Speaker 1: This is Bloomberg Business Week with Carol Masser and Jason
Speaker 1: Kelly on Bloomberg Radio. With us is the CEO of
Speaker 1: Chipotle Mexican Grill. We're talking about Brian Nicol, who joins
Speaker 1: us live right now from Newport Beach, California. Brian, so
Speaker 1: great to have you here with us, because I think
Speaker 1: about when you and I spoke back in early March,
Speaker 1: it was just days before the world shut down. Um,
Speaker 1: so much has happened since then, and you gave me
Speaker 1: a lot of time there, and you're so gracious to
Speaker 1: come back. Tell me a little bit about kind of
Speaker 1: where we are right now in this world. How do
Speaker 1: you see the pandemic? Are we on the other side
Speaker 1: of it yet? Yeah, Carol, good to see you again.
Speaker 1: And uh yeah, crazy to think we were just a
Speaker 1: couple of days before everything really came to a grinding halt. Unfortunately,
Speaker 1: in the pandemic really took off. But I think where
Speaker 1: we are right now is in a state where I
Speaker 1: think everybody understands what they need to be doing. Uh
Speaker 1: And so as a result, I think people are starting,
Speaker 1: you know, to demonstrate good behavior so that we all
Speaker 1: contributing really containing the pandemic. We've been very fortunate in
Speaker 1: our restaurants where our employees, I think we're doing a
Speaker 1: lot of the right things. We put a lot of
Speaker 1: the right food safety practices and wellness practices in place.
Speaker 1: So that's giving people confidence to you know, basically used
Speaker 1: to Polly as a meal solution. And then obviously our
Speaker 1: digital business is giving people access for that off premise
Speaker 1: occasion that is become really critical. Yeah, and I want
Speaker 1: to talk about that because I feel like you are
Speaker 1: very prescient in terms of the investments you made and
Speaker 1: when you came in about two and a half years ago.
Speaker 1: Focusing on that. Before we get to that, though, I
Speaker 1: do want to ask you, are you preparing your company
Speaker 1: your staff for a second round with the virus come
Speaker 1: the fall and winter months, And I do wonder if
Speaker 1: you're kind of taking precautions, are setting up um, you know,
Speaker 1: just in case. Yeah, Look, I think we definitely have
Speaker 1: uncertainty in front of us UM and so really the
Speaker 1: approach we're taking is we're following the recommendations of the
Speaker 1: c d C and a lot of the local health
Speaker 1: departments around making sure our employees are wearing masks, we're
Speaker 1: practicing the social distancing. Uh. You know, no one works
Speaker 1: if they're not feeling healthy. UM. And you know, obviously
Speaker 1: we continue to be in a working, remote environment, so
Speaker 1: we want to take all the precautions we can to
Speaker 1: hopefully contain the pandemic and get to the other side
Speaker 1: of this. UM. You know, it'd be a real disappointment
Speaker 1: if we have a setback, and I'm really hopeful that
Speaker 1: if we do all the right things as a company,
Speaker 1: as a community, we can avoid that setback. Do you
Speaker 1: think we'll get one? You know, you know, honestly, I
Speaker 1: I really hope people do the right things going forward
Speaker 1: so that we don't you know, uh, I think the
Speaker 1: big recommendations out there, you know, go get flu shots,
Speaker 1: were your masks, practice social distance, avoid big crowds, and
Speaker 1: that's our best bed to avoid a real you know,
Speaker 1: your flare up. But you know, cold and flu season.
Speaker 1: More people are probably not going to feel great, and
Speaker 1: it's important people get tested. They understand whether they have
Speaker 1: COVID or just a common cold or flu, and then
Speaker 1: they need to do the right things to protect themselves,
Speaker 1: their family, their friends, and their communities. And I think
Speaker 1: if people just take that simple approach, UM, I think
Speaker 1: you know, we'll get past this a lot faster than
Speaker 1: not taking those safety precautions. You know, it's interesting, Brian,
Speaker 1: you say doing the right thing too. We were talking
Speaker 1: with UM a doctor earlier, and I think a lot
Speaker 1: of folks are talking about a vaccine. When we finally
Speaker 1: get one, UM, there are now concerned that people won't
Speaker 1: take the vaccine. Would you require your employees, your staff
Speaker 1: to take a vaccine in order to work. No, you know,
Speaker 1: we would not require people to take the vaccine. UM. Obviously,
Speaker 1: I would want to do everything I can to make
Speaker 1: sure that they have access to the vaccine, especially those
Speaker 1: that are in those high risk groups. But I think
Speaker 1: you know, your health and wellness is ultimately your personal decision. UM.
