WEBVTT - Businessweek Talks- Chipotle CEO Brian Niccol 0:00:00.160 --> 0:00:03.760 This is Bloomberg Business Week with Carol Masser and Jason 0:00:03.840 --> 0:00:07.560 Kelly on Bloomberg Radio. With us is the CEO of 0:00:07.600 --> 0:00:10.920 Chipotle Mexican Grill. We're talking about Brian Nicol, who joins 0:00:11.000 --> 0:00:14.920 us live right now from Newport Beach, California. Brian, so 0:00:15.000 --> 0:00:17.480 great to have you here with us, because I think 0:00:17.520 --> 0:00:20.320 about when you and I spoke back in early March, 0:00:20.880 --> 0:00:23.959 it was just days before the world shut down. Um, 0:00:24.000 --> 0:00:26.639 so much has happened since then, and you gave me 0:00:26.680 --> 0:00:28.240 a lot of time there, and you're so gracious to 0:00:28.280 --> 0:00:30.479 come back. Tell me a little bit about kind of 0:00:30.520 --> 0:00:32.360 where we are right now in this world. How do 0:00:32.400 --> 0:00:34.800 you see the pandemic? Are we on the other side 0:00:34.800 --> 0:00:39.640 of it yet? Yeah, Carol, good to see you again. 0:00:39.840 --> 0:00:42.920 And uh yeah, crazy to think we were just a 0:00:42.920 --> 0:00:47.519 couple of days before everything really came to a grinding halt. Unfortunately, 0:00:47.720 --> 0:00:50.600 in the pandemic really took off. But I think where 0:00:50.640 --> 0:00:54.240 we are right now is in a state where I 0:00:54.240 --> 0:00:57.440 think everybody understands what they need to be doing. Uh 0:00:57.480 --> 0:01:01.160 And so as a result, I think people are starting, 0:01:01.480 --> 0:01:03.959 you know, to demonstrate good behavior so that we all 0:01:04.000 --> 0:01:07.720 contributing really containing the pandemic. We've been very fortunate in 0:01:07.760 --> 0:01:10.880 our restaurants where our employees, I think we're doing a 0:01:10.880 --> 0:01:12.840 lot of the right things. We put a lot of 0:01:12.880 --> 0:01:16.240 the right food safety practices and wellness practices in place. 0:01:16.640 --> 0:01:20.960 So that's giving people confidence to you know, basically used 0:01:20.959 --> 0:01:23.759 to Polly as a meal solution. And then obviously our 0:01:23.800 --> 0:01:26.400 digital business is giving people access for that off premise 0:01:26.440 --> 0:01:28.880 occasion that is become really critical. Yeah, and I want 0:01:28.920 --> 0:01:30.399 to talk about that because I feel like you are 0:01:30.440 --> 0:01:33.000 very prescient in terms of the investments you made and 0:01:33.040 --> 0:01:34.759 when you came in about two and a half years ago. 0:01:35.120 --> 0:01:37.160 Focusing on that. Before we get to that, though, I 0:01:37.200 --> 0:01:40.120 do want to ask you, are you preparing your company 0:01:40.240 --> 0:01:43.360 your staff for a second round with the virus come 0:01:43.520 --> 0:01:46.640 the fall and winter months, And I do wonder if 0:01:46.640 --> 0:01:49.680 you're kind of taking precautions, are setting up um, you know, 0:01:49.800 --> 0:01:54.440 just in case. Yeah, Look, I think we definitely have 0:01:54.560 --> 0:01:58.080 uncertainty in front of us UM and so really the 0:01:58.240 --> 0:02:02.400 approach we're taking is we're following the recommendations of the 0:02:02.440 --> 0:02:05.000 c d C and a lot of the local health 0:02:05.040 --> 0:02:08.240 departments around making sure our employees are wearing masks, we're 0:02:08.240 --> 0:02:11.760 practicing the social distancing. Uh. You know, no one works 0:02:11.800 --> 0:02:15.440 if they're not feeling healthy. UM. And you know, obviously 0:02:15.480 --> 0:02:19.320 we continue to be in a working, remote environment, so 0:02:19.600 --> 0:02:21.320 we want to take all the precautions we can to 0:02:21.400 --> 0:02:25.640 hopefully contain the pandemic and get to the