The recent downfall of the crypto market, which has lost $1 trillion in value in May and June, has left the digital currency’s viability swirling in doubt.
However, Chipotle Mexican Grill Inc. (NYSE: CMG) maintains that crypto is the future—at least for its marketing efforts.
The Newport Beach-based restaurant chain last month launched a game called “Buy the Dip,” which gave away over $200,000 in crypto. It followed a June announcement, when Orange County’s second-most valuable public company said it would accept crypto as payment.
Chipotle is one of a handful of big restaurant chains, such as KFC, Starbucks, Burger King, Subway and Pizza Hut, that now accepts crypto as currency.
“Around half of our current customers are millennial or Gen Z, and we know these demographics have a strong affinity for the crypto space,” Chipotle Vice President of Digital Marketing and Off-Premise Tressie Lieberman told the Business Journal.
“Our overarching goal is to build and reach the next generation of the Chipotle fandom,” said Lieberman (see story, this page/jump page).
The restaurant operator, with over 3,000 companywide locations, hasn’t disclosed how many customers have used crypto to pay for their meals to date.
Buzz Drives Results
Lieberman’s comments echo those of Chipotle Chief Executive Brian Niccol, who told analysts late last month that the company’s marketing efforts are designed to make “the brand visible, relevant and loved.”
New promotions such as the crypto game offer is “an opportunity to create buzz around the brand,” he said.
The efforts appear to be working. Chipotle reported a 17% increase in second-quarter revenue to $2.2 billion.
Digital orders represented 39% of sales last quarter, one of the highest levels of any large restaurant chain.
Shares in the company jumped 16% to $1,529 per share after it reported second-quarter results late last month.
Chipotle counted a nearly $45 billion market cap as of late last week, not far off its valuation at the start of the year.
Other Tech Initiatives
Along with crypto, another digital community Chipotle has set its sights on is the metaverse.
In partnership with digital platform Roblox Corp. (NYSE: RBLX), Chipotle launched in April a digital burrito-making experience. It’s the first national brand to serve virtual food on Roblox.
The promotion granted the first 100,000 Roblox players that rolled a virtual burrito “Burrito Bucks,” which users could exchange for a free entrée code.
The initiative “led to one of our best digital sales days and marks the first time a brand enabled Roblox players to earn and exchange virtual Roblox currency for real-world items,” Niccol said.
Technology is also being used in the company’s front-line operations in its restaurants.
In last month’s earnings call, company officials noted new software the chain is implementing to drive efficiency and improve wait times for both digital and in-store customers.
Recent pushes in restaurant staff—the company now tops 100,000 employees—mean that new hires are still adjusting to working in Chipotle’s fast-paced environment.
“A lot of these folks haven’t experienced how fast the line can move,” Niccol said. “So, in some cases, folks think they’re moving pretty quick[ly], when in fact we could be moving a lot faster.”
To get employees up to speed, Chipotle officials said management will retrain its crew members and, in time, master the new labor management tool the company recently rolled out.
“This is a brand-new tool,” CFO Jack Hartung said. “It’s like learning how to drive a Ferrari. But the capabilities are much higher than what our previous tool allowed.”
Chipotle is also looking into an automated kitchen production system to further drive efficiencies. Through its $50 million venture fund, Cultivate Next, the company last month invested in a foodservice platform, named Hyphen, that automates kitchen operations for restaurant owners, operators and budding chefs. Financial terms of the investment were not immediately disclosed.