Modern brands balance the needs of their employees with the needs of consumers and the communities they serve. They generate a profit and appeal to consumers who want to buy from brands with values that align to their own. In fact, according to a forthcoming study by Barkley and Jefferies, “The Purpose-Action Gap: The business imperative of ESG,” two out of three consumers want to purchase from companies whose values align to their own. Often the consumer barriers are accessibility and affordability. When a brand closes the gaps on accessibility and affordability, it becomes easier for consumers to act on and live their values. To illustrate this concept, Chipotle’s CMO Chris Brandt shares the brand’s impressive new sustainability report as well as insight into how it evolved in the last year.
Jeff Fromm: As a leader in sustainability, how are you and Chipotle thinking about profit as it relates to the big commitments that are needed to be made in sustainability and how is this evolving during COVID?
Chris Brandt: We don’t think of it in terms of profit. It’s a core part of the brand and I think that Chipotle’s been doing sustainability before it was fashionable to do so because the founder, Steve Ells just believed it was the right thing to do. Our brand purpose is about cultivating a better world, and so we need to manifest that in the things we do. That core purpose has been a north star for us during COVID. The interesting thing is consumers have always wanted to know what brands stand for, and, certainly, that has been on the rise in recent years. But, with the pandemic happening in 2020, that didn’t just become a nice thing to have, it became something that they wanted to understand. They wanted to understand brands’ values and how they align with their own.
Sustainability has been at the core for Chipotle. We have some of the toughest animal welfare standards in the industry, we don’t use anything artificial, we treat our employees the right way. We’ve done things like Real Foodprint that show you the proof of what we’re doing and how Chipotle is better than conventionally-raised ingredients. We spend about two to three more points in cost of sales to make sure that things are sustainable versus conventionally-raised ingredients. That totals up to $200 million, easy, maybe north of that, but we view that as a core proposition of the brand. Could we make more money if we didn’t do that? Perhaps. But, again, that’s the core of what the brand’s about.
Fromm: So Chipotle was very early in putting out goals before they’d reached them, which is fantastic. What are a few of the far-out goals that people may not be aware of for your brand today?
Brandt: I, personally, prefer goals that aren’t more than a couple of years out because I think there’s a lot of greenwashing that goes on with a lot of brands that say, “We’re going to do this by 2030 or 2035.” Well, what are you doing today? And what are you doing in the next year? We’re working on some more long-term goals around carbon sequestration, and biodiversity, and those kinds of things.
I think we’re less about the 2035 or 30 goals and more about what we are going to do in the next couple of years to reduce the amount of waste in a landfill, and to buy more local produce, and those kinds of things.
Fromm: When you think about the Chipotle brand and how you think about social, environmental and related issues, where do you decide to engage as you think about which things are important and which things need to be left for others?
Brandt: It certainly came to the fore into 2020 like no other year before. We certainly didn’t go into 2020 thinking that we were going to have to take a stance on racial inequality and those kinds of things. But, we know that the core of the brand is around sustainability and environmental issues. Farmers are something that we really adapted in a big way in 2019. It’s always been part of it, but we made much more overt investments in the farming community, because farming’s in trouble. The average age of farmers is 59 or 60 years old. The average farm was losing money before even 2020 happened, and so we really made a big commitment there.
But things like racial injustice, we felt like the brand had to make a stance. We use the brand as a person. When things are happening in society and where consumers are expecting brands to have a voice, then I think that’s where we need to act. We really would like to stay around our core. Because the reality is we’re one brand, we can’t solve all of the world’s problems, but maybe we can make a dent in some of them. When things on a macro basis are so big that they’re impacting everyone, then we feel like the brand needs to make a stance.
Fromm: Can you share a little bit about how you engage your employees, how you engage your consumers, and how you’re going to innovate in ways that are new and different than maybe what you’ve done in the past?
Brandt: I think that it’s easy to say, “I want to be innovative.” It’s another thing to really put it in practice, and put it in place. So we’ve been very public about putting a new stage-gate process in, that really enables us to quickly, and efficiently, and effectively test different things.
The other part is we have this mindset that if you’re doing the things the same way you did them last year, you’re probably falling behind. The world isn’t getting any less complex so you’ve constantly got to be challenging yourself to do things better. We’re a very flat organization, and so we can move quickly. We want to be quick, we want to be flexible, we want to adapt to what consumers are doing.
To find out what consumers want, we’ve done a number of things. 2020 stopped a lot of things, but it didn’t stop our menu innovation because our culinary teams figured out ways to do testing with consumers in their cars. People would drive up and take the food, and then they’d call them and people would test them in their cars. We have a fake Instagram account where we can experiment with people and they say, “Hey, this works or this doesn’t work.” So we’re constantly getting feedback from consumers on that front as well, in addition to some of the traditional things that you might think about. Those things have been really important to us, and they’re just a core of what we do.
We like to say that we were making decisions in the early weeks of March 2020 while other people were still thinking about what to do. And that’s, I think, a credit to our executive team, a credit to our team members. The number one thing I try to hire people to do here at Chipotle is to come up with ideas. The more good ideas we can come up with throughout the organization, the better off we’re going to be. And the more quickly we can validate those and get them in the marketplace, the better we’ll be.
For questions about this interview, please contact Jeff at email@example.com