill saw a revenue of $4.5 billion, and a net income of $475.6 million after operating expenses and taxes (“Annual Report,” 2016). Chipotle became the first company to begin to disclose non-GMO ingredients, and then in 2015 became the first national chain to abolish the serving of non-GMO ingredients in their restaurants (“G-M-Over it,” 2017).
  • 7. In 2016, the brand had hoped to further expand its portfolio to an additional 225-235 stores (“Annual Report,” 2016); however, at the end of the 2015 fiscal year during the fourth quarter, the restaurant chain fell upon its most challenging period in its history due to the unexpected outbreak of the food-borne illness: E. Coli within its stores. According to the Centers for Disease Control and Prevention, as of January 27, 2016 there were 55 reported infections across 11 states, resulting in 21 hospitalizations (FDA, 2016). The norovirus outbreak was devastating to the fast casual restaurant. In November 2015, Chipotle Mexican Grill closed 43 of its stores in Washington and Oregon in response, and only reopened the stores when they were positive that the food that they were serving was not contaminated. The brand worked closely with federal, state and local government agencies to ensure that robust food safety was in place, and even closing every restaurant for a portion of the day in order to deep clean the stores nationwide (FDA, 2016). During the fourth quarter of 2015, the brand saw a 6.8% decrease in revenue, in addition to a decrease of 14.6% in comparable restaurant sales over the fourth quarter of 2014. The overall net income of the fourth quarter was $67.9 million, which was a decrease of 44.0% compared to the previous year (“Investor Relations,” 2016). SANTORE 5
  • 8. V. THE PRODUCT, SERVICE OR ISSUE Chipotle Mexican Grill offers consumers burritos, burrito bowls, tacos, salads and chips created from fresh, high-quality ingredients. Consumers can build their own burritos, in a construction line, customizable experience choosing from six different meats (chicken, steak, barbacoa, carnitas, chorzos or sofritas), two different types of rice (white or brown), two different types of beans (black or pinto), and an array of salsas, and extras. According to Business Insider, at any Chipotle restaurant, patrons can enjoy and create over 65,000 unique menu combinations (Hickey, 2013). Chipotle Mexican Grill upholds their mission statement of providing “food with integrity” to its SANTORE 6 consumers at affordable prices. According to the brand, every choice they make – about who they work with, what they serve, and what they stand for – affects the bigger picture: the health of the planet (“Food with Integrity,” 2017). Chipotle offers its consumer natural ingredients from farms, rather than factories. Today, all of the pork that Chipotle sells in its carnitas comes from hogs raised naturally on farms, which are allowed to roam free on farms, without antibiotics or hormones. The stores themselves seek out locally grown and sourced produce, in order to support rural economies, not to mention 40% of their beans are organically grown (Chicago Gateway Green, n.d).
  • 9. VI. MARKET SHARE Chipotle Mexican Grill is considered to be a fast- casual Mexican style restaurant, and its direct competition falls in other likeminded chains, such as Moe’s Southwest Grill, Qdoba and Baja Fresh; however, when it comes to the share of the market, Chipotle Mexican Grill also must face off against larger competitors such as Applebee’s and McDoanld’s. According to the United States Department of Agriculture, the size of the food service industry supplied approximately $1.24 trillion worth of food in 2010, and is nearing the size of the food retailing industry. Both full-service and fast food restaurants account for about 77 percent of all away from home food sales (USDA, 2016). The largest competitor in the food industry is McDoanlds (MCD) which held 17% of the market share for fast food in 2015, followed by Yum! Brands, which owns KFC, Pizza Hut and Taco Bell with 10.8%. Chipotle Mexican Grill makes up only a mere 2.2% of the fast food market share (Statista, 2016). However, despite its small market share, Chipotle is a rapidly growing company and was ranked one of the fastest growing companies in 2015 by Forbes.com (Chen, 2015). While sales have been decreasing due to the food-borne illness epidemic, the fall has slowed significantly, and the brand can begin re-establishing its foothold on the competition. SANTORE 7
  • 10. VII. PROMOTIONS While you won’t find advertisements from Chipotle Mexican Grill in any traditional means, such as on television or on the radio, the brand utilizes digital tools as its means to an end, in order to differentiate it from its competition. It gives the opportunity for the brand to tell its story. According to Chipotle’s Chief Creative and Development Officer, Mark Crumpacker, “we deliberately spend less on our marketing so we can afford these higher-quality ingredients. That’s essentially the main marketing benefit to our customers” (Wohl, 2015). Despite their spending less on marketing, the non-traditional means to their advertising has not come without success. Two of the major promotional campaigns that Chipotle has created to influence an increase of business is their annual Boorito campaign, as well as their Chiptopia campaign that took place during the summer of 2016. SANTORE 8 The Boorito campaign was created in 2000, and encourages customers to dress up in Halloween costumes. The treat? Any consumer dressed in a costume would originally receive a $2 burrito on Halloween. While the price has risen, due to an influx in ingredients, over the last four years through Boorito, Chipotle has raised over $4 million to their Chipotle Cultivate Foundation (Arnold, 2016). The second, Chiptopia, was birthed in the summer of 2016, in an attempt to regain patronage after the outbreak of a food-borne illness in its restaurants. Chiptopia became a rewards program, offering consumers a 33% return on their purchases of an entrée at the restaurant. For every four burritos a customer would purchase, they would receive one free, and that’s not where the prizes stopped. The chain relinquished additional prizes for customers who reached a specific prize level (mild, medium and hot) such as an additional free entrée, free merchandise and the biggest prize: Chipotle meal catering for a party of 10, a $240 value. In October, the chain announced that 85,000 Chiptopia members qualified for the largest prize, and as a result, the brand relinquished over $20
  • 11. SANTORE 9 million worth of free food to its customers (Fox News, 2016). Did the promotion meet its target? Or did it fall short? According to an article by Business Insider, the campaign did not address the largest issue to the brand: company perception (Taylor, 2016).The largest issue with Chipotle’s rewards program, Chiptopia, was that it would not be sustainable for the brand long-term, and it failed to capture the attention of the casual consumer. What’s next? Chipotle has been creating unique, non-traditional media videos in promoting its mission statement of food with integrity. These advertisements will continue to tell the story of the brand, in light of their recent allegations, and draw in consumers through the creativity and innovation that originally brought them to the top of the fast-casual market.
