Chipotle CFO Jack Hartung
Chipotle has grown to become a staple of fast-casual dining. This growth and loyal fan base reflects in part the company’s insistence on sticking to core values of sustainability, or sourcing food ethically and locally. At a time when social and environmental awareness is increasing, Chipotle finds itself at an advantage. By prioritizing its core values, it demonstrates ethical businesses can be profitable businesses. I recently spoke with Chipotle’s CFO, Jack Hartung, about Chipotle’s sustainable business credentials and how his company has committed to greater investment in digital technology, customer experience and employee benefits like debt-free college and tuition reimbursement.
Jeff Thomson: Sustainability was one of the biggest business concerns of last year and is set to be even bigger this year. How does Chipotle, a company long known for its local sourcing, combine concern for sustainable and ethical practices with a robust bottom line? What is the CFO’s role in doing so?
Jack Hartung: Chipotle has long been committed to “Food With Integrity,” starting when we were a much smaller, private company. So, while the movement toward sustainability has become more popular recently, it’s been part of our DNA for decades. We built our business and our brand around this ethos, and we partnered with like-minded suppliers and farmers to build a unique and efficient supply chain around Food With Integrity which could grow with us. And because raising real food, using sustainable methods, typically costs more, from the earliest days we found efficiencies in other areas of our business, like building smaller restaurants that cost less to build and maintain, spending less on marketing and retaining a focused menu made from just 53 ingredients.
So, you could say our business model was built around our purpose almost from the beginning, allowing us to pay more for our premium ingredients, while providing great value for our customers, and generating strong margins and returns for our shareholders. Very few businesses are able to achieve all three of these results at the same time.
Thomson: Digital transformation accelerated across industries during the pandemic. The restaurant industry saw exceptional changes because of closures that forced consumers to order carry-out. How did Chipotle use digital technology to better meet consumer demands and make for a better customer experience? How has this transformation laid the foundations for a more digital way of doing business even after the pandemic?
Hartung: Chipotle has been investing in digital technologies to create a more seamless and convenient experience for our customers even before the pandemic. Specifically, we invested to add digital make lines in virtually all of our restaurants, which is a second food line where 100% of our digital orders are prepared. So, when our business shifted from under 20% digital at the beginning of 2020 to over 70% digital in just a few weeks, our teams and our technologies were ready.
We also invested in a rewards program to engage with our customers on a more personalized basis, and we’ve continued to invest in our app to make sure it is a frictionless experience [from which] our customers become attached to re-ordering. We also increased access and convenience for our guests by [re-envisioning] the layout of our restaurants to ensure our mobile order pick-up shelves are conveniently placed, and more than 70% of our new restaurants feature a “Chipotlane,” Chipotle’s signature mobile pick-up lanes that allow fans to order their food ahead of time on the Chipotle app or Chipotle.com and pick up their food without leaving their cars. We also opened a new Digital Kitchen prototype, where 100% of customer orders will come through the digital channels.
Thomson: Chipotle makes investment in its people a priority, including debt-free degree offerings to employees with more than 4 months of employment. Although degrees in finance/accounting are not included currently, how as CFO do you invest in your finance team in terms of training and education (e.g., data analytics, strategy, etc.) to keep them fit for purpose in a fast-moving, uncertain, and disruptive digital world?
Hartung: In addition to debt-free degrees, our existing Tuition Reimbursement Program allows eligible employees to be reimbursed for tuition, up to $5,250, at the school of their choice. Our robust employee value proposition also includes executive coaching for senior leaders through a service called BetterUp as well as continued training, education and upskilling opportunities through Udemy for Business, which is available to field leaders and above in the field and all Restaurant Support Center employees. Finally, since we are a growth company, we provide significant internal development opportunities for our folks in finance and accounting so they can learn about all areas of our business, gain exposure to all levels of senior management and can earn promotional opportunities as we grow together.
This article has been edited and condensed.
