Chipotle was already ahead of many marketing curves that both the pandemic and social unrest accelerated in the last year. While relatively new to delivery and takeout, the brand did have a firm base of app users and loyalty members to access with new models for digital ordering. And while other brands only started to look at esports out of necessity this year, Chipotle was already four years into its work with gamers.
Meanwhile on the social justice and values-conscious branding front, that box was checked at the brand’s inception. Who can forget the legendary long-form animation spot “The Scarecrow” from 2013, promoting local, fresh food sourcing to Fiona Apple’s haunting rendition of “Pure Imagination”? If you don’t, Google it now. We’ll wait.
Stephanie Perdue, Chipotle’s vice president of brand marketing, explains how Chipotle not only doubled down on all of these preexisting strengths during the pandemic year, they looked for new ways to leverage digital, gaming and even values-driven branding.
We sat down with Perdue in advance of MediaPost’s May 26-27 QSR Brand Insider virtual summit, where many of the leading QSR and fast casual brands will share their smartest innovations of this crisis year. Chipotle will be joined by Dominos, KFC, Church’s Chicken, Jack in the Box, Focus Brands, Shake Shack, Pancheros, and many more. You can listen to the entire podcast here.
MediaPost: How did Chipotle experience the pandemic when much of your physical footprint shut down?
Stephanie Perdue: Our major source of business from people coming into the restaurant, about 80% of sales, was suddenly shut down. We pivoted our marketing into digital-first, initiating free delivery and really getting customers introduced to that way of getting Chipotle for the first time.
We had a radical change to our media mix. We basically looked at ways that we were being successful already connecting to our consumers digitally, whether that was through CRM, our esports platform, or through social. And we looked at unique ways to engage [with] the consumer in those channels.
We did a lot of firsts for the brand, including hosting our own gaming tournaments on Twitch, where challengers could play against pros, connecting our customers [with] celebrities and athletes in a period of time where it was pretty devoid of entertainment.
And then figuring out things we could do to help the community. I think what was critical for us was looking at our digital ecosystem, figuring out how to expand it, reach our consumers in different ways, changing our media mix overnight entirely, changing our advertising, and then figuring out a way to let our purpose guide us in entirely new ways.
MP: Let's start with the app relationship. How much were your consumers already accustomed to working with the Chipotle brand digitally?
Perdue: About 18% of our sales came through digital channels. We had very little, under 10%, overlap with our in-restaurant customers. We had a strong digital base, but again, 80% of our business was affected overnight, and those customers were not using digital.
We really had to create an awareness trial of the channel, expand our third-party delivery relationships. And we were also lucky we had a really strong and thriving rewards program where, in a year right before the pandemic happened, we had 10 million members.
But that communication channel became even more important to us during the pandemic. It became a way for us to communicate directly with the customer. Fortunately, that 10 million member base grew to over 20 million today.
MP: What were the most effective media tactics that you used to drive people toward a new delivery takeout structure?
Perdue: We saw a lot of success and shifting into paid social, a lot of success in moving into streaming as people were consuming content totally differently at home during the pandemic. We saw a tremendous amount of success in esports, in live streaming platforms like Twitch. Again, I think our owned channels became a real source of strength during this time.
MP: Chipotle has more experience in esports than most brands. What do marketers who remain reticent about this channel need to know about how to leverage that massive esports scale?
Perdue: We've obviously had a lot of success in social, and that's been about partnering with creators who love our brand. We took that same approach in gaming. The gamers that we partner with, they've been eating and love Chipotle, they were already talking about that in their live stream.
The first thing we did, and I would recommend for others, is to partner your brand with those gamers and streamers who already naturally have a connection to your brand. It's very important to be authentic in that community and to have a long-term commitment. Chipotle has been in the gaming space since 2016, and for us it's been about increasing our investment in the space.
A creator team that has been really wonderful to work with is the 100 Thieves. They've been the hugest fans of Chipotle before we even started working with them. We were doing a lot of physical events before the pandemic, and so what we did is we took those esports events from physical to digital, and so we hosted virtual tournaments on Twitch where we could get our consumer base excited about being able to play against pro gamers and celebrities.
When you take a look at those events and engagement that we got for multiple hours, and the participants that we got in terms of reach across the pro gamers that we worked with against our followers on Twitch, it definitely proved a great ROI. It's a group that already is native from a digital ordering standpoint. So to talk about real food that's basically easy to deliver right to your door, I mean, you couldn't find a better audience to talk about the message to.
