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Chipotle’s Crypto Push Aims to Add Buzz to the Brand

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Chipotle’s Crypto Push Aims to Add Buzz to the Brand

The recent fall in the crypto market, which lost $1 trillion in value in May and June, cast doubt on the viability of digital currency.

However, Chipotle Mexican Grill Inc. (NYSE: CMG) argues that crypto is the future, at least for its marketing efforts.

The Newport Beach-based restaurant chain last month launched a game called “Buy the Dip,” which gave away more than $200,000 in crypto. This followed an announcement in June, when Orange County’s second most valuable public company said it would accept crypto as payment.

Chipotle is one of a handful of large restaurant chains, such as KFC, Starbucks, Burger King, Subway and pizza hutwhich now accepts crypto as currency.

“About half of our current customers are millennials or Gen Z, and we know these demographics have a strong affinity for the crypto space,” said Tressie Lieberman, vice president of digital and offsite marketing at Chipotle, to the Business Journal.

“Our overarching goal is to build and reach the next generation of Chipotle fandom,” Lieberman said (see story, this page/jump page).

The restaurateur, which has more than 3,000 locations across the business, has not disclosed how many customers have used crypto to pay for their meals to date.

Buzz Drives Results

Lieberman’s comments echo those of Chipotle’s chief executive Brian Nicolwho told analysts late last month that the company’s marketing efforts are designed to make “the brand visible, relevant and appreciated.”

New promotions such as the crypto game offer are “an opportunity to build buzz around the brand,” he said.

The efforts seem to be paying off. Chipotle reported a 17% increase in second-quarter revenue to $2.2 billion.

Digital controls accounted for 39% of sales last quarter, one of the highest levels of any major restaurant chain.

Shares of the company jumped 16% to $1,529 per share after the release of second-quarter results late last month.

Chipotle had a market capitalization of nearly $45 billion at the end of last week, not far off its valuation at the start of the year.

Other Technology Initiatives

Besides crypto, another digital community that Chipotle has set its sights on is the metaverse.

In partnership with the digital platform Roblox Corp. (NYSE: RBLX), Chipotle launched a digital burrito-making experience in April. It is the first national brand to serve virtual food on Roblox.

The promotion awarded the first 100,000 Roblox players who launched a virtual “Burrito Bucks” burrito, which users could redeem for a free entry code.

The initiative “led to one of our best digital sales days and marks the first time a brand has enabled Roblox players to earn and exchange Roblox virtual currency for real-world items,” Nicol said.

The technology is also being used in the company’s frontline operations at its restaurants.

During last month’s earnings call, company officials noted new software the chain is implementing to increase efficiency and improve wait times for digital and in-store customers.

Recent surges in the restaurant’s staff – the company now has 100,000 employees – means new hires are still adjusting to working in Chipotle’s rapidly changing environment.

“A lot of these people haven’t experienced how fast the line can move,” Niccol said. “So in some cases people think they’re moving pretty fast[ly]when in fact we could go much faster.

To update employees, Chipotle officials said management will retrain its crew members and, in time, master the new labor management tool the company recently rolled out.

“It’s a whole new tool,” said the CFO Jack Hartung said. “It’s like learning to drive a Ferrari. But the capabilities are far beyond what our previous tool allowed.

Chipotle is also studying an automated kitchen production system to further improve efficiency. Through its $50 million venture capital fund, Cultivate Next, the company last month invested in a foodservice platform, named Hyphen, that automates kitchen operations for restaurateurs, operators and budding chefs. Financial terms of the investment were not immediately disclosed.

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