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Chipotle and Social Responsibility

By J. Robert Brown

When does social responsibility and profit maximization converge?  At Chipotle, the burrito manufacturer headquartered in Denver.  The first Chipotle opened 15 years ago.  Since then, the chain has grown to 778 stores with sales of $1.1 billion.  With Bennigans in bankruptcy and others skirting financial disaster, Chipotle stands out as a raging success. 

Why? 

Needless to say they make a good product.  But that's not the whole story.  As we have discussed, they emphasize health (using organic ingredients), local produce (striving to buy 25% locally), and animal care (the meat is free range).  In other words, eating a burrito is more than eating a burrito.  Its promoting local farmers and helping to ensure adequate care of animals. 

Now we can add one more.  Anyone who goes to the same store on a regular basis notices that there is incredible stability in the employees who work there.  In my Chipotle (seventh and Colorado in Denver), I am recognized every time I go in.  It adds to the experience without any doubt.  One suspects that Chipotle must treat its workers reasonably well to engender the apparently low lever of worker turmoil.  A recent article in the Rocky Mountain News confirms this.  According to the paper,   

• Many of the store management employees who have stuck with Chipotle since the early days have benefited as well - Chipotle offers a two-month paid sabbatical after 10 years of service, and a company car for all restaurant managers who have been with Chipotle at least four years.
• There's also the potential for a stock option payoff. Chipotle distributed 774,150 shares among salaried employees ahead of its January 2006 IPO, with 456,150 going to nonexecutive employees like store managers, according to filings with the Securities and Exchange Commission. Under terms of the grant, recipients can't exercise their options until early 2009

Treating employees well.  That is another reason why the burritos at Chipotle taste just a little better. 

Full post as published by The Race to the Bottom on August 12, 2008 (boomark / email).