  • 12. new evolutionary marketing tools that Moe’s is utilizing is augmented reality, or AR. The brand built an application aimed at restaurant artwork, and gives guests the opprotunity to bring Moe’s fresh ingredients to life. In 2015 alone, the brand opened 68 new restaurants, and sold 186 new franchise deals (Tweet, 2006). In 2013, the brand saw a 12% increase in sales over the previous year with $526 million in system wide sales. In 2016, Moe’s Southwest Grill unseated Chipotle as the top fast casual restaurant, according to Harris Polls (Harris Polls, 2016). 2. QDOBA MEXICAN EATS Qdoba Mexican Eats was founded in 1995 in Denver, Colorado. The brand began franchising in 1997, and then was acquired by Jack in the Box, Inc. in 2003 for $45 million (Sweeney, 2003). As of 2016, Qdoba is a mixture of both company owned, and franchised stores, and currently has 332 franchised locations, and 367 company owned, bringing the grand total to 699 total locations across the United States and Canada. In the 2014 fiscal year, the brand saw restaurant sales of approximately $338 million within its company owned stores (Statista, 2017). SANTORE 10 VIII. COMPETITION Fast-casual restaurants are becoming more and more popular within the food service industry, and in 2015, became the fastest growing market segment at 10.4% increasing its market by $3.4 billion in one year (QSR, 2016). The fast-casual restaurant has become more appealing due to a consumers yearning for healthier alternatives to fast food giants such as McDonald’s, who until recently, did not offer healthy choices. Chipotle Mexican Grill falls within the market segment of Fast-Casual Mexican dining. The brand’s largest two competitors are Moe’s Southwest Grill and Qdoba Mexican Eats. 1. MOE’S SOUTHWEST GRILL Moe’s Southwest Grill was founded in Atlanta, Georiga in 2000, and markets itself as a ‘fun-and-engaging casual restaurant’ (Moe’s Southwest Grill, 2017). The store offers consumers over 20 different ingredients, as well as low-calorie and vegetarian options. In 2007, the brand was purchased by FOCUS Brands Inc., which is the parent company to Auntie Anne’s, Cinnabon, Schlotzsky’s, Carvel, and McAlister’s Deli, and is represented in over 60 different countries. Moe’s is a constantly growing company, due largely to their franchising. Moe’s Southwest Grill’s marketing strategy plays a focus to its digital advertising. According to Moe’s President, Bruce Schroder, “our industry is going through a great deal of transformation. Fast causual is in the same over-supply situation that QSR encountered years ago. We’re no longer the best kept secret, so we have to work harder to differentiate as exciting new options enter the market every day” (Cansler, 2016). One of these
  • 13.
  • 14. IX. RESOURCES SANTORE 12 Prior to the 2015 E.coli outbreak, Chipotle Mexican Grill was a brand on the rise. In 2015 alone, the brand saw $4.5 billion in revenue (“2015 Annual Report, 2016); however, due to the outbreak the brand has seen a substantial loss of sales and revenue across the board. While the brand is slowly recovering, social media is in part responsible for the difficult uphill battle. News travels much faster than it did in the past, and can now reach a larger audience of people. Chipotle faces the challenge of breaking free of the negative clutter, and imposing itself in a new light. With the outbreak, the chain saw a distinguished decrease in sales. One of the largest obstacles that the chain faces is overcoming their public relations nightmare, and re-establish trust with their consumers.
  • 15. X. SWOT ANALYSIS SANTORE 13 1. STRENGTHS Fast-casual restaurants such as Chipotle Mexican Grill, Panera Bread, and Jersey Mike’s Subs are leaving a mark on the food industry. With $4.5 billion in sales in 2015, Chipotle Mexican Grill falls right behind Panera Bread as the industry leader of fast-casual dining (“Annual Report,” 2016). Chipotle Mexican Grill revolutionized the industry, becoming the first national food chain in the United States to completely cut out the use of GMO’s in their food, and working with local farms in order to benefit rural economies, and provide their consumer with naturally raised, organic options for their dining options. In 2011, Chipotle established the Chipotle Cultivate Foundation, and has since raised over $3 million to organizations committed to creating a better world through food. This money has gone to fund initiatives that support sustainable agriculture, family farming and culinary education (Cultivate Foundation, 2017).
  • 16. Chipotle Mexican Grill is a highly recognized, and profitable brand in the United States, and is a brand that is expanding rapidly across the country. In 2015, the brand hosted a portfolio of over 2,000 stores, and in 2016 aimed to expand to an additional 225-230 stores across the United States (“Annual Report,” 2016). With over 2,000 unique restaurants, none of the above are franchised. According to Chris Arnold, Chipotle’s Communications Director, “we believe that companies franchise for two reasons, either they need money to grow or they need operators to run restaurants” (Taylor, 2014). Chipotle doesn’t need either, and by choosing to not franchise, they are able to retain the standards of their brand and their commitment to providing the best, highest quality ingredients. After being plagued with negative publicity due to faulty advertising, the burrito chain stepped away from the marketing companies, and decided to bring their advertising in-house. According to Chipotle’s Chief Marketing Officer, Mark Crumpacker, “Chipotle was built on word-of-mouth marketing. We’re focused on reigniting word-of-mouth marketing, rather than big advertising campaigns” (Zmuda, 2010). The brand has never utilized television marketing, but rather, focused on telling its brand story through digital marketing. In one advertisement, Chipotle retells the story of young Ivan and Evie, as they grow old, become immersed in a thirty-year- long fast food rivalry, and eventually overcoming their rivalry due to their discovery of what really matters: their love for real food, and each other (“A Love Story,” 2017). In 2013, the restaurant chain announced that it only spent 1.4% of its revenues on advertising (Jones, 2014). 2. WEAKNESSES While Chipotle Mexican Grill has a large portfolio in the United States, its global impact is significantly smaller, and has just recently begun to expand to Europe. Out of the chain’s 2,100 stores, only 27 of them are located outside of the United States (Maxfield, 2016). Competitors such as McDoanld’s already have a large foothold in the European market with approximately 8,000 locations; however, for the burrito chain, Europe offers a large expansion of its market, and market share. While Chipotle does offer over 65,000 unique creations when it comes to their burritos, their menu has stayed remotely the same since the restaurants induction in 1993. In recent years, the brand has introduced new meat options to the mix in the face of chorizo’s, which is a mixture of spicy chicken and pork sausage, and sofritas, an organic tofu. In the four months that chorizo’s have been introduced to the public, their popularity has grown immensely, and now make up 7% of all entrée sales at Chipotle restaurants (Watrous, 2016). SANTORE 14
