The entire category is undergoing a reinvention — if you believe the breathless business analysts enamored of the niche concepts currently being launched. Here’s an easier, better alternative.
In a recent analysts’ conference for investors, Steve Ells, chairman and co-CEO of Chipotle Mexican Grill, outlined some ideas he proposed as alternatives to “the old model” of the fast-food industry.
Ells, who has been lionized in the business press for years as “the guy who’s rewritten the rules of fast food,” noted — correctly — that traditional fast-food business operations are driven by high volume, low costs and cheap labor. In that scenario, customers demand the lowest possible prices, and they’re willing to sacrifice virtually any other consideration in return — service, quality and consumer choice.
As a result, the franchise operators put all their energies into driving down raw material costs, keeping a lid on wages and battling their competitors to see who can lower their menu prices further.
“The old fast-food model . . . requires cheap ingredients, lots of processed food and lots of mechanization to keep things consistent,” Ells was quoted as saying.
He said he believes consumers are no longer interested in processed foods, limited-time offers and other marketing gimmicks. As a result, Chipotle has pioneered a system that features what the chain touts as “sustainably raised ingredients,” a higher quality menu and the ability to fully customize one’s order. He’s also leading an effort to revamp two fast-food sectors, both of which would benefit from some reinventing, by launching Pizzeria Locale and ShopHouse Southeast Asian Kitchen.
The Pizzeria Locale features made-to-order pizza that can be prepared in only two minutes in customized spiral ovens, while, Southeast Asian Kitchen’s menu offers Asian-style rice bowls that customers can personalize with various fresh, local ingredients and “natural” meats.
Gee, just like Chipotle, only served with rice instead of beans.
The quick fix
Most business analysts consider the Chipotle model to be appropriate only for certain upscale market segments, and thus unsuited for application to the nation’s numerous burger, chicken and pizza chains. Maybe so, but here’s another idea — which doesn’t requires reconstructing the supply chain or reinventing the operational model — that that would improve the service, quality and customer experience at fastfood stores across the country.