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Just passing the six-year mark in his run as Chipotle's (CMG) CEO, Brian Niccol is still juggling full plates.
On his mind: robots that cut, core, and peel avocados; a coming commencement speech at his alma mater; and how many restaurants he's opening in the years ahead.
All in the day of a CEO who has flown a little under the radar in the press, but not with his investor base. This week, the company announced a 50-for-one stock split, making its shares more accessible as the stock trades around all-time highs.
"I think Chipotle is going to achieve things that we set out in vision statements and now we're making reality — so the next few years are going to be a lot of fun," Niccol tells Yahoo Finance.
It's been a fun few decades for Niccol, who got his feet wet at Procter & Gamble (PG)'s branding department in the mid-1990s. Then a recent college graduate, one of his first assignments was working on P&G's Scope Mouthwash account and reportedly breaking new ground by sending an animated kiss via email.
Fast-forward, and Niccol was leading marketing at Yum! Brands (YUM) owned Pizza Hut and Taco Bell, where he created Taco Bell's famed "Live Más" branding. He went on to become its CEO, his last role before accepting the Chipotle gig.
The soft-spoken fast food veteran started as Chipotle's CEO on March 5, 2018, with two strategic imperatives. First, stabilize a business financially rocked by an E.Coli outbreak. Second, relaunch the brand amid a shift to digital ordering.
Then, another priority as the COVID-19 pandemic hit: Retrain workers and continue to promote from within, long the hallmark of Chipotle.
Since then, Niccol has checked every box and more. He ushered in new menu items such as cauliflower rice and quesadillas, and tested robots that make tortilla chips. He boosted Chipotle's presence to 3,400 locations (including an entry into Canada), up from 2,400 around the time he was hired.
The chain could hit 7,000 restaurants or more in the US over the next decade, says Niccol, who's aiming for a record of 285 to 315 new openings in 2024.
Chipotle shares have skyrocketed 556% since Niccol was announced as CEO, per Yahoo Finance data, compared to 89% for the S&P 500 and 79% for McDonald's (MCD).
To further put this into perspective, Apple's (AAPL) stock price is up 275% during that time span, while Amazon (AMZN) has gained about 119%.
"Chipotle remains a premium brand with strong value and digital capabilities that have positioned Co better than most as evidenced in recent traffic trends," Jefferies analyst Andy Barish said in a recent client note.
The below conversation with Niccol has been condensed for length and clarity.
Brian Sozzi: Through the inflationary period seen in recent years for fast food, people have still seemed to have a love affair with Chipotle the brand. Why?
Brian Niccol: The mission that we have is "Food with Integrity." And what does that mean? Well, it means clean food. It means food that's raised the right way. It means it's food that's cooked and prepared the right way.
[Customers will] talk about how big the portions are with the burritos or the bowls that they build, but when you really boil it down, it is this commitment to Food with Integrity and the [cooking] that actually happens in our restaurants. It's all fresh food done right in front of you, and people are turned on by that, and the fact that we can get it done highly customized and highly fast, it's just meaningful bonus points.
Sozzi: It's really just the large portion size, come on.
Niccol: Well, I think you hit the nail on the head, Brian. The customization so that you can get the bowl or the burrito the way you want — it is hugely valuable. If you want double meat, we'll do that for you. If you want a little extra rice, we'll do that for you. At the end of the day, however you want to eat, you ultimately feel good about what you're putting in your body. And I think that matters a lot to every generation and every income cohort out there.
Sozzi: How is AI and new automation technology going to change Chipotle's future? A new JP Morgan report said you were testing cameras that will help measure portion sizes so they are accurate; tell us more.
Niccol: I think there's definitely a future where we can be a lot more accurate in giving people consistent portion sizes, whether it's double guac on the side or in your bowl. And the reality is between vision, technology, and AI, I think we're going to be able to become a lot more accurate, without having to give up any speed in doing it. That's what I'm most excited about.
Sozzi: Is this the year where you test new vision technology in restaurants to improve order accuracy?