  • 17. SANTORE 15 With the addition of these two menu items, the base items are still the same (burrito, burrito bowl, salad or tacos), while other chains such as Moe’s Southwest Grill offers a much larger selection (burritos, jr. burritos, tacos, quesadillas, nachos, salads, stacks and burrito bowls). In the wake of the E. coli outbreak, the brand itself is still in the midst of overcoming the rapid decline of comparable restaurant sales. Even a year after the norovirus sent 21 consumers to the hospital, Chipotle is still facing a difficult road ahead of them. In October 2015, Chipotle stock prices were at an all-time high – and were being traded at $750 apiece; however, in January of 2017, a little over a year after the infectious incident, stock is down to $400 apiece. The E. Coli outbreak was just the tip of the iceberg, in July of 2016, Chipotle executive, Mark Crumpacker as arrested on seven counts of cocaine possession only to be reinstated by the burrito chain in September. In August, the brand faced a class action lawsuit accusing the chain of wage theft (Gillespie & Long, 2016). In September 2016, the brand also was facing a sexual assault lawsuit from a former employee, and teen was awarded $7.65 million by Chipotle Mexican Grill due to the allegations (Long, 2016). 3. OPPROTUNITIES With the past E. coli outbreak in mind, one of Chipotle’s largest opportunities for growth is to regain its consumers trust. According to an article, Chipotle was successful in regaining its loyal customers after the outbreak, this segment only makes up for 25% of its business, the other 75% of casual customers still feel the weight of the epidemic (Taylor, 2016). The brand is already battling the negative publicity through the creation of rewards programs, such as Chiptopia, an incentive program that rewards that incites return business. While Chiptopia was a huge success for the chain in terms of rewarding loyal consumers with free burritos, it was extremely expensive for the chain, granting consumers a 33% return rate for their money (Taylor, 2016). In comparison, coffee giant, Starbucks only offers consumers an 8% return on their rewards program. This offers a great opportunity for Chipotle to expand their rewards program, and create a larger, more loyal consumer base. Another opportunity for growth would be for Chipotle Mexican Grill to expand its menu options to compete with direct competitors such as Moe’s Southwest Grill and Qdoba Mexican Grill. These restaurants offer the consumer a larger amount of options, which makes it more appealing to the everyday consumer. Currently, the current demographicthatChipotleMexicanGrillistargeting with their advertising is millennials, the generation born between 1982 and the early 2000’s.
  • 18. With quirky branding, and social media accounts that allow consumers to engage with the brand. With this in mind, the largest consumer of fast- casual food in general are dual income families, with no kids. Rodger Roeser, vice president of Justice & Young Advertising and Public Relations stated in an interview|: “Fast-casual consumers are educated, health conscious and are really big fans of the outdoors. These consumers are overwhelmingly white — 90 percent — and are split down the middle in terms of gender, and 38 percent own a home worth $100,000 to $199,000” (FastCasual, 2006) While millennials have overtaken baby boomers as America’s largest generation to date, it is important to reach groups outside of this window. As the target market expands, the brand itself needs to expand as well. Chipotle is currently in the process of growing globally, and with the addition of 13 stores overseas, it’s on its way to becoming a global entity. The brand is working on building brand recognition, and brand loyalty in the European market, and is a large opportunity for growth within the chain. SANTORE 16 4. THREATS The largest threat to Chipotle is that of public perception. With the E. Coli outbreak and lawsuits, the brand itself must overcome the challenges, and continue on the path of recovery. With content going viral, the brand must overcome negative publicity related to the outbreak, and break free of the clutter in order to get their message of ‘food with integrity’ to its publics. The brand also faces the imminent threat of extremely strong direct competitors such as Qdoba Mexican Grill, Moe’s Southwest Grill and Baja Fresh Mexican Grill. For three years, 2012-2015, Chipotle topped Harris Poll’s as the top fast-casual Mexican restaurant; however, after the food-safety scares, and norovirus outbreak, the chain was unseated by competitor Moe’s Southwest Grill (Harris Poll, 2016). 2016 also saw the decline of consumers eating out, and spending money in general, due to uncertainties in the economy. According to the National Restaurant Association’s Restaurant Performance Index, the beginning of 2016 saw steady decline in sales and spending from its consumers (Chamlee, 2016). The brand itself sees the imminent threat of a change of customer tastes, and preferences, which impact the entire food service industry. For example, in light of Chipotle’s wide spread food safety incidents of 2015, consumers could choose to steer away from freshly-prepared foods (“2015 Annual Report,” 2016).
  • 19. SANTORE 17 While Chipotle’s promise to provide farm fresh, non-GMO ingredients is alluring to a multitude demographics, with the key demographic within Chipotle’s market segment is that of millennials. Chipotle utilizes non-traditional media to reach out to the younger demographic, and focuses on its message of organic farming. Millennials, which are the generation that was born between 1980 and the mid-2000’s are the largest generation in the United States, and represented one-third of the overall population in 2013 (The Council XI. PUBLIC PROFILES of Economic Advisors, 2014). In the According to the Council of Economic Advisors, millennials value the role that they play in their communities, and yearn to become leaders within their unique communities (2014). The role that millennials choose to take in their communities correlate to the choices that they make in relations to the food that they intake. Chipotle offers its demographic means of supporting an organization that provides ethical treatment of animals, non-antibiotic farming, and organic sustainability.