other side 0:02:25.639 --> 0:02:28.639 of this. UM. You know, it'd be a real disappointment 0:02:28.680 --> 0:02:32.760 if we have a setback, and I'm really hopeful that 0:02:32.840 --> 0:02:35.360 if we do all the right things as a company, 0:02:35.400 --> 0:02:38.640 as a community, we can avoid that setback. Do you 0:02:38.639 --> 0:02:43.359 think we'll get one? You know, you know, honestly, I 0:02:43.680 --> 0:02:46.880 I really hope people do the right things going forward 0:02:47.480 --> 0:02:50.720 so that we don't you know, uh, I think the 0:02:50.760 --> 0:02:53.280 big recommendations out there, you know, go get flu shots, 0:02:53.280 --> 0:02:56.760 were your masks, practice social distance, avoid big crowds, and 0:02:56.800 --> 0:02:59.760 that's our best bed to avoid a real you know, 0:03:00.120 --> 0:03:02.880 your flare up. But you know, cold and flu season. 0:03:03.400 --> 0:03:05.400 More people are probably not going to feel great, and 0:03:05.400 --> 0:03:08.200 it's important people get tested. They understand whether they have 0:03:08.320 --> 0:03:11.240 COVID or just a common cold or flu, and then 0:03:11.280 --> 0:03:13.919 they need to do the right things to protect themselves, 0:03:13.919 --> 0:03:16.240 their family, their friends, and their communities. And I think 0:03:16.240 --> 0:03:20.120 if people just take that simple approach, UM, I think 0:03:20.280 --> 0:03:22.399 you know, we'll get past this a lot faster than 0:03:23.320 --> 0:03:26.200 not taking those safety precautions. You know, it's interesting, Brian, 0:03:26.280 --> 0:03:28.080 you say doing the right thing too. We were talking 0:03:28.120 --> 0:03:30.440 with UM a doctor earlier, and I think a lot 0:03:30.480 --> 0:03:32.400 of folks are talking about a vaccine. When we finally 0:03:32.440 --> 0:03:36.240 get one, UM, there are now concerned that people won't 0:03:36.240 --> 0:03:39.880 take the vaccine. Would you require your employees, your staff 0:03:40.280 --> 0:03:45.400 to take a vaccine in order to work. No, you know, 0:03:45.480 --> 0:03:49.440 we would not require people to take the vaccine. UM. Obviously, 0:03:49.800 --> 0:03:51.400 I would want to do everything I can to make 0:03:51.400 --> 0:03:54.880 sure that they have access to the vaccine, especially those 0:03:54.920 --> 0:03:57.200 that are in those high risk groups. But I think 0:03:57.560 --> 0:04:02.920 you know, your health and wellness is ultimately your personal decision. UM. 0:04:02.960 --> 0:04:06.520 Whatever your decision is, though, if you aren't feeling healthy, UM, 0:04:06.560 --> 0:04:09.800 and you happen to have COVID, we do need you to, 0:04:09.920 --> 0:04:12.640 you know, take those precautions to not get other people infected. 0:04:12.720 --> 0:04:15.640 But I'm focused on trying to stay in touch with people, 0:04:15.640 --> 0:04:19.560 so I understand when vaccines get approved, how they will 0:04:19.600 --> 0:04:23.600 be distributed, and how I best get our employees access 0:04:23.640 --> 0:04:26.320 to those vaccines. UM. But you know, at the end 0:04:26.320 --> 0:04:29.800 of the day, they need to make that decision for themselves. Well, 0:04:29.800 --> 0:04:31.920 and I do wonder too, you know, I think that's 0:04:31.920 --> 0:04:34.120 really interesting to hear. And I feel like Chippoli has 0:04:34.120 --> 0:04:36.680 been throughout its history a company that thinks a lot 0:04:36.680 --> 0:04:39.480 about its employee base. So how do you keep you know, 0:04:39.640 --> 0:04:42.760 your employees safe, motivate motivated during these trying times? And 0:04:42.839 --> 0:04:44.800 we talk about, you know, corporate culture. When you've got 0:04:44.800 --> 0:04:47.240 people at home and people all over the place, how 0:04:47.240 --> 0:04:49.760 do you keep