Chipotle is back on the menu at my house because my family loves two things: tacos and cauliflower rice!
Or, that was the first thing that came to mind when I saw the announcement that Chipotle was going to offer cauliflower rice nationwide.
When you read through the stories about the rollout, you actually see that what Chipotle has done is a triumph of marketing strategy and strategy before tactics.
The big thing is that the announcement comes at the end of a period when Chipotle tested the product in about 55 stores in Denver and Wisconsin over the summer to find that offering cauliflower rice opened up Chipotle to new markets and people that were infrequent guests.
This points me towards two quick strategy lessons for all of us:
Market Orientation requires research:
The obvious answer to Keto Twitter and the numbers of different cauliflower rice options at the grocery store would be, “we have to get some cauliflower rice on our menu.”
But the smart market looks at is going on around them, tries to figure out what the market wants, and testing to see if they can actually deliver.
That’s what is on display with the way that Chipotle handled the research of their new cauliflower rice option.
They did research, tested it in a limited market, and rolled it out to their broader market after they knew how their customers reacted.
Research, test, learn, and repeat.
Spin the wheel!
Market Orientation leads to better product launches:
I’ll add at the start that being market oriented usually helps you drive more profit as well, but it is too soon to know how well the new product is going to go from a profit point of view, but the $2 premium is a prime example of how market orientation allows you to generate more revenue because you can trade up the value ladder.
In the case of Chipotle, they’ve moved to the highest reaches of the value ladder because cauliflower rice can appeal to the emotional nature of someone’s buying decision in many ways like:
- Cauliflower rice has less carbs so its healthier.
- I’m excited to have more veggie options.
- It tastes great and I can get my kids to eat it.
I can go on and on here and some of the examples might be completely BS, but it doesn’t matter what I think or you think for that matter…what matters is that this is the way that customers feel and pushing folks up the value ladder allows you to destroy price sensitivity and generate more profits and revenues.
I’ll be curious to see the impact that introducing cauliflower rice to the menu will have for Chipotle, but the initial reading of the situation would point me towards the likelihood that Chipotle may have a hit on its hands.
Now forgive me while I head over to get myself some Barbacoa on a bed of cauliflower rice!