  • 20. Chipotle Mexican Grill stands apart from its competition in regards to its mission of providing quality ingredients, in a fast-casual dining experience; however, with the recent outbreak of norovirus E.coli, the brand faces a multitude of a public relations nightmare. Over the fourth quarter of 2015, Chipotle saw a decrease 6.8% decrease in revenue (“Investor Relations,” 2016). Chipotle’s scare with foodborne illnesses literally scared away business, and while the company XII. SITUATIONAL ANALYSIS is on the road to recovery, the brand’s sales and stock are still fighting to get back to the point that they were prior to the fright. The brand needs to overcome the negative image that it has been painted in by the media and regain its consumers trust. The brand itself speaks about their quality ingredients, and in this regard, they failed its public, and they failed to uphold their own food safety standards. The brand needs to uphold their standards by showing their public that their food is safe once again. SANTORE 18
  • 21. Due to the recent outbreak of foodborne illnesses within their restaurants, Chipotle Mexican Grill has seen a significant decrease in revenue, and sales across the board. XIII. CORE PROBLEM STATEMENT SANTORE 19
  • 22. Three key publics have been chosen in order to push the recovery of the brand. Prior to the outbreak of foodborne illnesses, Chipotle Mexican Grill saw $4.5 billion in revenue; with the public relations nightmare that was embodied, the brand saw a substantial loss of sales and revenue across the board. Within this campaign, the brand will be targeting the following publics: millennials, families, and Chipotle’s shareholders. We believe that these three key publics will be the key to unlock the recovery of the brand in order to re- establish trust with its consumers. 1. MILLENNIALS As of 2015, millennials have overtaken the baby boomer generation to be the largest generation in American history with according to the U.S. Census Bureau, 75.4 million people within the demographic and are made up of those born between 1980 and mid-2000. With the number constantly growing due to immigration, the U.S. Census Bureau predicts that the number of millennials will grow to a projected 79.2 million by 2050 (Fry, 2016). Millennials are not just the largest generation, but they are also the most diverse compared to their predecessors, more educated, less religious, and slower to settle down than previous generations (Pew Research Center, 2010). XIV. KEY PUBLICS & MESSAGES SANTORE 20 This generation poses to be the first ‘always connected’ generation, with cell phones and their social media accounts practically within an arm’s reach 24/7. According to a survey, 93% of millennials admit to using their cell phone while in bed, 80% while using the restroom, and 43% while stopped at a red light (Saiidi, 2015). While this generation is extremely connected, millennials as a whole are also more receptive to change, and are significantly more likely to become engaged within their communities over other, previous generations, and push to become leaders within their societies (The Council of Economic Advisors, 2014). Millennials are not only redefining the pre- determined lifestyles of their predecessor generations, they are also redefining what the word ‘healthy’ means. While previous generations were busy counting calories, millennials are much more concerned with food being considered fresh, less processed and with fewer artificial ingredients (Lutz, 2015). The roles that millennials choose to play within their communities, directly correlate to their choices when it comes to the food that they eat. Chipotle Mexican Grill offers its consumers the benefits of supporting an organization that promotes ethical treatment of animals, non-antibiotic farming, and organic sustainability. While the cost of dining at a fast-casual restaurant is slightly higher than that of fast-food restaurants such as McDoanld’s,
  • 23. SANTORE 21 Wendy’s and Burger King, according to Fortune, millennials are willing to “pay a little more for something they recognize as better” (Kell, 2015). The largest part of Chipotle’s demographic is that of millennials, and at roughly one-third of the population, this group holds $1.3 trillion in spending power (McGrath, 2014). Millennials are a large group that have the ability to push a brand to success, or cripple a brand. With Chipotle’s recent public relations nightmare, the brand needs to engage with its largest demographic in order to continue to grow, and thrive as a brand. It is vital to the recovery of the brand to convince this key public that the food that they are purchasing is safe, as well as healthy. 1. DESPITE THE OUTBREAK OF NOROVIRUSES, CHIPOTLE MEXICAN GRILL HAS REFORMED ITS SAFETY STANDARDS, AND IS COMMITTED TO PROVIDING ‘FOOD WITH INTEGRITY’ THAT IS SAFE FOR ITS CONSUMERS. Chipotle Mexican Grill’s recovery is complacent to the updating of their safety policies, and ensuring that an incident like the 2015 E.coli outbreak never happens again. In 2016, the brand took the following steps to ensure the safety of their consumers: • Introducing new safety protocol, including the blanching of avocados, citrus’, and onions before being used (Galarza, 2016). • Implementing bar codes for each food item, allowing traceability to its source (“Open Letter,” 2017). • Increased store-audits by in-house management, and third party inspectors. (Galarza, 2016). • Enhancing internal training procedures in order to ensure Chipotle’s high standards of food safety, and food handling (Business Wire, 2016). 2.CHIPOTLEMEXICANGRILLISCOMMITTEDTO PROVIDING QUALITY, HEALTHY INGREDIENTS TO ITS CONSUMERS. Chipotle Mexican Grill’s mission statement is to provide its consumer with ‘food with integrity.’ Since its founding in 1993, Chipotle Mexican Grill has boasted the idea that food, naturally raised without antibiotics is a much better alternative to the processed alternative that its competition has to offer. • In 2015, Chipotle Mexican Grill became the first chain to completely abolish the use of GMO’s (Genetically Modified Organisms) in its restaurants (“Food with Integrity, 2017). • A study by researchers at Washington State University showed that between 1996 and 2011, the use of pesticide and herbicides increased by more than 400 million pounds as a result of GMO cultivation (“G-M-Over it, 2017). • Chipotle believes that animals that are raised outdoors without the use of nontherapeutic antibiotics, which are allowed to freely roam are happier, and healthier than those raised in confinement. The brand only works with suppliers who will hold their high standards of animal welfare (“Food with Integrity,” 2017). • Chipotle Mexican Grill’s stores seek out locally grown and sourced produce, which aides in supporting local economies (Chicago Gateway Green, n.d.). • 40% of Chipotle’s beans are organically grown (Chicago Gateway Green, n.d.). 3. CHIPOTLE MEXICAN GRILL IS DEDICATED TO CULTIVATING A BETTER WORLD THROUGH THE CHIPOTLE CULTIVATE FOUNDATION, AND PROMOTING HIGHER STANDARDS OF ANIMAL WELFARE, SUPPORT OF RURAL ECONOMIES AND SUSTAINABLE FARMING. The Chipotle Cultivate Foundation supports local