though your workers who have to be 0:04:50.160 --> 0:04:52.120 at work in order to get the job done, how 0:04:52.160 --> 0:04:54.080 do you keep them motivated during these trying times? And 0:04:54.360 --> 0:04:57.280 I'm curious if you've made any employee policy changes during 0:04:57.279 --> 0:05:02.440 the pandemic. Yeah, Look, Carol, I think it's fortunately for us. 0:05:02.480 --> 0:05:05.200 We we've always been focused on our purpose, which is 0:05:05.240 --> 0:05:08.559 around this idea of cultivating a better world through food 0:05:08.560 --> 0:05:13.400 with integrity. And we've got some clear cultural values, um, 0:05:13.400 --> 0:05:17.520 you know around basically authenticity lives here, the movement is real, 0:05:18.200 --> 0:05:21.000 um you know, teach and taste Chipotle, and then the 0:05:21.080 --> 0:05:23.160 line is the moment of truth. And the reason why 0:05:23.240 --> 0:05:26.120 these values are really important is we've used them to 0:05:26.240 --> 0:05:30.239 guide a lot of our decisions. We believe our purpose 0:05:30.279 --> 0:05:33.200 and our values drive our culture. It's why people love 0:05:33.240 --> 0:05:36.600 to work at Chipotle. And we've been consistent, i think 0:05:36.600 --> 0:05:40.440 in all our decision making against our purpose and our values, 0:05:40.480 --> 0:05:42.480 and I think it's given a lot of our employees 0:05:42.560 --> 0:05:45.520 a sense of pride. Um. They love the fact that, 0:05:45.760 --> 0:05:49.720 you know, regardless of how hard um the decision is, 0:05:49.960 --> 0:05:53.440 we want to do the right thing for our communities, 0:05:54.040 --> 0:05:57.440 moving our purpose board and obviously our employees. So you know, 0:05:57.480 --> 0:05:59.280 we were fortunate we already had a lot of things 0:05:59.279 --> 0:06:03.159 in practice from a wellness standpoint, and you know, paid 0:06:03.200 --> 0:06:07.599 sick leave and uh, a lot of employee programs around healthcare, 0:06:07.680 --> 0:06:12.200 mental wellness. Um, you know, I'm sorry, mental health benefits 0:06:12.240 --> 0:06:14.800 that were available for not just the employee but their families. 0:06:15.120 --> 0:06:17.440 So we're trying to surround people with all the right 0:06:17.480 --> 0:06:20.680 things and those have been even more important in these 0:06:20.760 --> 0:06:24.919 challenging times. And you know, we've dialed up our communication. 0:06:25.120 --> 0:06:27.040 I'll tell you the other thing that has really been 0:06:27.080 --> 0:06:30.880 powerful is um, we have really worked hard to communicate 0:06:31.000 --> 0:06:36.359 with every single employee atripally, all ninety plus thousand of them. Um. 0:06:36.400 --> 0:06:41.000 You know, we're doing zooms and web calls and telephone calls. 0:06:41.360 --> 0:06:42.920 I just want to keep them up to date with 0:06:42.960 --> 0:06:47.000 the most um, you know, up to date information, and 0:06:47.680 --> 0:06:50.520 the more they know, the more they can feel confident 0:06:50.560 --> 0:06:53.279 that we're making the right decisions and they're working in 0:06:53.279 --> 0:06:57.320 a safe environment. Um. I've had the pleasure of making 0:06:57.320 --> 0:06:59.719 some day trips visiting restaurants, and I can tell you 0:07:00.200 --> 0:07:02.760 it really gets you pumped up because our employees are 0:07:02.760 --> 0:07:06.320 so grateful, um to be working and to be a 0:07:06.320 --> 0:07:09.840 part of Chipotle and making a difference in their communities 0:07:09.880 --> 0:07:13.080 and moving our company and culture forward. Well, and I'm 0:07:13.080 --> 0:07:15.520 guessing you're visiting a lot more workers because you guys 0:07:15.520 --> 0:07:18.920 have been on a significant hiring push back into lie 0:07:19.000 --> 0:07:21.840 You talked about hiring about ten thousand workers. So how 0:07:21.880 --> 0:07:23.960 has that push gone so far? Where are you in 0:07:24.000 --> 0:07:28.320 that process? Yeah, it's been you know, we're very fortunate. 