Niccol: We have not yet, but I'm optimistic that this is the year where we're going to do one or two of these things at least in a restaurant. And the thing that I'm really excited about is even the next generation [of this technology] that we're already working on.
And then when you get your crew members involved, you put it under the pressure of hundreds of transactions, you just learn so much. I think even on our Autocado [avocado peeling robots], we're already on like our third or fourth prototype, and now we're like okay, this is ready to go into a restaurant. I'm sure when we put it in the restaurant, we'll learn something that might cause us to iterate one more time.
Part of the process of this too is you've got to be comfortable with failing. Chippy [tortilla chip-making robot] didn't pan out the way we thought it would. Because of Chippy we ended up a lot better on Autocado. I'm committed to being a learning organization.
Sozzi: What went wrong with the Chippy robot testing?
Niccol: The biggest challenge was the cleaning of it. It just became way too cumbersome for the team to clean it. We took that learning for Autocado. Much earlier in the design we have to take into account what's going to take for the crew member to clean this thing.
Sozzi: The Chipotle lines in the restaurant feel like they are moving faster at long last. Why?
Niccol: [It] is just from getting back to executing on Chipotle standards. We had to really shake off some of the behaviors that were created during the labor shortage in COVID. Where we were dealt really difficult situations that caused them to close the restaurant early or be out of ingredients or be understaffed.
And all that stuff now is behind us. We're staffed now and trained for deploying, and the teams have more stability than they've had in the last couple of years.
Sozzi: Not many restaurant chains are opening 300 locations this year as you all are. In 10 years, how many Chipotles are open worldwide?
Niccol: Well, we've publicly said we want at least to get to 7,000. I think the good news is as we continue to open restaurants we see no slowing down in new unit economics, which will give us more and more confidence that 7,000 might be too conservative of a number.
And I'm just talking about the US. So, Canada is performing well, every region in the United States is performing well, and we're early days in Europe, and we're going to start exploring how this brand can work and travel outside the United States. But it's early days there.
Sozzi: Can Chipotle work in China?
Niccol: That's a great question. I don't know the answer to that yet. My instincts tell me yes. But we have a long way to go to prove that out ... The good news is, we've got the US business growing in a really special way that affords us the opportunity to go learn in a lot of different parts of the world.
Sozzi: Chipotle continues to place a lot of emphasis on promoting people from within to higher-level positions and offering perks like college assistance to strengthen the culture. How much do you think about culture each day?
Niccol: It's hugely important. People want to be a part of a winning culture, a caring culture, a growing culture. And one of my key jobs is how do I make sure I've got the right leaders that cascade that type of culture.
Sozzi: How do you stay sharp as a leader?
Niccol: I'm always trying to figure out what I could learn next. I'm still really curious. I like what I do. So that gets me energized. And it's fun when you're a part of growing something. The idea that we have so much opportunity to grow, and the fact that I still consider myself young, I still have so much I personally think I could impact and grow myself.
Sozzi: So where do you see yourself in 10 years? You are still a young guy as you mentioned.
Niccol: It's funny, I've got three kids and my youngest, she's still in middle school. I want obviously Chipotle to achieve everything that we've set out to do. But I also know it's important for me and my wife Jen to see our kids turn into good folks. And, hopefully over the next 10 years, that's what we see happen with our kids. I want to see them turn into brave young adults. And at the same time, I think Chipotle is going to achieve things that we set out in vision statements and now we're making [them] reality.
Sozzi: I hear you are giving a commencement speech in May to your alma mater Miami University. What's your message going to be to those graduating?
Niccol: It's funny, I'm working on that right now. People that are committed to getting things done, guess what, they get things done. And then unexpected things happen. Unexpected doors open, unexpected opportunities open. And when you walk through those things with an attitude of I'm going to get it done, things happen.
You've got to do it with high integrity, you've got to do it with high resilience, because not everything's going to go the way you think. I think we live in one of the best places in the world to take advantage of that. So, I think that's the biggest thing that people need to remember is don't be afraid to be a doer.
Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter/X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email brian.sozzi@yahoofinance.com.