  • 24. economies through investing in local farms and education and believes that “delicious, affordable food can be produced without exploiting the farmers, the animals or the environment” (The Chipotle Cultivate Foundation, 2017). • The Chipotle Cultivate Foundation provides resources for farmers, and since its inception it has contributed $3 million to likeminded organizes who are committed to cultivating a better world (The Chipotle Cultivate Foundation, 2017). • The Foundation contributed $2 million to help fund initiatives that support stainable agriculture, family farming, and culinary education (The Chipotle Cultivate Foundation, 2017). • The number of family farms have plummeted nearly 40% over the last 50 years, accounting for only 16% of the food produced of total farms (USDA, 2010) – Chipotle supports local farms by seeking out locally grown produce. 2. FAMILIES What exactly is a family? According to Business Dictionary, a family consists of a social unit of two or more persons related by blood, marriage or adoption having a shared commitment to the mutual relationship (Business Dictionary, 2017). This idealogy goes beyond the traditional idea of a family being parents, and children and also embodies the lifestyle of DINK’s, or dual-income, no kid families. Between the years of 2007 and 2010, the average family’s median net worth dropped nearly 40%, from $126,400 to $77,300 (Touryalai, 2012). This significant decrease of net-worth directly relates to the allure and consummation of fast, cheap alternatives. According to a study, fewer families have time to eat together due to work, school, sports, ample extracurricular activities and conflicting busy schedules (Ensle, 2007). According to Ensle, the food industry as a whole is under pressure to provide healthier foods; however, they must too be convenient, easy to prepare, and be able to be ready on the table and eaten within a few minutes (2007). While fast-casual restaurants such as Panera Bread, Chipotle Mexican Grill, and Five Guys Burger and Fries are typically more expensive than its fast food predecessors (on average $10-$13 per person), these restaurants do offer healthier options for its consumers. According to Neilson’s 2015 Global Health and Wellness Survey, 88% of consumers are willing to pay more for healthier options (Gagliardi, 2015). Families are eating out more, and like their millennial counterparts, are looking for a healthier way to do so. According to QSR Magazine, 29% of families are eating out multiple times per week (QSR Magazine, 2013). What Chipotle Mexican Grill needs to focus on is creating a healthy relationship with families, allow them to become part of their norm by engaging, and reassuring them that they provide safe, healthy food compared to the competition, and can easily fit into their busy lifestyles. 1. CHIPOTLE MEXICAN GRILL OFFERS HEALTHIER FOOD OPTIONS FOR FAMILIES ON THE GO. SANTORE 22
  • 25. While a burrito from Chipotle may have more calories than a Big Mac from McDoanld’s, it is overly perceived by its public to be healthier. The ability for consumers to customize their meal in front of the consumer, is something that gives Chipotle Mexican Grill the competitive edge over its competition. • According to Business Insider, at any Chipotle restaurant, consumers can create over 65,000 unique menu combinations (Hickey, 2013). Consumers can pick and choose the ingredient make-up of their burritos. • Chipotle Mexican Grill offers both online and mobile ordering, which allows consumers to avoid the lines in the stores. Digital sales make up 5% of total sales, and rose 40% last year (Wahba, 2015). • The brand sources their ingredients from local farms, rather than utilizing factories as a means to produce their materials. Chipotle’s meat is raised naturally on farms, rather than cooped up in a cage, and is free of antibiotics (“Food with integrity,” 2017). 2.CHIPOTLEMEXICANGRILL,ANDOTHERFAST- CASUAL DINING EXPERIENCES OFFER A GREAT ALTERNATIVE TO FAST FOOD RESTAURANTS SUCH AS MCDONALD’S, WENDY’S, AND BURGER KING. Fast-casual style dining is growing at an alarming rate. In 2015, sales grew 5.7% globally, improving over the previous year by 5.3%. Fast-casual dining was the strongest growing segment across the food industry at 10.4%, increasing USD $3.4 billion from 2014 to 2015 (QSR Magazine, 2016). • Consumers are shifting their dining preferences, and are looking for healthier options, and the dining out culture is looking for more modern, premium, casual and social experiences (QSR, Magazine, 2016). • Fast-casual dining experiences offer the benefit of no wait staff, while retaining the casual dining atmosphere of a full-service dining experience. • Chipotle offers its consumers fresh, non-GMO ingredients, which is healthier than the overly produced meats that fast-food restaurants such as McDonald’s offers. 3. DESPITE THE E.COLI OUTBREAK, CHIPOTLE MEXICAN GRILL HAS CORRECTED, AND REFORMED ITS SAFETY STANDARDS FOR FOOD HANDLING. Chipotle Mexican Grill believes in cultivating a better world through its use of fresh ingredients; however, in 2015, the chain experienced a major setback with a norovirus outbreak. The chain too major steps to correct the situation, and the food in its stores are once more safe. SANTORE 23
  • 26. • Days after the norovirus outbreak, Chipotle Mexican Grill closed 43 stores in the affected states in order to contain the epidemic. 38% of all victims were hospitalized due to the foodborne illness; however, there were no fatalities. The chain only opened the closed restaurants once it was sure that the food once more met their standards of food safety (CDC, 2016). • Chipotle Mexican Grill announced, during a companywide meeting, that they would be creating a $10 million program that would assist local food suppliers adhere to the new safety guidelines (Barnett, 2016). • The company also announced that it would be providing its employees with fully paid sick days to ill employees, who are now required to stay home an additional five days after symptoms disappear (Barnett, 2016). 