0:07:28.400 --> 0:07:33.000 People have been really excited to join Chipotle, and the 0:07:33.080 --> 0:07:37.760 applications have been, uh, you know, frankly, really exciting to 0:07:37.800 --> 0:07:40.280 see did you get something like seven hundred thousand? Didn't 0:07:40.280 --> 0:07:42.800 you get something like seven hundred thousand applications or something? 0:07:42.800 --> 0:07:46.760 It was crazy, you know, I don't remember what the numbers, 0:07:46.800 --> 0:07:50.160 but I wouldn't be surprised if that's close to right. Um, 0:07:50.320 --> 0:07:53.120 you know, because we have had you know, I saw 0:07:53.440 --> 0:07:55.680 we just had a job for one of our digital 0:07:55.760 --> 0:07:59.520 opportunities open up, and for just this one position, we 0:07:59.560 --> 0:08:02.360 had well over you know, I think three or four 0:08:02.440 --> 0:08:07.080 hundred applications, which is really amazing. UM. And you know, 0:08:07.160 --> 0:08:11.640 now you've times that out across ten thousand opportunities from 0:08:11.680 --> 0:08:15.120 you know, crew members all the way up to jobs 0:08:15.120 --> 0:08:18.040 that are support centers. And we've been very fortunate to 0:08:18.080 --> 0:08:21.400 attract really great people and we've been able to retain 0:08:21.520 --> 0:08:24.560 really great people. So we're we're feeling really fortunate with 0:08:24.600 --> 0:08:26.320 where we are with the people we have and the 0:08:26.360 --> 0:08:28.600 people that are drawn to to work at you pole 0:08:28.680 --> 0:08:30.720 and apply and one of you part of what we're doing. 0:08:30.920 --> 0:08:32.920 Are you seeing any tightness in the labor market? And 0:08:32.920 --> 0:08:36.640 I'm curious if you anticipate needing even more workers, uh, 0:08:36.720 --> 0:08:40.120 and if that's going to potentially you know, if there's 0:08:40.160 --> 0:08:46.080 tightness of the workforce alsolately to kind of higher wages here. Yeah. No, 0:08:46.200 --> 0:08:50.280 you know, we're not seeing, um an issue with applicant flow. 0:08:50.559 --> 0:08:53.679 You know, we're continue to see great access to great 0:08:53.720 --> 0:08:56.199 talent um and you know, I think one of the 0:08:56.200 --> 0:08:58.160 things why people are really drawn to folly is we 0:08:58.200 --> 0:09:01.840 have a tremendous growth story. Uh So it's always fun 0:09:01.880 --> 0:09:03.960 to be a part of a company that when you 0:09:04.160 --> 0:09:07.240 think about I'm joining today and this company, could you know, 0:09:07.360 --> 0:09:11.800 triple in revenue over the next decade, you know, double 0:09:11.960 --> 0:09:15.560 store count, you know, go from twenty hundred restaurants to 0:09:15.880 --> 0:09:20.040 five six thousand restaurants. Um. You know, they're really excited 0:09:20.040 --> 0:09:21.880 about all the growth right our our thing about our 0:09:21.920 --> 0:09:24.120 digital business. We we went from you know, a couple 0:09:24.160 --> 0:09:26.320 hundred million dollars to this year will be about probably 0:09:26.400 --> 0:09:29.440 two point four billion dollars worth of digital business. And 0:09:30.200 --> 0:09:33.160 people love to be a part of companies that have growth. 