Chipotle Mexican Grill, Inc. IPO Analysis
FI 516 – IPO Paper
Chipotle Mexican Grill, Inc. (“CMG”) is a restaurant specializing in Mexican/Spanish
food founded by Steve Ells in 1993 with its first location was in Denver, Colorado.
Food with Integrity
, describes the goals of the restaurant to focus on “higher-quality
ingredients and cooking techniques used in high-end restaurants to make great food accessible at
reasonable prices,” while simultaneously, “ understanding the environmental and societal impact
of our business”.
In addition, the missions statement, a staple of CMG is to serve naturally
raised ingredients such as “ naturally raised pork, beef and chicken, as well as organically grown
and sustainably grown produce, and we continue to investigate using even more naturally raised,
organically grown and sustainably grown ingredients, in light of pricing considerations.”
these goals in place, CMG is now recognized as one of the pioneers of a category of dining now
called "fast-casual”, the fastest growing segment of the restaurant industry, where “customers
expect food quality that's more in line with full-service restaurants, coupled with the speed and
convenience of fast food.” (ir.chipotle.com)
In addition to this unorthodox approach to the
restaurant industry, CMG has also “rejected almost every major technique in which the industry
Not only does CMG never show the actual product it sells, “it doesn’t advertise on
television, doesn’t franchise, and has some of the highest ingredient costs in the industry” (St.
Petersburg Times, Nov 24, 2007).
These ideas have not only changed the landscape of the
restaurant industry, it has led to the exponential growth of Chipotle restaurants worldwide.
According to its 10-K Annual Report filing from December 31, 2010, CMG’s total
revenue has increased 123% since 2006.
Majority of this revenue increase is credited to the
ability to have expanded to so many locations.
This was made possible due to McDonalds