3. SHAREHOLDERS Shareholders are an imperative part of any publically traded brand, and in return they gain partial ownership of the brand in question. Shareholders are uniquely situation, within Chipotle and many other brands, in the ideals that they are looking out for the best of the company. They want the brand to succeed in order for their own financial gain. As the brand grows, so does their income. In 2015, Chipotle’s shareholders had a total equity of $2.1 billion invested in the brand, which was over a $100 million over the previous year (“Annual Report,” 2016). In light of the 2015 norovirus outbreak, Chipotle Mexican Grill saw a second public relations nightmare, this time coming from inside the company. 2016, the brand saw a lawsuit from its own shareholders due to insider trading, and stated that the board of trustees acted for their own good, rather than the good of the brand. Former Co-CEO Marty Moran sold $107.7 million worth of stock at its inflated prices, based on insider information (Northrup, 2016). With the foodborne illness outbreak of 2015, Chipotle saw a significant decrease in their stock. Regaining the trust of its investors is an important part of Chipotle’s recovery, which is what makes this such a vital key public of this campaign. 1. CHIPOTLE MEXICAN GRILL IS ON THE ROAD TORECOVERYAFTERTHERECENTFOODBORNE ILLNESS OUTBREAK. Despite the falling stock prices, and the decreasing revenue and sales company wide, Chipotle Mexican Grill is beginning to slow their fall, and regain their edge on the competition. With the various forms of communication available to its consumer, unfortunately for Chipotle the road ahead to recovery proves to be a long, but not impossible road to traverse. • Other competitors, such as Jack in the Box and Taco Bell were able to recover from similar situations, and actually became more profitable after a rebranding (Cook, 2016). • Chipotle saw a 5% increase at $414.84 rise in their shares of stock in December 2016 (Ramakrishnan & Baertlein, 2016). • Same-store sales in December 2016 grew 14.7% for same-store sales, compared to 30% drop earlier in the year (Ramakrishnan & Baertlein, 2016). SANTORE 24
  • 27. SANTORE 25 2. FAST-CASUAL RESTAURANTS, SUCH AS CHIPOTLE MEXICAN GRILL, ARE PART OF THE LARGEST GROWING MARKET SEGMENT IN THE FOOD INDUSTRY. The fast-food industry is one of the largest industries in the United States, and in 2014 alone, the industry generated approximately $198.9 billion in revenue, by 2020 it is forecasted to exceed $223 billion (Statista, 2017). The fast-casual market segment is no different, and is constantly increasing and putting pressure on the top dogs within the food industry. Both full-service and fast- food restaurants account for approximately 77% of all away from home food sales (USDA, 2016). • Since 1999, the fast casual food market has grown by 550%, which is more than ten times the growth seen in the fast food industry over the same period (Ferdman, 2015). • According to Euromonitor, fast-casual grew at 10.4%, increasing $3.4 billion from 2014 to 2015 (QSR Magazine, 2016). • Despite the norovirus outbreak, Chipotle Mexican Grill saw its most profitable year in 2015, with a comparative restaurant sales increase of 5.5%, and an increase of 25.6% increase in diluted earnings per share through the first nine months (“Annual Report,” 2016). 3. CHIPOTLE MEXICAN GRILL HAS TAKEN EXTENSIVE STEPS TO ENSURE A HIGHER LEVEL OF FOOD SAFETY IN ITS RESTAURANTS. Chipotle Mexican Grill has taken multiple steps in order to ensure that the foodborne illnesses that caused outrage of its publics in 2015 never happens again. The brand revolutionized their food safety standards. • Chipotle Mexican Grill is now working closely with its suppliers in order to ensure that the ingredients that they’re receiving are safe prior to reaching their restaurants (“Food Safety,” 2017). • The brand devised a safety council made up of food safety experts dedicated to improving the food safety program at Chipotle, headed under the leadership of Dr. James Marsden (“Food Safety,” 2017). • Innovated a new traceability system, in order to track the ingredients on all the way from the farms to their restaurant, which allows the chain to respond quickly to a supply issue (“Food Safety,” 2017).
  • 28. BY JANUARY 2018, THE GOAL IS TO REVERSE THE DECREASE OF REVENUE AND SALES REGARDING THE NOROVIRUS OUTBREAK WITHIN THE CHIPOTLE MEXICAN GRILL RESTAURANTS BY 20%. With the E.coli outbreak, the restaurant chain saw a large 6.8% decrease of revenue, and 14.6% XV. CAMPAIGN GOAL SANTORE 26 decrease in comparable sales (“Annual Report,” 2017). The key to increasing the number of in-store sales, is to change the public’s opinion of the store overall. In order to regain a favorable means, the brand should foster meaningful relationships with its clients both in-store and through social media, and promote the Chipotle mission of serving food with integrity.
  • 29. SANTORE 27 60 DAYS FROM THE BEGINNING OF THIS CAMPAIGN, INCREASE IN-STORE POSITIVE GUEST INTERACTIONS BY 25%. After the E.coli scare, Chipotle Mexican Grill restaurants turned its focus on food safety, and began neglecting customer service. While the brand’s attention to safety is important in regaining its position as the top fast casual Mexican restaurant, Chipotle Mexican Grill needs to turn its attention to raising its guest service scores across the board in order to regain its public’s trust. The chain needs to make its focus on what’s important: its customers. The three largest complaints within the chain are: long lines, running out of ingredients, and untidy dining environments. The happier the customer, the more likely they are to return. 90 DAYS FROM THE START OF THIS CAMPAIGN, AIM TO BOAST POSITIVE SOCIAL MEDIA ENGAGEMENT AND INTERACTIONS BY 20%. Chipotle Mexican Grill hosts a large following on social media, including 3.1 million followers on Facebook (@chipotle), 830 thousand followers on Twitter (@chipotletweets), and 424 thousand followers on Instagram (@chipotlemexicangrill). Chipotle does a lot of great engagements with consumers over social media; however, there still is a lot of negativity regarding the customer service, and negative publicity. In order to answer, the brand should attempt to reach consumers and resolve their issues. XVI. CAMPAIGN OBJECTIVES OVER THE NEXT 6 MONTHS, INCREASE VISIBILITY OF THE CHIPOTLE CULTIVATE FOUNDATION BY 50%. The Chipotle Cultivate Foundation is a great tool for the brand, and offers the opportunity to give back to the community. Chipotle Mexican Grill as a whole hasn’t established definitive social media accounts for their foundation, and thus, visibility is extremely low. The ideals of the foundation which supports agriculture, family farming, culinary education, and innovations that promotes better food, is key to the success and recovery of the chain. To date, the Foundation has given thousands of dollars to trusts, and societies that align with their mission such as the Nature Conservatory, International Rescue Committee, FarmAid.org, among many others.
