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Chipotle Taps Into a Growing Trend for a New Menu Item

CEO Brian Niccol has changed the company's research and testing process since he came over from Taco Bell.

When Brian Niccol left Yum Brands'  (YUM) - Get Yum! Brands, Inc. Report Taco Bell to take over as chief executive at Chipotle (CMG) - Get Chipotle Mexican Grill, Inc. Report, many expected him to bring the same menu innovation and flurry of limited-time offers that his former employer used so well.

Instead of following Taco Bell's approach, where the company uses new products and limited offers to drive audience and media attention, Niccol has taken a more measured approach in his new job. 

Chipotle has added items to the menu and it has had success with LTOs, including brisket and carne asada, but it has done so very carefully.

Niccol absolutely understands that a new menu item can bring back lapsed customers, excite regulars to spend more money, and, of course, get media attention. But he also knows that doing it too often can cheapen your brand.

Because of that, the Chipotle CEO has called his shots and made changes to the menu only when they appear to be difference makers.

He has done that again to start 2022: Chipotle has added plant-based chorizo to its menu available for a limited time at U.S. locations.

Chipotle Joins the Plant-Based Trend

Plant-based meat has been a growing trend that has had mixed success on fast- food and quick-serve restaurant menus. Dunkin', for example, rolled out Beyond Meat (BYND) - Get Beyond Meat, Inc. Report plant-based sausage across its chain with a lot of fanfare, only to quietly mostly abandon it in most of its locations after sales were slow.

It may be a case of plant-based meat needing to be placed in front of the right audience as demand has grown. Impossible Foods, which has a deal with Burger King  (QSR) - Get Restaurant Brands International Inc Report for the Impossible Whopper, a plant-based burger, shared some growth statistics on its website:

Just take a look at the shocking numbers: the latest report by The Plant-Based Foods Association showed (opens in a new tab) that plant-based food retail sales in 2020 grew much faster at 27 percent than the total US retail food market at 15 percent. Plant-based meat sales, in particular, increased by 45 percent.

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Consumers aren't just looking to buy meat made from plants from retail outlets, though. They also want to order unique dishes made with it from their local restaurants. The astounding numbers coming from delivery apps, whose business more than doubled from the end of 2019 to the end of 2020 due to the pandemic, are particularly persuasive. An August report by DoorDash, one of the largest such apps by market share, showed that orders for vegan burgers increased by 433 percent (opens in a new tab) from January 2020 to the end of June 2020.

Impossible, of course, has a dog (well, a plant-based dog) in this race, but demand has grown and Chipotle may have the clientele that is looking for plant-based alternatives.

What Is Chipotle's Plant-Based Chorizo Offering?

The burrito chain dropped meat-based chorizo from its menu in 2017.

It calls its new plant-based chorizo a "new, craveable protein." The company added that the new item is "made using all real, fresh ingredients grown on a farm, not in a lab."

Since Niccol joined Chipotle, he has installed a tiered system for testing potential new menu additions. Items are tested in a few stores, then on a wider basis. And only then does the Newport Beach, Calif., company decide whether to roll them out nationally. In this case, plant-based chorizo was tested in Denver and Indianapolis in August 2021.

The company said that it listened to customer feedback, and "strong test results" led to the decision to try plant-based chorizo on a national basis.

"Chipotle's Plant-Based Chorizo has the deep, rich flavor and a slight kick that chorizo fans crave," the company said in a news release. 

"Chipotle peppers, ripe tomato paste, crushed garlic, Spanish smoked paprika, and extra virgin olive oil combine with natural protein from freshly grown peas to deliver a full-flavored vegan protein."

Plant-based chorizo is certified vegan, has 16 grams of protein per 4-ounce serving, and is made without artificial flavors, colors, preservatives, grains, gluten, or soy.