Sunday, July 27, 2014

Uh, guys...

Lost in the rural umbrage over Chipotle cartoons and "responsible raising" was any consideration that this concept might have endurance. I think the Meat Establishment consistently assumed a little pushback would not just be tremendously satisfying, but snap Joe Public back to his burger-loving senses.

That could still be proven correct, but the chances of a significant change in consumer consumption at the fast food level are growing right now - not diminishing.
The numbers were startling: Shares of Chipotle Mexican Grill shot up 12 percent on Tuesday after the company reported a nearly 26 percent spurt in its quarterly profit. For the fast-food industry, this was fresh evidence that the world of Big Macs and Doritos Locos Tacos has room for a menu with healthier-than-average food and higher-than-average prices.But it came as no surprise to a new generation of smaller fast-food chains that are coming up fast behind Chipotle and its peers, and taking its “food with integrity” mantra even further.A handful of rapidly growing regional chains around the country — including Tender Greens,LYFE Kitchen, SweetGreen and Native Foods — offer enticements like grass-fed beef, organic produce, sustainable seafood and menus that change with the season. Most promise local ingredients; some are exclusively vegetarian or even vegan. A few impose calorie ceilings, and others adopt service touches like busboys and china plates.And despite the higher costs and prices, all are thriving and planning national expansions, some directed by alumni of fine dining or of fast-food giants like McDonald’s.Their success marks a milestone: After decades of public hand-wringing about the empty calories and environmental impact of fast food, the farm-to-table notions that have revolutionized higher-end American restaurants have finally found a lucrative spot in the takeout line. The result already has a nickname: farm to counter.“This is not a passing fad,” said B. Hudson Riehle, the research director for the National Restaurant Association, who added that locally grown food and sustainability were the top two customer priorities reported this year in the group’s annual poll of American chefs. “It’s only going to get stronger.” [More]

The numbers are still absurdly lopsided, but with traditional fast-food (jeez - who'd have thunk that would be a legitimate label?) struggling to generate sales growth, I think there is a real risk that market for proteins - and consequentially, grains - may move slowly overseas. Fast food's future could be dependent on a rising lower class - not a thriving middle class.

It's tough to say how much of Chipotle's strong sales are a result of its campaign, but many analysts give the practices lots of the credit.
McDonald's doesn't expect full-year international comp sales to be too different from its June performance, and July global comps are expected to be negative.That's in spite of the late-April makeover for the iconic Ronald McDonald clown, who traded in his pear-shaped yellow onesie for a hip vest-and-cargo-pant combo. For special occasions, he wears what the firm calls a whimsical red blazer and bow tie. His floppy red shoes remain.Shares of the Oak Brook, Ill.-based company slid 1.4% in the stock market today.By contrast, Chipotle wolfed down profit in spite of higher menu prices, reporting late Monday a 17.3% jump in Q2 same-store sales. Earnings topped views as revenue growth accelerated for a third straight quarter.The company's antibiotic-free proteins and fresh ingredients have made the chain a fan favorite in the fast-casual world.Making over menu items — instead of mascots — may be the ticket to success with consumers. [More]
The numbers are all the more impressive given the healthy (heh) price increases Chipotle announced earlier this year.

Dietarily, I don't really have a stake in this battle. I eat increasingly less beef, but have been doing so for years. But I travel enough to use fast-food for refueling simply because it's, Come to think of it, that may be the large majority of the attraction.

Nonetheless, I think treating this sales trend with the respect the numbers deserve might not serve us better that echo-chamber outrage-fests. 


Anonymous said...

Let's see Chipotle turn those numbers every year and build a business like McDs. Not fair to compare the two...people will eventually get Chipotle fatigue as well. I personally don't get the draw...never been that impressed with their food. In other words, the kids will move onto something else.
I am, however, very excited about the return to fat in the American diet and the role that will play in combating obesity. We've gotten it all wrong for the last 30 years and the demographics prove it on health and quality of life. This is what will shape animal agriculture over the next decade in my opinion. I'm glad I kept my cows and didn't run to the "easier" life of cropping. Milk, beef, bacon, butter, etc. will be the next big thing in Amercian diets!
You should take time to check out this trend, John.

John Phipps said...


Fair point - one quarter doth not a trend make. And as I noted the size makes comparison difficult. Still, investors note all these things as well, so following their cash has some value.

I checked out your link and NuSi founder Taubes. To me it looks like an Atkins diet promoter meets billionaire funder. I am always suspicious of people striving to prove a particular answer correct, but the effort looks fairly above board.

What killed Atkins was not it didn't work, but people missed carbs and cheated. Maybe NuSi will find an answer for that, but it would take decades, IMHO. And possibly mind control (heh).

I will watch for domestic consumption trends to turn around for proteins, but right now see the market growth overseas.

Thanks for commenting.