Businessweek Talks- Chipotle CEO Brian Niccol

come back. Tell me a little bit about kind of where we are right now in this world. How do you see the pandemic? Are we on the other side of it yet? Yeah, Carol, good to see you again. And uh yeah, crazy to think we were just a couple of days before everything really came to a grinding halt. Unfortunately, in the pandemic really took off. But I think where we are right now is in a state where I

think everybody understands what they need to be doing. Uh And so as a result, I think people are starting, you know, to demonstrate good behavior so that we all contributing really containing the pandemic. We've been very fortunate in our restaurants where our employees, I think we're doing a lot of the right things. We put a lot of the right food safety practices and wellness practices in place. So that's giving people confidence to you know, basically used

to Polly as a meal solution. And then obviously our digital business is giving people access for that off premise occasion that is become really critical. Yeah, and I want to talk about that because I feel like you are very prescient in terms of the investments you made and when you came in about two and a half years ago.

Focusing on that. Before we get to that, though, I do want to ask you, are you preparing your company your staff for a second round with the virus come the fall and winter months, And I do wonder if you're kind of taking precautions, are setting up um, you know,

just in case. Yeah, Look, I think we definitely have uncertainty in front of us UM and so really the approach we're taking is we're following the recommendations of the c d C and a lot of the local health departments around making sure our employees are wearing masks, we're practicing the social distancing. Uh. You know, no one works

if they're not feeling healthy. UM. And you know, obviously we continue to be in a working, remote environment, so we want to take all the precautions we can to hopefully contain the pandemic and get to the other side of this. UM. You know, it'd be a real disappointment if we have a setback, and I'm really hopeful that if we do all the right things as a company, as a community, we can avoid that setback. Do you

think we'll get one? You know, you know, honestly, I I really hope people do the right things going forward so that we don't you know, uh, I think the big recommendations out there, you know, go get flu shots, were your masks, practice social distance, avoid big crowds, and that's our best bed to avoid a real you know, your flare up. But you know, cold and flu season. More people are probably not going to feel great, and

it's important people get tested. They understand whether they have COVID or just a common cold or flu, and then they need to do the right things to protect themselves, their family, their friends, and their communities. And I think if people just take that simple approach, UM, I think you know, we'll get past this a lot faster than not taking those safety precautions. You know, it's interesting, Brian,

you say doing the right thing too. We were talking with UM a doctor earlier, and I think a lot of folks are talking about a vaccine. When we finally get one, UM, there are now concerned that people won't take the vaccine. Would you require your employees, your staff to take a vaccine in order to work. No, you know, we would not require people to take the vaccine. UM. Obviously, I would want to do everything I can to make sure that they have access to the vaccine, especially those

that are in those high risk groups. But I think you know, your health and wellness is ultimately your personal decision. UM. Whatever your decision is, though, if you aren't feeling healthy, UM, and you happen to have COVID, we do need you to, you know, take those precautions to not get other people infected. But I'm focused on trying to stay in touch with people, so I understand when vaccines get approved, how they will be distributed, and how I best get our employees access

to those vaccines. UM. But you know, at the end of the day, they need to make that decision for themselves. Well, and I do wonder too, you know, I think that's really interesting to hear. And I feel like Chippoli has been throughout its history a company that thinks a lot about its employee base. So how do you keep you know, your employees safe, motivate motivated during these trying times? And

we talk about, you know, corporate culture. When you've got people at home and people all over the place, how do you keep though your workers who have to be at work in order to get the job done, how do you keep them motivated during these trying times? And I'm curious if you've made any employee policy changes during the pandemic. Yeah, Look, Carol, I think it's fortunately for us. We we've always been focused on our purpose, which is around this idea of cultivating a better world through food

with integrity. And we've got some clear cultural values, um, you know around basically authenticity lives here, the movement is real, um you know, teach and taste Chipotle, and then the line is the moment of truth. And the reason why these values are really important is we've used them to guide a lot of our decisions. We believe our purpose and our values drive our culture. It's why people love

to work at Chipotle. And we've been consistent, i think in all our decision making against our purpose and our values, and I think it's given a lot of our employees a sense of pride. Um. They love the fact that, you know, regardless of how hard um the decision is, we want to do the right thing for our communities,

moving our purpose board and obviously our employees. So you know, we were fortunate we already had a lot of things in practice from a wellness standpoint, and you know, paid sick leave and uh, a lot of employee programs around healthcare, mental wellness. Um, you know, I'm sorry, mental health benefits that were available for not just the employee but their families. So we're trying to surround people with all the right things and those have been even more important in these

challenging times. And you know, we've dialed up our communication. I'll tell you the other thing that has really been powerful is um, we have really worked hard to communicate with every single employee atripally, all ninety plus thousand of them. Um. You know, we're doing zooms and web calls and telephone calls.