Speaker 1: Whatever your decision is, though, if you aren't feeling healthy, UM,
Speaker 1: and you happen to have COVID, we do need you to,
Speaker 1: you know, take those precautions to not get other people infected.
Speaker 1: But I'm focused on trying to stay in touch with people,
Speaker 1: so I understand when vaccines get approved, how they will
Speaker 1: be distributed, and how I best get our employees access
Speaker 1: to those vaccines. UM. But you know, at the end
Speaker 1: of the day, they need to make that decision for themselves. Well,
Speaker 1: and I do wonder too, you know, I think that's
Speaker 1: really interesting to hear. And I feel like Chippoli has
Speaker 1: been throughout its history a company that thinks a lot
Speaker 1: about its employee base. So how do you keep you know,
Speaker 1: your employees safe, motivate motivated during these trying times? And
Speaker 1: we talk about, you know, corporate culture. When you've got
Speaker 1: people at home and people all over the place, how
Speaker 1: do you keep though your workers who have to be
Speaker 1: at work in order to get the job done, how
Speaker 1: do you keep them motivated during these trying times? And
Speaker 1: I'm curious if you've made any employee policy changes during
Speaker 1: the pandemic. Yeah, Look, Carol, I think it's fortunately for us.
Speaker 1: We we've always been focused on our purpose, which is
Speaker 1: around this idea of cultivating a better world through food
Speaker 1: with integrity. And we've got some clear cultural values, um,
Speaker 1: you know around basically authenticity lives here, the movement is real,
Speaker 1: um you know, teach and taste Chipotle, and then the
Speaker 1: line is the moment of truth. And the reason why
Speaker 1: these values are really important is we've used them to
Speaker 1: guide a lot of our decisions. We believe our purpose
Speaker 1: and our values drive our culture. It's why people love
Speaker 1: to work at Chipotle. And we've been consistent, i think
Speaker 1: in all our decision making against our purpose and our values,
Speaker 1: and I think it's given a lot of our employees
Speaker 1: a sense of pride. Um. They love the fact that,
Speaker 1: you know, regardless of how hard um the decision is,
Speaker 1: we want to do the right thing for our communities,
Speaker 1: moving our purpose board and obviously our employees. So you know,
Speaker 1: we were fortunate we already had a lot of things
Speaker 1: in practice from a wellness standpoint, and you know, paid
Speaker 1: sick leave and uh, a lot of employee programs around healthcare,
Speaker 1: mental wellness. Um, you know, I'm sorry, mental health benefits
Speaker 1: that were available for not just the employee but their families.
Speaker 1: So we're trying to surround people with all the right
Speaker 1: things and those have been even more important in these
Speaker 1: challenging times. And you know, we've dialed up our communication.
Speaker 1: I'll tell you the other thing that has really been
Speaker 1: powerful is um, we have really worked hard to communicate
Speaker 1: with every single employee atripally, all ninety plus thousand of them. Um.
Speaker 1: You know, we're doing zooms and web calls and telephone calls.
Speaker 1: I just want to keep them up to date with
Speaker 1: the most um, you know, up to date information, and
Speaker 1: the more they know, the more they can feel confident
Speaker 1: that we're making the right decisions and they're working in
Speaker 1: a safe environment. Um. I've had the pleasure of making
Speaker 1: some day trips visiting restaurants, and I can tell you
Speaker 1: it really gets you pumped up because our employees are
Speaker 1: so grateful, um to be working and to be a
Speaker 1: part of Chipotle and making a difference in their communities
Speaker 1: and moving our company and culture forward. Well, and I'm
Speaker 1: guessing you're visiting a lot more workers because you guys
Speaker 1: have been on a significant hiring push back into lie
Speaker 1: You talked about hiring about ten thousand workers. So how
Speaker 1: has that push gone so far? Where are you in
Speaker 1: that process? Yeah, it's been you know, we're very fortunate.