MP: How will your media mix be reshuffled permanently by this past year’s experience?
Perdue: It allowed us to experiment more with our digital mix, and I think it proved out to be successful. We saw strong ROI. As for our physical locations, we're seeing customers come back in as people are vaccinated. Even with the awareness of convenience channels like mobile pickup in our restaurants, we're seeing a huge shift of people come back into restaurants.
So broader awareness vehicles like TV are extremely effective, so we're continuing to invest. I think we all know that the consumer is super-fragmented when it comes to media consumption. We really take from an earned, owned, and paid perspective. I think we're at our best when we're hitting all of those channels.
MP: As a brand, how do you differentiate in a cluttered QSR market with a lot of upstarts with innovative messaging and product?
Perdue: When Chipotle started 20 years ago, I think the founder had a vision that was completely differentiated and that is relevant today. He believed that food with integrity separated Chipotle from all other restaurants, and it still does today. When you think about how Chipotle is one of the largest national restaurant groups in terms of buying local produce, in terms of buying organic produce, when you think about its commitment over time to no artificial ingredients, flavors, colors, preservatives, no GMOs, its commitment to real ingredients, and where we train the people that work in our restaurants to have real culinary skills -- to me, that is the differentiator.
MP: What is the messaging now, and how do you take a message like that and weave it into brand-building?
Perdue: I think it permeates everything that we do. From a Super Bowl ad where we're asking viewers, “Can a burrito change the world?” And looking at that from the lens of a young boy, and thinking about, well, what if the world grew things more organically and sourced locally? And thinking about the impact that higher sourcing practices could have. I think that was a key message of our Super Bowl spot.
But it goes down to, you know, the personalized emails that we send to our consumers about the impact they're having on the environment with an environmental tracker that we call the Real Footprint. Every time they order on our app, they get to see the way Chipotle sources the ingredients versus conventionally sourced ones; how much water they're saving for the environment; how many antibiotics they're keeping out of [the] land in terms of power reducing carbon emissions with that purchase. It stems from, at the highest level, [that] Super Bowl ad to that personalized email.
MP: As a company, Chipotle has long taken a values-driven approach, but how does the brand respond when it becomes a bandwagon and that becomes less of a differentiator?
Perdue: I think you double down. I mean, I think what we're hearing from younger generations is they want to align their values with the companies that they're purchasing from. And I don't think it's a fad, I think that's here to stay, and so kudos to Chipotle for trailblazing that path.
And I'm excited for a world where there is more social responsibility, where companies are using their scale for good. I mean, that's the way we think about our business. We think about how we can better responsibly source our ingredients. How can we champion the people that work in our restaurants, give them better career advancement opportunities? How do we do better for the environment? I think these are all things companies should be thinking about, and I think they're going to separate the companies that are here 10 years from now.
MP: What was Chipotle doing on the menu and product innovation side that was responding to the pandemic?
Perdue: I think there's just an overall awareness of wanting to eat better. We had a lot of success with a platform we call Lifestyle Bowls, which is basically one-click orders to bowls that really fit your lifestyle. If you're on keto lifestyle, if you're on Whole30, if you're vegan, if you're vegetarian.
We launched those pre-pandemic and had a lot of success. With that launch we knew digital-only menu items are a thing, and our customer base gets really excited about them. And then we also recognized that people wanted more vegetables in their diet, people wanted to have choices that help them adhere to their goals.
During the pandemic we launched cauliflower rice: fresh cauliflower brought in the restaurant, grilled and season with lemon cilantro. It’s an entirely new way to eat Chipotle because of way less net carbs and more vegetables in your diet.
We also launched this past March the quesadilla, which is digital only, so you can only get that in the app and chipotle.com. It's just more recognizing that consumer needs have changed, and then being able to respond quickly and figure out how to do all this in a remote environment.
MP: What's been the biggest surprise for you in the last year?
Perdue: I would say I'm more delighted by just the resilience of our employees to come in and make sure that we're getting food to people. I think it brought out a lot of ingenuity and better practices for the long term, for the future.
It's a huge crisis, but that's the most surprising or thrilling thing to see is that, look, we're going to do things differently than we did last February. And that rapid adoption of change of those consumer behaviors, from consuming media to what you value to what you want brands to do for your community, all that got sped up in such a short amount of time. I think that's the most exciting as we look towards the future, and the most surprising. I don't think we've seen that level of a change in behavior in a year.