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Corporate Social Responsibility: Chipotle Mexican Grill, A Case Study
Transcript of Corporate Social Responsibility: Chipotle Mexican Grill, A Case Study
-Health and environment concerns CEO Steve Ells -A chef first. Studied French cuisine in culinary school
-Dreamed about opening his own full scale restaurant
-Idea of Chipotle was born after observing people at local Taquerias
-Borrowed 85k from Dad and opened first Chipotle in Colorado in 1993 Chipotle is second to Panera Bread Company as one of the top fast casual restaurants in its industry with $2.2 billion dollars in 2011 sales. HUGE A success! Why? What's in their burrito? ENGAGEMENT "Food with Dress up in a costume, buy a burrito for $2.
Proceeds, up to $1,000,000 donated to The Chipotle Cultivate Foundation, non-profit organization committed to creating a more sustainable and healthful food supply and to raising awareness concerning food issues. RELATIONSHIPS "Chipotle succeeds not because of the burritos. It works because of our system: fresh, local, sustainable ingredients, cooked with classic methods in an open kitchen where the customer can see everything, and served in a pleasing environment." - Steve Ells, CEO-Chipotle Mexican Grill "People don't buy what you do, they buy why you do it."
- Simon Sinek, Start with Why: How Great Leaders Inspire Everyone to Take Action Successful in communicating their vision and their vision is (leads to value and time conscious consumers) than the product. Integrity" Recently named
"America's Most Inspiring CEO " by Esquire Dressing up in the "scariest costume" with The Food Revolution chef, Jamie Oliver 11.2% growth Chipotle now has over 1,300 restaurants including in London, Toronto, and Paris. *Best-performing restaurant stock in the Standard & Poor's 500 Index. http://money.cnn.com/gallery/news/companies/2012/09/06/fastest-growing-all-stars.fortune/7.html http://www.southernstudies.org/2012/10/chipotle-fair-food-agreement-is-the-latest-win-for-florida-farmworkers.html http://shophousekitchen.com/#/ http://blogs.westword.com/cafesociety/2012/10/chipotle_mexican_grill_got_its.php http://www.fastcompany.com/1671659/chipotle-burritos-stuffed-integrity http://blogs.westword.com/latestword/2012/09/chipotle_steve_ells_most_inspiring_ceo.php http://features.blogs.fortune.cnn.com/2011/09/12/chipotles-growth-machine/ CREDITS www.chipotle.com We have always known that heedless self-interest was bad morals; we know now that it is bad economics.
—Franklin Delano Roosevelt, January 20, 1937 "There is one and only one social responsibility of business–to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud." -Milton Friedman, September 30, 1970 First make money, then do good.
Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success.
Addressing societal concerns can foster innovation and increase productivity.
Creating Shared Value, Harvard Business Review, January 2011 CHICKEN Chipotle is undergoing a 10-year project with Good Shepherd Poultry Range to resurrect heritage breeds of chicken that can survive on pastures.
BLACK AND PINTO BEANS Forty percent of the beans are organically grown and another 5% are grown using conservation tillage methods, which reduce soil erosion.
CHILI-CORN SALSA The company never uses genetically modified corn. Sixty-five percent of American corn is from GM crops.
LETTUCE The lettuce is sourced from local farms during the growing season.
GUACAMOLE All cilantro is organically grown; the goal is for 10% of all avocados to be organic.
CHEESE AND SOUR CREAM All dairy comes from cows that have never been treated with the synthetic hormone rBGH, but only 30% is pasture-raised, due to limited supply. To get to 100%, the chain plans to build its own dairy cooperative.
PORK Every time two Chipotle restaurants open, another farmer whose pigs are naturally raised can join the Niman Ranch network and become a supplier to the chain. Marketing Chipotle gets involved with community events, charities and local farmers & business owners. RESTRUCTURE Chipotle Mexican Grill signed an agreement with the Coalition of Immokalee Workers (CIW) that will improve wages and working conditions for tomato pickers in Florida. The company has agreed to pay an extra penny per pound of tomatoes purchased for its 1,300 restaurants nationwide, with the money appearing as a bonus in workers' paychecks. "Every time you open up two Chipotle restaurants, we add another naturally raised pig farmer into this farmers’ cooperative called Niman Ranch pork company," says Crumpacker. "When we started, there were 50 to 60 of these farmers. Now there are between 600 and 700."
-Mark Crumpacker, CMO of Chipotle Mexican Grill For Exploding All the Rules in Fast Food
Fast Company, 2012 Ranked #34 The World's 50 Most Innovative Companies http://www.fastcompany.com/most-innovative-companies/2012/chipotle http://www.bloomberg.com/news/2012-10-25/chipotle-seen-becoming-mcdonald-s-with-drive-throughs.html http://articles.chicagotribune.com/2012-10-24/news/sns-rt-us-darlings-dudsbre89n1p6-20121024_1_rick-summer-motorola-mobility-chipotle-mexican-grill http://www.nytimes.com/2011/08/14/business/shared-value-gains-in-corporate-responsibility-efforts.html?pagewanted=all "Every time you open up two Chipotle restaurants, we add another naturally raised pig farmer into this farmers’ cooperative called Niman Ranch pork company," says Crumpacker. "When we started, there were 50 to 60 of these farmers. Now there are between 600 and 700." In Chipotle’s version of the food-marketing chain, this focus leaves fewer dollars for aggressive, traditional advertising. Crumpacker, who joined the company three years ago, is tasked with making a complex message appealing. "Saying that we don’t buy dairy from cows that are given the hormone rBGH is not an appetizing message," Ells admits. Crumpacker did cycle through two ad agencies in his first year, as he tried to find effective ways to communicate Chipotle’s "Food With Integrity" message. But when he hosted a series of screenings of the investigative documentary Food, Inc., Crumpacker understood that the only way to differentiate Chipotle was to replace traditional advertising with more emotionally engaging stories. http://hbr.org/2011/01/the-big-idea-creating-shared-value/ar/1 http://www.colorado.edu/studentgroups/libertarians/issues/friedman-soc-resp-business.html Discussion Is CSR hope or hype?
Can you name a couple of companies
who implement CSR as part of their vision?
Are you more likely to be more loyal to a company
who has a strong CSR in their brand?