Just recently, Chipotle Mexican Grill Inc., or simply Chipotle, announced that they are testing queso in the City of New York. This is in response to the demand from their customers for them to start selling the sauce like their competitors Qdoba Mexican Eats and Moe’s Southwest Grill.
It should have been the start of something good for the company, however, there were reports which said that Chipotle voluntarily closed a branch in Virginia after people reportedly got sick after eating there. As a result, the stock plunged 7% and that means more than $700 million in market value was wiped out.
It was not the first time that the company got involved in foodborne illness outbreaks, that is why this recent one can serve as a reminder for them to get their customers’ focus back on their food. This is where the queso comes in.
Aside from the queso, Chipotle is also testing some other items in New York. Some of these new food items include the bunuelos dessert with a chipotle chocolate dipping sauce, new salad mixes, an avocado-citrus dressing, and a new recipe for a frozen margarita. As expected though, it is the queso which has mainly gotten the consumers’ attention.
Can Queso be the Answer?
Limited to New York for the Time Being
According to Chipotle’s spokesperson, Chris Arnold, the queso could be made available quickly to other branches in other parts of the country, if the company decides to. But as of now, it is still uncertain if and whether queso and the other new items will be introduced nationally.
In an email, Arnold also mentioned that “We do believe in the case of the queso, it is something that could be quickly expanded from an operations standpoint if we wanted to do that.”
While many appreciate the new items being offered, some also say that the testing is perhaps a bit overdue, given the sales problems that the company has last year.
Why Did Chipotle Change Its Mind?
Although the news of Chipotle testing queso has been positively accepted by loyal customers, some can still remember that the company once refused to serve “goopy cheese” dip on its menu.
They also reportedly told customers before that in order to come up with queso, it has to be made with artificial stabilizers to keep its shiny liquid form. So, there is no such thing as an all-natural goopy cheese and there is no magical cow that squirts queso out. So, what made Chipotle change its mind?
According to Business Insider, Chipotle “found a way to crack the enigma of the all-natural queso code.” Executives of Chipotle also acknowledge the fact that many customers have been requesting the dish for quite a while already. They know that their competitors are selling it and the lack of queso on the menu is one of the reasons why certain customers do not go to Chipotle.
The reason why they waited this long to add queso on their menu is that they found it difficult to make a product that will fit their standards. It took a while because they refuse to use industrial additives, added colors, flavors, and preservatives, but they already found a workaround.
Product Expansion for Improvement of Sales
According to NRN data, Chipotle’s unit volumes declined last year by 23%. But, even though sales have been picking up this year, the company is still far from the high volumes and high margins that it experienced before the unfortunate incidents happened.
One of the things that the company is looking at this year is the expansion of its product line. It does not even matter whether the new products are dipping sauces or side items. What’s important is the expansion itself as some of the most successful reversal efforts in retail include customer-first initiatives such as this one. It helps restore habit from past failed attempts, while also enticing a number of first-timers.
Since Chipotle customers have been requesting the food chain to develop a queso sauce, like its rivals, finally adding the product will likely generate additional sales. Even if it is from customers who will add the new product or products to their orders, it will still make a difference at the end of the day.
Although realistically, adding queso on the menu will not bring back lost volumes and margins, giving in to the request of their customers and providing them something that they have wanted for so long is a great move for the company. This move can actually be considered as a no-brainer, considering that the company is in need of efforts that will increase their sales and lift Chipotle back up again.