  • 30. XVII. PUBLIC RELATIONS STRATEGIES & TACTICS Chipotle Mexican Grill has three key publics that they will target with this campaign. Those three are: millennials, families, and shareholders. These key publics will be instrumental in the success of this public relations campaign and reaching the overall goal of reversing the decline of sales due to the foodborne illness crisis that the company faced. The following strategies and tactics will seek to convince its consumers that the food that the brand is serving is once again safe, and the company is on the road to recovery. 1.INTHENEXT6MONTHS,INCREASECONSUMER ENGAGEMENT AND TRANSPARENCY THROUGH SOCIALMEDIAACCOUNTSSUCHASFACEBOOK, TWITTER, AND INSTAGRAM IN ORDER TO REGAIN CONSUMER TRUST BY 60%. Chipotle Mexican Grill has been struggling to regain its edge as a forerunner in the fast-casual industry. Today, we live in a society where news travels quickly, and misinformation travels even faster. Chipotle should aim to regain the trust of its consumers, and push to break free of the clutter of misinformation to ensure transparency with its consumers. Social media plays an extremely important tool in reaching its publics, and especially within the millennial generation this is additionally important. Millennials, unlike previous generations, are not as phased by traditional advertising, and instead, are looking for ways to connect with the brand on a personal level, as was part of the success of Coca-Cola’s ‘Share A Coke’ campaign (O’Connor, 2015). • Engage with consumers across mediums, in order to retain current relationships with loyal millennial consumers, as well as create new relationships and foster brand loyalty with the general consumer base. • Instead of referring customers to a form to handle and dissipate guest complaints and SANTORE 28 compliments, utilize social media to provide guest service in order to retain transparency with the clients. • In order to increase transparency with the brand, and to give the consumer’s the illusion of directly speaking with the brand, rather than a random-faceless associate, the brand will stop replying to guest comments with their names. • Encourage guests to share positive guest experiences through social media accounts utilizing a specified hashtag such as #ChipotleCompliment, or #BestBurrito. Chipotle Mexican Grill could share, or retweet the post to create more community engagement. • Work closely with influential social media personnel to promote the Chipotle Mexican Grill product. • Team up with websites such as BuzzFeed and Tasty to create a contest for new products. 2. IN THE NEXT 90 DAYS, INCREASE THE NUMBER OF POSTS ON SOCIAL MEDIA ACCOUNTS PROMOTING HEALTHY EATING HABITS AND INGREDIENTS BY 40%. Chipotle Mexican Grill prides itself in the idea of food with integrity, which means providing its consumers with healthy, and fresh alternatives to the processed foods of fast food restaurants such as McDonald’s, Burger King and Wendy’s. One of the driving factors of a parent’s purchasing of food is whether or not it will be healthy for their children. In a study by the Organic Trade Association, in a surveywheretheysurveyedover1,200households in the United States with at least one child, found eight out of 10 American families bought at least one organic product due to concern about their children’s health (Organic Trade Association, 2014). Consumers are also more likely to spend more, if they deem the product to be healthier (Gagliardi, 2015).
  • 31. • Create compelling, real life examples of what their company stands for, rather than using animated videos, in order to break free of the clutter, and transform the public’s perception of the brand. • Post interviews with those within the agriculture industry, talking about animal welfare, and promote Chipotle’s way of life. • Engage with medical experts about healthy ways to make your burrito bowl, and give consumers tips on how to make Chipotle a part of any diet plan. • Partner with third-party websites, such as BuzzFeed and Tasty in order to create engaging content that will influence consumer’s perception of the brand. 3. INCREASE THE VISIBILITY OF THE CHIPOTLE CULTIVATE FOUNDATION BY 30% OVER THE NEXT YEAR. Instead of focusing on the challenges that the brand has faced since the E.coli outbreak of 2015, the brand will aim to direct part of the attention of the brand to the positive impact that Chipotle Mexican Grill is making within their local communities and ecosystems. Since the Chipotle Cultivate Foundation was established in 2011, they have raised over $3 million, and donated it to organizations committed to creating a better world through food (The Chipotle Cultivate Foundation, 2017). This will aim to gain support from not only consumers, but shareholders and current Chipotle employees as well. Employees play a vital role in the public relations of a brand, and according to the 2013 Edelman Trust Barometer, 41% of consumers believe that employees are the most credible source of information regarding a business (Arruda, 2013). • Raise awareness of the issues that The Chipotle Cultivate Foundation is working to correct within the communities by creating separate social media accounts for the foundation. • Host events across the United States that promotes sustainable farming, with proceeds going to the Foundation. Inviting media channels, executives, shareholders, etc. • Allocate time during the event for Q&A with Chipotle executives on the sustainability of the brand, and promoting the well-being that Chipotle is fostering within its communities. • Partner with other brands, and rescues that are also promoting the well-being of the environment such as International Rescue Committee, The Kitchen Community, The Ecology Center, and Food Corps, in order to increase visibility of the brand. 4. GAIN A 45% INCREASE OF POSITIVE GUEST EXPERIENCESWITHINTHECHIPOTLEMEXICAN GRILL RESTAURANTS WITHIN THE NEXT 9 MONTHS. Since the 2015 E.coli outbreak, Chipotle Mexican Grill has been plagued by negative reviews on social media, as well as a significant drop in its American Customer Satisfaction Index (ACSI) score. At Chipotle’s height of popularity in 2015, the brand saw a ACSI score of 83/100, falling right behind the leader, Chick-Fil-A with 86/100; however, after the recent foodborne illness incident, the brand saw a drastic decrease in their score, falling 6% to 78/100 (Cox, 2016). Customer serviceisanimportantfactoronanyrestaurant,and often first impressions make a lasting impression. If Chipotle Mexican Grill wishes to overcome the negative publicity associated with the crisis that they faced in 2015, they need to turn around their guest satisfaction within their restaurants. • Provide guest recovery for any issues regarding the brand through social media accounts. Recovery should be on a case by case basis in order to ratify solutions to poor guest experiences at various stores. • Add a prompt on receipts in order to engage SANTORE 29
  • 32. with consumers whether they’ve had a positive or negative experience. This will allow the brand to understand what they are doing right, as well as what they can improve on in terms of guest service. • Promote mobile ordering as a means of skipping the long lines during peak hours. This will also alleviate the main line in the stores, and essentially create a more efficient environment for consumers. • Train associates to provide a higher standard of guest service, including dealing with guest recovery in-stores rather than allowing the situation to elevate to social media accounts. SANTORE 30
  • 33. XVIII. CALENDAR & BUDGET Chipotle Mexican Grill has three key publics that will be targeted with this public relations campaign: millennials, families and shareholders. These key publics will be the key for the brand to regain its rightful place as the number one fast- casual restaurant in the perception of its publics. Chipotle saw a rough couple of years; however, this plan will begin the long road to recovery to regain its consumers trust over the next year. This proposed plan will begin in June 2017, and last 12 months, ending May 2018.The primary focus of the campaign will be to drive consumers to change their perception of the brand from negative to positive after the norovirus outbreak. SANTORE 31 The entire budget for the campaign will cost the brand approximately $800,000, which will cover associate training, video productions, as well as live events which will be held across the country. This plan will allow the brand to grow, and regain its strength against competitors such as Moe’s Southwest Grill and Qdoba Mexican Eats. While the brand usually utilizes in-house marketing, and limits its budget, in order for Chipotle to fully recover, the brand should splurge its budget in order to overcome its setbacks. 1. IN THE NEXT 6 MONTHS, INCREASE CONSUMER ENGAGEMENT AND TRANSPARENCY THROUGH SOCIAL MEDIA ACCOUNTS SUCH AS FACEBOOK, TWITTER, AND INSTAGRAM IN OR- DER TO REGAIN CONSUMER TRUST BY 60%.