Speaker 1: People have been really excited to join Chipotle, and the
Speaker 1: applications have been, uh, you know, frankly, really exciting to
Speaker 1: see did you get something like seven hundred thousand? Didn't
Speaker 1: you get something like seven hundred thousand applications or something?
Speaker 1: It was crazy, you know, I don't remember what the numbers,
Speaker 1: but I wouldn't be surprised if that's close to right. Um,
Speaker 1: you know, because we have had you know, I saw
Speaker 1: we just had a job for one of our digital
Speaker 1: opportunities open up, and for just this one position, we
Speaker 1: had well over you know, I think three or four
Speaker 1: hundred applications, which is really amazing. UM. And you know,
Speaker 1: now you've times that out across ten thousand opportunities from
Speaker 1: you know, crew members all the way up to jobs
Speaker 1: that are support centers. And we've been very fortunate to
Speaker 1: attract really great people and we've been able to retain
Speaker 1: really great people. So we're we're feeling really fortunate with
Speaker 1: where we are with the people we have and the
Speaker 1: people that are drawn to to work at you pole
Speaker 1: and apply and one of you part of what we're doing.
Speaker 1: Are you seeing any tightness in the labor market? And
Speaker 1: I'm curious if you anticipate needing even more workers, uh,
Speaker 1: and if that's going to potentially you know, if there's
Speaker 1: tightness of the workforce alsolately to kind of higher wages here. Yeah. No,
Speaker 1: you know, we're not seeing, um an issue with applicant flow.
Speaker 1: You know, we're continue to see great access to great
Speaker 1: talent um and you know, I think one of the
Speaker 1: things why people are really drawn to folly is we
Speaker 1: have a tremendous growth story. Uh So it's always fun
Speaker 1: to be a part of a company that when you
Speaker 1: think about I'm joining today and this company, could you know,
Speaker 1: triple in revenue over the next decade, you know, double
Speaker 1: store count, you know, go from twenty hundred restaurants to
Speaker 1: five six thousand restaurants. Um. You know, they're really excited
Speaker 1: about all the growth right our our thing about our
Speaker 1: digital business. We we went from you know, a couple
Speaker 1: hundred million dollars to this year will be about probably
Speaker 1: two point four billion dollars worth of digital business. And
Speaker 1: people love to be a part of companies that have growth.
Speaker 1: And then what really attracts them here is they feel
Speaker 1: like it's very much aligned with their personal values. So
Speaker 1: they love the growth, they love the values, and they're
Speaker 1: excited to be a part of what our future is.
Speaker 1: And uh, you know, I keep telling our team, let's
Speaker 1: just make sure we're hiring the best possible people, but
Speaker 1: let's also make sure we're hiring the best possible people
Speaker 1: that really believe in our purpose and our values. And
Speaker 1: that's where I think we really strike gold. Brian, why
Speaker 1: do you think Chipotle has been so success a boosting
Speaker 1: sales in its digital delivery and delivery business. You guys
Speaker 1: have just done really well. As you talked about some
Speaker 1: of the numbers and some of the growth, it's pretty impressive.
Speaker 1: Why do you think it's worked so well? You know,
Speaker 1: I think we have been very focused on keeping the
Speaker 1: digital execution really simple and mirroring the same experience you
Speaker 1: get when you come into our restaurants. So you know,
Speaker 1: we've tried very hard to give you a digital experience
Speaker 1: that frankly is almost identical too as if you were
Speaker 1: in our restaurant moving down the line picking out, you know,
Speaker 1: how you want to make your bowl or burrito, And
Speaker 1: you know, we've stayed very committed to keeping it simple.
Speaker 1: You know, over and over again what I hear people
Speaker 1: say is, wow, I love your rapp It's so easy
Speaker 1: to use, and then it's so easy to actually get
Speaker 1: the food when it's time to pick it up. So um,
Speaker 1: you know, just the aspect of keeping it very simple,
Speaker 1: really convenient. And then you know, this has always been
Speaker 1: at the corruptible. They were really fast and were tremendous value.
