Posted 11 December 2012 - 10:47 AM
Great episode guys, as usual. Keep it up.
One small point.
Chipotle is not McDonalds. McDonalds was the majority investor in Chipotle from 1998 until the company went public in 2006. After Chipotle's initial public offering in 2006, McDonalds fully divested from Chipotle, selling its shares for $1.5 billion.
People often point to this as a sign of Chipotle's hypocrisy or their true identity as a corporate puppet that trades environmental causes. But, actually, its previous relationship with McDonalds was a positive thing.
Steve Ells, the CEO and founder, adamantly insists on the company's commitment to local, organic, sustainably produced, and humanely raised foods. It's a real thing, and it definitely increases Chipotle's food costs, trimming the already tight profit margins on a $7 burrito. They can't realistically provide 100% organic all the time, but what they can provide within the limits of market forces is pretty impressive.
To tie it all up, Chipotle can do this because they learned supply chain management and gained considerable supplier connections from McDonalds. Chipotle learned from the best, albeit somewhat evil, restaurant company and used its forces for good.
By the way, I don't work for Chipotle or anything. I just researched them for a finance paper last year.