Chipotle (CMG) Strengthens Its Digital Capabilities With Hyphen
Chipotle Mexican Grill, Inc. CMG has partnered with Hyphen, a foodservice platform, to test an automated digital makeline. The new system, created by Hyphen, utilizes intelligent automation to assemble bowls and salads. This innovative, collaborative robot (cobotic) technology is being tested at the Chipotle Cultivate Center in Irvine, California.
About 65% of CMG's digital orders are bowls or salads, making the cobotic digital makeline crucial. It allows employees to focus on the front makeline, providing exceptional service and increasing digital order capacity during peak periods. This innovation also improves order accuracy, enhancing the guest experience.
The automated system assembles bowls and salads by moving the entrées through the bottom makeline, where ingredients are dispensed automatically for the order. Simultaneously, a Chipotle team member can use the top makeline to prepare burritos, tacos, quesadillas, and kid's meals for the same digital order.
The strategic move highlights the company’s commitment to leveraging robotics. This approach aims to unleash the potential of its workforce, ensuring exceptional dining experiences. The goal is to make the automated digital makeline a central feature in all CMG restaurants' digital kitchens.
Focus on Digitalization
Chipotle is focusing on expanding its digital program to drive growth. The initiative involves robotics collaboration, allowing the company to focus on other restaurant culinary tasks without sacrificing the item's quality and deliciousness. Digital sales contributed 38% to sales during second-quarter 2023.
CMG invested in Hyphen through its $50 million venture fund, Cultivate Next. This fund supports aligned companies, aiding CMG's mission to Cultivate a Better World and fueling its growth plans. CMG seeks innovations in farming, supply chain, robotics, and alternative proteins. It has also invested in Vebu, a product development company, leading to the Autocado, a cobotic prototype for avocado processing, enhancing menu items like guacamole.
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Shares of Chipotle have gained 32.9% this year compared with the industry’s 3.6% fall. The company benefits from its strong comparable restaurant sales growth, digital efforts, Chipotlane add-ons and menu innovation. This and strength in digital sales, rise in menu prices, new restaurant openings and higher restaurant-level operating margin have driven the company’s performance.
Zacks Rank & Other Key Picks
Chipotle currently carries a Zacks Rank #2 (Buy).
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