Chipotle Mexican Grill has ambitions beyond burritos.
This summer, the company is growing two new fast-food chains for Chipotle loyalists hungry for more variety. ShopHouse serves Southeast Asian-style rice bowls and Pizzeria Locale serves gourmet pizza. Like the 1,600 eateries in the Chipotle chain, the newcomers offer counter service that enables diners to customize meals made from fresh, local, mostly organic ingredients and naturally raised meats.
ShopHouse, which is wholly owned by Chipotle, quietly launched a single test restaurant in Washington, D.C., in 2011. By the end of this year, it will have 10-12 outlets in D.C. and Los Angeles. Shop house is the Asian name for buildings where families live upstairs and operate restaurants or markets on the ground floor.
Pizzeria Locale, a partnership with restaurateurs Bobby Stuckey and Lachlan Mackinnon-Patterson, launched its prototype outlet in May 2013 in Denver and will open a second location in Denver by the end of the year. Pizzeria Locale offers made-to-order pies cooked in less than two minutes in a rotating oven.
“Chipotle picked Southeast Asian fare because founder Steve Ells likes the big flavors of that cuisine. And [the company] invested in the pizzeria because Steve is impressed by the owners’ expertise and the way they run their business,” said a Chipotle representative.
The new chains are designed to appeal to the same customer base as their parent and most are located near existing Chipotle restaurants. They are being promoted with coupons distributed in Chipotle outlets and with other co-marketing efforts, the rep said.
ShopHouse also is participating in this year’s Chipotle Cultivate Festival series. The free, one-day events include cooking demonstrations by celebrity chefs, live music, local food artisans, breweries, wineries, a special Chipotle menu and educational activities about animal welfare, GMOs and processed foods. The series will begin June 7 in San Francisco and travel to Minneapolis on Aug. 23 and the Dallas-Fort Worth area on Oct. 18.
Experts say Chipotle’s decision to develop new chains will help it maximize its supplier relationships, extend its brand equity and spread its “food with integrity” philosophy. “Chipotle has invested in building relationships with local farmers, so diversifying creates a more sustainable system,” said Mark Figliulo, CEO of New York shop Figliulo & Partners.
“In the hyper-competitive world of fast-casual dining, leveraging like-brands gives credibility to the new brands and expands the parent brand’s higher purpose,” said Scott Davis, chief growth officer at Prophet, a brand consultancy.
Davis added that Chipotle would be wise to let the new eateries bask in the glow of the Chipotle halo, “while also allowing them to flourish on their own merits.” He pointed to Evolution Fresh juices—owned and promoted by Starbucks—as a successful example of a legacy parent giving a “soft lift” to a new brand.