0:09:33.600 --> 0:09:36.920 And then what really attracts them here is they feel 0:09:36.920 --> 0:09:39.800 like it's very much aligned with their personal values. So 0:09:39.920 --> 0:09:43.320 they love the growth, they love the values, and they're 0:09:43.320 --> 0:09:45.280 excited to be a part of what our future is. 0:09:45.400 --> 0:09:47.880 And uh, you know, I keep telling our team, let's 0:09:47.920 --> 0:09:50.720 just make sure we're hiring the best possible people, but 0:09:50.800 --> 0:09:53.040 let's also make sure we're hiring the best possible people 0:09:53.080 --> 0:09:55.160 that really believe in our purpose and our values. And 0:09:55.679 --> 0:09:57.959 that's where I think we really strike gold. Brian, why 0:09:57.960 --> 0:10:00.520 do you think Chipotle has been so success a boosting 0:10:00.559 --> 0:10:04.840 sales in its digital delivery and delivery business. You guys 0:10:04.920 --> 0:10:07.680 have just done really well. As you talked about some 0:10:07.720 --> 0:10:10.160 of the numbers and some of the growth, it's pretty impressive. 0:10:10.240 --> 0:10:13.480 Why do you think it's worked so well? You know, 0:10:13.720 --> 0:10:17.000 I think we have been very focused on keeping the 0:10:17.040 --> 0:10:22.560 digital execution really simple and mirroring the same experience you 0:10:22.600 --> 0:10:25.440 get when you come into our restaurants. So you know, 0:10:25.480 --> 0:10:28.760 we've tried very hard to give you a digital experience 0:10:28.800 --> 0:10:32.240 that frankly is almost identical too as if you were 0:10:32.280 --> 0:10:34.880 in our restaurant moving down the line picking out, you know, 0:10:34.920 --> 0:10:37.080 how you want to make your bowl or burrito, And 0:10:37.559 --> 0:10:39.720 you know, we've stayed very committed to keeping it simple. 0:10:39.840 --> 0:10:41.360 You know, over and over again what I hear people 0:10:41.400 --> 0:10:43.280 say is, wow, I love your rapp It's so easy 0:10:43.320 --> 0:10:46.240 to use, and then it's so easy to actually get 0:10:46.240 --> 0:10:48.880 the food when it's time to pick it up. So um, 0:10:48.920 --> 0:10:52.080 you know, just the aspect of keeping it very simple, 0:10:52.559 --> 0:10:55.200 really convenient. And then you know, this has always been 0:10:55.200 --> 0:10:58.800 at the corruptible. They were really fast and were tremendous value. 0:10:58.880 --> 0:11:01.760 So we just give people another access mode to get 0:11:01.840 --> 0:11:05.560 great culinary, great ingredients done exactly how they want it, 0:11:05.960 --> 0:11:09.320 and uh, you know, at a tremendous value. So it's 0:11:09.360 --> 0:11:11.240 it's working out really well because if you want to 0:11:11.320 --> 0:11:14.199 order ahead, grab it and go. If you need it delivered, 0:11:14.360 --> 0:11:16.440 we can deliver it. If you want to run in, 0:11:16.840 --> 0:11:18.960 move down the line and have that eye to eye, 0:11:19.280 --> 0:11:21.800 you know, contact, so you can get the brito exactly 0:11:21.840 --> 0:11:24.120 the way you want it. Um, we have all these 0:11:24.160 --> 0:11:26.439 avenues available for you, and but at the core of 0:11:26.480 --> 0:11:30.440 it is great ingredients, great culinary and then you end 0:11:30.520 --> 0:11:33.320 up with just delicious burritos and bowls. So you know, 0:11:33.600 --> 0:11:35.120 at the end of the day, we are still a 0:11:35.200 --> 0:11:38.520 restaurant company that is committed to changing food culture. Hey, bron, 0:11:38.600 --> 0:11:39.960 you know back in March you did say to me 0:11:40.000 --> 0:11:42.720 that you thought digital could be about of your business 0:11:42.720 --> 0:11:44.760 and be a multibillion dollar business over the next three 0:11:44.760 --> 0:11:48.120 to five years. That still feel about real and likely 0:11:48.640 --> 0:11:52.199 or even more perhaps Well, well, yeah, you know, and 0:11:52.720 --> 0:11:56.600 you know, unfortunately, Carol, that was before it became eighty 0:11:56.679 --> 0:12:00.040 percent of our business um for a time. But you 0:12:00.080 --> 0:12:02.200 know you probably saw on our most recent earnings report 0:12:02.280 --> 0:12:06.000 we're in that forty to fifty range and uh, you know, 0:12:06.000 --> 0:12:09.360 obviously that will continue to fluctuate as the dining rooms reopen, 0:12:09.440 --> 0:12:12.720 But I definitely think our digital business is going to 0:12:12.760 --> 0:12:14.959 stay around as our dining room business comes back, So 0:12:15.000 --> 0:12:19.560 it'll stay among that level you think. I think there's 0:12:19.559 --> 0:12:23.240 a real possibility that's where it could stick. Yeah, So listen. 