Speaker 1: So we just give people another access mode to get
Speaker 1: great culinary, great ingredients done exactly how they want it,
Speaker 1: and uh, you know, at a tremendous value. So it's
Speaker 1: it's working out really well because if you want to
Speaker 1: order ahead, grab it and go. If you need it delivered,
Speaker 1: we can deliver it. If you want to run in,
Speaker 1: move down the line and have that eye to eye,
Speaker 1: you know, contact, so you can get the brito exactly
Speaker 1: the way you want it. Um, we have all these
Speaker 1: avenues available for you, and but at the core of
Speaker 1: it is great ingredients, great culinary and then you end
Speaker 1: up with just delicious burritos and bowls. So you know,
Speaker 1: at the end of the day, we are still a
Speaker 1: restaurant company that is committed to changing food culture. Hey, bron,
Speaker 1: you know back in March you did say to me
Speaker 1: that you thought digital could be about of your business
Speaker 1: and be a multibillion dollar business over the next three
Speaker 1: to five years. That still feel about real and likely
Speaker 1: or even more perhaps Well, well, yeah, you know, and
Speaker 1: you know, unfortunately, Carol, that was before it became eighty
Speaker 1: percent of our business um for a time. But you
Speaker 1: know you probably saw on our most recent earnings report
Speaker 1: we're in that forty to fifty range and uh, you know,
Speaker 1: obviously that will continue to fluctuate as the dining rooms reopen,
Speaker 1: But I definitely think our digital business is going to
Speaker 1: stay around as our dining room business comes back, So
Speaker 1: it'll stay among that level you think. I think there's
Speaker 1: a real possibility that's where it could stick. Yeah, So listen.
Speaker 1: One thing I got to ask you, Brian is and
Speaker 1: I know, um all the CEO as we talked to,
Speaker 1: they don't have a ton of visibility at this point. So, UM,
Speaker 1: I do wonder what metrics do you look at? Is
Speaker 1: it consumer data points? Is it you know, the app,
Speaker 1: the digital what are you looking at to get an
Speaker 1: idea of how healthy the consumer is? Um? And maybe
Speaker 1: what the rest of looks like at this point. Yeah,
Speaker 1: you're exactly right, Carol. There's a lot of uncertainty. I'm
Speaker 1: sure if you talk to a lot of my peers
Speaker 1: that we could rattle off the list of all the
Speaker 1: uncertainties in front of us. What we've decided to really
Speaker 1: stay folks based on, is okay, what can What are
Speaker 1: the things we can control, and the things we can
Speaker 1: control is making sure that we have a really safe
Speaker 1: environment for employees to work in, a safe environment that
Speaker 1: our customers believe in and trust. UM. We know, if
Speaker 1: we do those two things, uh, we continue to get
Speaker 1: people's trust and then ultimately their business around their meal occasions.
Speaker 1: And so we continue to really monitor how we as
Speaker 1: a brand are doing on the things that we can control.
Speaker 1: You know, are we doing a good job of communicating
Speaker 1: the safety, Are we're doing a good job of communicating
Speaker 1: why you can feel great about these ingredients, why you
Speaker 1: can feel great about getting that greed over bowl from Chipotle? UM?
Speaker 1: And then obviously we're paying attention to a lot of
Speaker 1: the macros to understand the health of the consumer. UM.
Speaker 1: And you know, obviously, depending on where you are in
Speaker 1: the country, we're seeing a lot of different things. But
Speaker 1: you know, for the most part, customers and consumers are
Speaker 1: still wanting to order food out, whether um that's from
Speaker 1: you know, uh, their local restaurant or somebody like a Chipotle. UM.
Speaker 1: You know, we're definitely seeing them fatigue a little bit
Speaker 1: on going to the grocery store, moating up and cooking
Speaker 1: all the time. Brian, I feel like there's always something
Speaker 1: getting in our way, whether it's the virus or it's
Speaker 1: the president, and I do unfortunately have to um leave
Speaker 1: it there because we do have to head to Washington
Speaker 1: to listen to the President. I do appreciate that your
Speaker 1: time as always, and hopefully we can catch up soon.
Speaker 1: Brian Nichol, here's the CEO of Chipotle.