3 Challenges Chipotle Faces Launching an Asian Chain

Last Updated Nov 30, 2010 4:20 PM EST

Chipotle Mexican Grill has announced it intends to try to duplicate its success in organic, locally sourced fast-Mexican food with an as-yet-unnamed Asian concept next year.

Company CEO Steve Ells said:

"Chipotle is not successful because we serve burritos and tacos," he added. "Our success comes from finding the very best sustainably raised ingredients, prepared and cooked using classical methods in front of the customer, and served in an interactive format by special people dedicated to providing a great dining experience. And while our Chipotle restaurants will, of course, remain our primary focus, we are also excited to see how this format works with other cuisines."
Well, it might not be that simple. Here are three reasons why Chipotle might find it hard to repeat its success in the Asian category:
  1. Local sourcing challenges. The first thought that comes to mind is: How is Chipotle going to find locally sourced, organic shrimp all over the U.S., for instance? The ingredients for Asian food, particularly the seafood, will greatly challenge Chipotle's commitment to finding local and organic food to serve in every locale.
  2. Not an open field. When Chipotle started, its prime competitors -- Qdoba and Baja Fresh -- were just getting started, too. The idea of a big, national, quick-serve Mexican eatery was just being born. This is hardly the case with quick-serve Asian cuisine. Panda Express has a bit of a leg up here -- it's already got more than 1,300 fast-Asian restaurants, to name just one established player in the niche.
  3. More complex menu. Mexican food is pretty simple to execute. You throw together beans, tortillas, a few meats and cheeses, guacamole, rice, and you're pretty set. Asian food involves a lot more chef expertise, more ingredients, different spices, and more complex dishes that are tricky to keep appetizing-looking in a warming tray -- just hit your local grocery store's hot-deli line or a shopping-mall food court and take a look. Staffing and ingredients both may be more costly, making the operating model not pencil out as well.
The advantage Chipotle has going for it in launching a new chain is its deep pockets. Chipotle is a wildly successful, profitable company, so it can invest the money needed to get a new brand off the ground. It remains to be seen whether that will be enough to give Chipotle a second hit chain.

Photo via Flickr user Aranami
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  • Carol Tice

    Carol Tice is a longtime business reporter whose work has appeared in Entrepreneur, The Seattle Times, and Nation's Restaurant News, among others. Online sites she's written for include Allbusiness.com and Yahoo!Hotjobs. She blogs about the business of writing at Make a Living Writing.