0:12:23.280 --> 0:12:24.920 One thing I got to ask you, Brian is and 0:12:25.040 --> 0:12:27.800 I know, um all the CEO as we talked to, 0:12:27.880 --> 0:12:31.760 they don't have a ton of visibility at this point. So, UM, 0:12:31.800 --> 0:12:34.720 I do wonder what metrics do you look at? Is 0:12:34.760 --> 0:12:38.120 it consumer data points? Is it you know, the app, 0:12:38.200 --> 0:12:40.080 the digital what are you looking at to get an 0:12:40.120 --> 0:12:43.600 idea of how healthy the consumer is? Um? And maybe 0:12:43.840 --> 0:12:49.120 what the rest of looks like at this point. Yeah, 0:12:49.280 --> 0:12:51.800 you're exactly right, Carol. There's a lot of uncertainty. I'm 0:12:51.840 --> 0:12:54.400 sure if you talk to a lot of my peers 0:12:54.400 --> 0:12:56.160 that we could rattle off the list of all the 0:12:56.200 --> 0:12:59.439 uncertainties in front of us. What we've decided to really 0:12:59.480 --> 0:13:02.560 stay folks based on, is okay, what can What are 0:13:02.559 --> 0:13:05.439 the things we can control, and the things we can 0:13:05.520 --> 0:13:08.000 control is making sure that we have a really safe 0:13:08.080 --> 0:13:11.040 environment for employees to work in, a safe environment that 0:13:11.040 --> 0:13:15.559 our customers believe in and trust. UM. We know, if 0:13:15.600 --> 0:13:19.200 we do those two things, uh, we continue to get 0:13:19.240 --> 0:13:24.520 people's trust and then ultimately their business around their meal occasions. 0:13:24.600 --> 0:13:27.520 And so we continue to really monitor how we as 0:13:27.559 --> 0:13:29.520 a brand are doing on the things that we can control. 0:13:29.640 --> 0:13:31.479 You know, are we doing a good job of communicating 0:13:31.520 --> 0:13:34.719 the safety, Are we're doing a good job of communicating 0:13:35.200 --> 0:13:37.920 why you can feel great about these ingredients, why you 0:13:37.920 --> 0:13:41.840 can feel great about getting that greed over bowl from Chipotle? UM? 0:13:42.000 --> 0:13:43.719 And then obviously we're paying attention to a lot of 0:13:43.720 --> 0:13:48.680 the macros to understand the health of the consumer. UM. 0:13:48.840 --> 0:13:52.000 And you know, obviously, depending on where you are in 0:13:52.040 --> 0:13:54.000 the country, we're seeing a lot of different things. But 0:13:54.679 --> 0:13:57.679 you know, for the most part, customers and consumers are 0:13:57.720 --> 0:14:01.840 still wanting to order food out, whether um that's from 0:14:02.080 --> 0:14:08.439 you know, uh, their local restaurant or somebody like a Chipotle. UM. 0:14:08.480 --> 0:14:11.199 You know, we're definitely seeing them fatigue a little bit 0:14:11.200 --> 0:14:14.160 on going to the grocery store, moating up and cooking 0:14:14.200 --> 0:14:16.679 all the time. Brian, I feel like there's always something 0:14:16.760 --> 0:14:19.440 getting in our way, whether it's the virus or it's 0:14:19.440 --> 0:14:22.640 the president, and I do unfortunately have to um leave 0:14:22.680 --> 0:14:24.720 it there because we do have to head to Washington 0:14:24.800 --> 0:14:26.960 to listen to the President. I do appreciate that your 0:14:27.000 --> 0:14:28.760 time as always, and hopefully we can catch up soon. 0:14:28.800 --> 0:14:30.760 Brian Nichol, here's the CEO of Chipotle.