Chipotle 2012 Annual Report Download - page 8

and retaining people who can deliver that experience for each customer “one burrito at a time.” We provide each
customer with individual attention and make every effort to respond to customer suggestions and concerns in a
personal and hospitable way. We believe our focus on creating a positive and interactive experience helps build
loyalty and enthusiasm for our brand among general managers, crew members and customers alike.
The Basics. Each restaurant typically has a general manager (a position we’ve characterized as the most
important in the company), an apprentice manager (in about three-quarters of our restaurants), one or two hourly
service managers, one or two hourly kitchen managers and an average of 21 full and part-time crew members.
We generally have two shifts at our restaurants, which simplifies scheduling and provides stability for our
employees. We tend to have more employees in our busier restaurants. We cross-train our people so that each can
work a variety of stations, allowing us to work efficiently during our busiest times, while giving our people the
opportunity to develop a wider array of skills. Consistent with our emphasis on customer service, we encourage
our general managers and crew members to welcome and interact with customers throughout the day. In addition
to the employees serving our customers at each restaurant, we also have a field support system that includes
apprentice team leaders, team leaders or area managers, team directors, executive team directors or regional
directors, and restaurant support officers.
Supply Chain
Close Relationships with Suppliers. Maintaining the high levels of quality we expect in our restaurants
depends in part on our ability to acquire high-quality, fresh ingredients and other necessary supplies that meet our
specifications from reliable suppliers. Our distribution centers purchase from various suppliers we carefully
select based on quality and their understanding of our mission, and we seek to develop mutually beneficial long-
term relationships with suppliers. We work closely with our suppliers and use a mix of forward, fixed and
formula pricing protocols. We’ve tried to increase, where necessary, the number of suppliers for our ingredients,
which we believe can help mitigate pricing volatility and supply shortages, and we follow industry news, trade
issues, weather, exchange rates, foreign demand, crises and other world events that may affect our ingredient
prices. Certain key ingredients (beef, pork, chicken, beans, rice, sour cream, cheese, and tortillas) are purchased
from a small number of suppliers.
We generally do not purchase raw materials directly from farmers or other suppliers, but have selected and
approved suppliers from whom ingredients are purchased for our restaurants. Distribution centers purchase
ingredients and other supplies from suppliers we select and approve based on our quality specifications, and
purchase within the pricing guidelines and protocols we have established with the suppliers.
Distribution Arrangements. Ingredients and other supplies are delivered to our restaurants from 23
independently owned and operated regional distribution centers.
Marketing
Our marketing has always been based on the belief that the best and most recognizable brands aren’t built
through advertising or promotional campaigns alone, but rather through all of the ways people experience the
brand. So we pay close attention to all of these details, looking to keep our communications closely aligned with
the ways our customers experience Chipotle. Our advertising and promotional programs, in-store
communications, and other design elements all help to communicate something about what makes Chipotle
different from other fast food companies. Whether it’s engaging with our company via social media, participating
in our local events or simply eating a burrito at one of our restaurants, each interaction with a customer affords us
an important opportunity to build our brand.
Our advertising has generally included print, outdoor, transit and radio ads, but we are also incorporating
online advertising into the mix, and adding strategic promotions that demonstrate how Chipotle is different than
other restaurant concepts, or that connect us to like-minded individuals or organizations. Beyond these traditional
means, we are exploring new avenues of branded and unbranded content aimed at educating consumers about
issues that are important to us, and explaining why we are working to drive positive change in the nation’s food
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Annual Report