  • 35. 2. IN THE NEXT 90 DAYS, INCREASE THE NUMBER OF POSTS ON SOCIAL MEDIA ACCOUNTS PROMOTING HEALTHY EATING HABITS AND INGREDIENTS BY 40%. SANTORE 33
  • 36. 3. INCREASE THE VISIBILITY OF THE CHIPOTLE CULTIVATE FOUNDATION BY 30% OVER 12 MONTHS FROM THE BEGINNING OF THE CAMPAIGN. SANTORE 34
  • 37. 4. GAIN A 45% INCREASE OF POSITIVE GUEST EXPERIENCES WITHIN THE CHIPOTLE MEXICAN GRILL RESTAURANTS WITHIN THE NEXT 9 MONTHS. SANTORE 35
  • 38. XIX. EVALUATION PLAN CHIPOTLE MEXICAN GRILL’S POSITIVE IN- STORE INTERACTIONS WITH CLIENTELE INCREASED 25% BY THE 60 DAY MARK WITHIN THE CAMPAIGN. Chipotle Mexican Grill CEO Steve Ells stated in an interview that he was not satisfied with the rate of recovery of his restaurant chain, and he is especially not pleased with the quality of experience at some of his stores (Turner, 2016). It is vital for Chipotle Mexican Grill to increase its in- store guest service experiences in order for them to fully recover from the foodborne illness crisis. In order to evaluate whether or not the chain was successful in increasing positive in-store interactions, the brand will a series of surveys and cyberspace analysis. Prior to the beginning of the campaign, the brand should set a baseline of the current customer satisfaction. In order to get the baseline reading, Chipotle Mexican Grill will add an online survey link to their receipts. To get a larger amount of the population participating, the brand will include a raffle prize, which would be released monthly. Once a baseline is created, the brand can begin the proposed campaign. After the 60 day mark, the brand will look at the statistics and compare them to the baseline in order to see if the brand has improved its guest services in- store. Some questions that would be asked to the consumer will include: 1. Have you ever been to a Chipotle Mexican Grill restaurant prior to today? 2. How would you rate your experience today at Chipotle Mexican Grill? 3. What is your current perception of the brand? 4. What could we do to improve our service? 5. Would you reccommend Chipotle Mexican Grill to a friend? SANTORE 36 Another method of measurement that the brand will utilize will be cyberspace analysis, where the brand looks at social media accounts and is based upon how the brand is portrayed online in terms of images, reputation, and positioning through chatter and discussion (Reed College of Media, 2017). Like with the surveys, Chipotle Mexican Grill will set the baseline prior to the beginning of the campaign, and then re-evaluate the statistics after the 60 days allotted. If the brand reaches the 25% increase of positive guest interactions, then the brand will continue the campaign for another 60 days, and then re-evaluate at the end; however, if the brand does not meet its quota, then the brand will look at what changes they can make to the campaign in order to meet the goal. CHIPOTLE MEXICAN GRILL’S SOCIAL MEDIA ENGAGEMENTANDINTERACTIONSINCREASED BY 20% AMONG KEY PUBLICS 90 DAYS FROM THE BEGINNING OF THE CAMPAIGN. Chipotle Mexican Grill has been plagued with negative interactions through social media, which does not look favorable for the brand. In order for the brand to regain the trust of its consumers, it needs to properly engage them through social media. While only 41% of millennials use Facebook every day, the numbers are much higher across other social media platforms such as YouTube,
  • 39. SANTORE 37 Instagram, Snapchat and Twitter (Friedman, 2016). One method that Chipotle can utilize to evaluate the success of their public relations campaign pertaining to social media would be through a social media monitoring program such as Hootsuite, Keyhole, or Little Bird. These programs will allow the brand to focus on who their campaign is reaching, and whether it was successful or not. With applications such as Hootsuite, the brand can focus on specific keywords, demographics, and number of mentions across social media platforms. This will allow the brand to focus on increasing both engagement and interactions with consumers. AWARENESS OF THE CHIPOTLE CULTIVATE FOUNDATION WILL BE INCREASED BY 50% OVER THE NEXT SIX MONTHS. The Chipotle Cultivate Foundation is a positive aspect of the brand, and would serve as a great opportunity for the brand to escape the negative publicity associated with the issues that the brand faced in 2015 and 2016. One way to overcome the negativity that the brand is facing is for the brand to focus on positive aspects of the company, for Chipotle, that relies within their foundation. In order for Chipotle to measure the effectiveness of their campaign, and whether or not the visibility of their foundation has been increased, they need to utilize two different means of measurement. Chipotle will need to utilize both surveys, as well as social media analysis. The surveys will look into the correlation between guests who have heard about Chipotle Mexican Grill, and if their knowledge about the foundation influences their perception on the brand. It will also ask consumers about whether they knew about the foundation, and if they know how it benefits their economies. Social media analysis will allow the brand to focus on what their consumers are talking about, and if they’re talking about The Chipotle Cultivate Foundation in comparison to prior to the campaign’s beginning.
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