I just want to keep them up to date with the most um, you know, up to date information, and the more they know, the more they can feel confident that we're making the right decisions and they're working in a safe environment. Um. I've had the pleasure of making some day trips visiting restaurants, and I can tell you it really gets you pumped up because our employees are so grateful, um to be working and to be a part of Chipotle and making a difference in their communities

and moving our company and culture forward. Well, and I'm guessing you're visiting a lot more workers because you guys have been on a significant hiring push back into lie You talked about hiring about ten thousand workers. So how has that push gone so far? Where are you in that process? Yeah, it's been you know, we're very fortunate. People have been really excited to join Chipotle, and the applications have been, uh, you know, frankly, really exciting to

see did you get something like seven hundred thousand? Didn't you get something like seven hundred thousand applications or something? It was crazy, you know, I don't remember what the numbers, but I wouldn't be surprised if that's close to right. Um, you know, because we have had you know, I saw we just had a job for one of our digital opportunities open up, and for just this one position, we had well over you know, I think three or four

hundred applications, which is really amazing. UM. And you know, now you've times that out across ten thousand opportunities from you know, crew members all the way up to jobs that are support centers. And we've been very fortunate to attract really great people and we've been able to retain really great people. So we're we're feeling really fortunate with where we are with the people we have and the people that are drawn to to work at you pole and apply and one of you part of what we're doing.

Are you seeing any tightness in the labor market? And I'm curious if you anticipate needing even more workers, uh, and if that's going to potentially you know, if there's tightness of the workforce alsolately to kind of higher wages here. Yeah. No, you know, we're not seeing, um an issue with applicant flow. You know, we're continue to see great access to great talent um and you know, I think one of the things why people are really drawn to folly is we

have a tremendous growth story. Uh So it's always fun to be a part of a company that when you think about I'm joining today and this company, could you know, triple in revenue over the next decade, you know, double store count, you know, go from twenty hundred restaurants to five six thousand restaurants. Um. You know, they're really excited about all the growth right our our thing about our

digital business. We we went from you know, a couple hundred million dollars to this year will be about probably two point four billion dollars worth of digital business. And people love to be a part of companies that have growth. And then what really attracts them here is they feel like it's very much aligned with their personal values. So they love the growth, they love the values, and they're excited to be a part of what our future is.

And uh, you know, I keep telling our team, let's just make sure we're hiring the best possible people, but let's also make sure we're hiring the best possible people that really believe in our purpose and our values. And that's where I think we really strike gold. Brian, why do you think Chipotle has been so success a boosting sales in its digital delivery and delivery business. You guys

have just done really well. As you talked about some of the numbers and some of the growth, it's pretty impressive. Why do you think it's worked so well? You know, I think we have been very focused on keeping the digital execution really simple and mirroring the same experience you

get when you come into our restaurants. So you know, we've tried very hard to give you a digital experience that frankly is almost identical too as if you were in our restaurant moving down the line picking out, you know, how you want to make your bowl or burrito, And you know, we've stayed very committed to keeping it simple. You know, over and over again what I hear people say is, wow, I love your rapp It's so easy to use, and then it's so easy to actually get

the food when it's time to pick it up. So um, you know, just the aspect of keeping it very simple, really convenient. And then you know, this has always been at the corruptible. They were really fast and were tremendous value. So we just give people another access mode to get great culinary, great ingredients done exactly how they want it, and uh, you know, at a tremendous value. So it's it's working out really well because if you want to order ahead, grab it and go. If you need it delivered,

we can deliver it. If you want to run in, move down the line and have that eye to eye, you know, contact, so you can get the brito exactly the way you want it. Um, we have all these avenues available for you, and but at the core of it is great ingredients, great culinary and then you end up with just delicious burritos and bowls. So you know, at the end of the day, we are still a

restaurant company that is committed to changing food culture. Hey, bron, you know back in March you did say to me that you thought digital could be about of your business and be a multibillion dollar business over the next three to five years. That still feel about real and likely or even more perhaps Well, well, yeah, you know, and you know, unfortunately, Carol, that was before it became eighty

percent of our business um for a time. But you know you probably saw on our most recent earnings report we're in that forty to fifty range and uh, you know, obviously that will continue to fluctuate as the dining rooms reopen, But I definitely think our digital business is going to stay around as our dining room business comes back, So it'll stay among that level you think. I think there's a real possibility that's where it could stick. Yeah, So listen.

One thing I got to ask you, Brian is and I know, um all the CEO as we talked to, they don't have a ton of visibility at this point. So, UM, I do wonder what metrics do you look at? Is it consumer data points? Is it you know, the app, the digital what are you looking at to get an idea of how healthy the consumer is? Um? And maybe what the rest of looks like at this point. Yeah,

you're exactly right, Carol. There's a lot of uncertainty. I'm sure if you talk to a lot of my peers that we could rattle off the list of all the uncertainties in front of us. What we've decided to really stay folks based on, is okay, what can What are the things we can control, and the things we can control is making sure that we have a really safe environment for employees to work in, a safe environment that

our customers believe in and trust. UM. We know, if we do those two things, uh, we continue to get people's trust and then ultimately their business around their meal occasions. And so we continue to really monitor how we as a brand are doing on the things that we can control. You know, are we doing a good job of communicating the safety, Are we're doing a good job of communicating why you can feel great about these ingredients, why you

can feel great about getting that greed over bowl from Chipotle? UM? And then obviously we're paying attention to a lot of the macros to understand the health of the consumer. UM. And you know, obviously, depending on where you are in the country, we're seeing a lot of different things. But you know, for the most part, customers and consumers are still wanting to order food out, whether um that's from

you know, uh, their local restaurant or somebody like a Chipotle. UM. You know, we're definitely seeing them fatigue a little bit on going to the grocery store, moating up and cooking all the time. Brian, I feel like there's always something getting in our way, whether it's the virus or it's the president, and I do unfortunately have to um leave it there because we do have to head to Washington

to listen to the President. I do appreciate that your time as always, and hopefully we can catch up soon. Brian Nichol, here's the CEO of Chipotle.