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Episode Seven: Man And Machine
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Chipotle Mexican Grill is hoping to bring diners back to its restaurants by giving them a way to win one of its most popular items: guacamole.
Chipotle's sales began plummeting last fall following a series of illness outbreaks. The chain has started to win back some customers with giveaways such as a free burrito, though sales and visits to its restaurant are still deep in negative territory. Last week, Chipotle said sales at longstanding locations were down about 22% in the first week of March. That sounds pretty bleak, but to the company it is a promising sign compared with the declines of 40% it was seeing in mid-January, before the CDC completed its investigation.
Chipotle is continuing a heavy dose of marketing and promotion activity as it tries to reassure patrons that it is safe to eat at Chipotle. It also wants to prove the taste of its food has not suffered in the wake of implementing safety procedures, which now include dicing and testing tomatoes at central commissaries and blanching lemons, limes, jalapenos, onions, and avocados.
The company's first big marketing and promotional push came with its Feb. 8 rain check offer when the restaurants were closed for a company-wide meeting. That offer had a much higher redemption rate than planned, with 5.3 million requesting the offer and a 67% redemption rate, while Chipotle had expected about 2.5 million people to seek it out, Mark Crumpacker, chief creative and development officer, said at a Bank of America Merrill Lynch conference on March 16.
Now, Chipotle is offering fans a chance to score free chips and guacamole. To win, customers need to play an online "Guac Hunter" game in which one is supposed to quickly spot several differences between very similar pictures. Chipotle took the lead on the game, incorporating assets and facts provided by industry marketer Avocados From Mexico.
In between the rounds, which can be harder than they sound, the site offers some education about avocados. Chipotle hopes the game will appeal to those who have enjoyed its guacamole in the past, and maybe even entice those who haven't tried it to do so, Mr. Crumpacker said in a statement.
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Those who play the game, even if they don't win, can share their contact information to get a text good for a free order of chips and guacamole at any Chipotle restaurant in the United States or Canada. The game was launched Monday and is set to run through March 31, and offers need to be redeemed by April 10.
The limited redemption window could lead to a larger number of people visiting the restaurants in the next couple of weeks. Even if they only visit for the free food, just having people in line at Chipotle may help. Chief Financial Officer John Hartung last week noted "it was kind of eerie" when there were no long lines of people waiting to order when Chipotle's food safety issues were front and center.
Chipotle has changed some of its food handling processes in the wake of the outbreaks, which included E.Coli issues and norovirus. Still, it continues to feel the fallout from illness-related news. In the second week of March, comparable sales were down about 27% after news spread of a Massachusetts restaurant that closed out of caution when four employees were sick.
At last week's conference, the company said its studies show a vast majority of people plan to come back to the restaurant, though a small percentage of people, around 5% to 7%, said they are not coming back.
Of course, a guacamole giveaway game is not the only thing it is doing to get diners back. Chipotle's other plans include sending 21 million pieces of direct mail, with food offers that run through May 15, depending on when they are sent. It also has billboards up in major markets such as Chicago, full-page print advertisements and its upcoming Cultivate festivals.
Chipotle said it served more than 43 million pounds of avocados from Mexico in 2015. It also gets avocados from California, Chile and Peru, depending on growing seasons. The company said its guacamole is made with avocados, diced red onions, jalapeno peppers, cilantro, citrus juice and salt, and it shares its recipe online. Each restaurant is said to go through about five cases of avocados a day.
For Avocados From Mexico, the partnership is another way to remind consumers about its avocados. The game site includes facts about avocados from Avocados From Mexico, such as Mexican avocados grow among more than 100 volcanoes.
Earlier this year, the industry group ran its second consecutive Super Bowl commercial.
Chipotle said the concept for the game came from the company itself. Sequence was in charge of building and hosting the game, while Vibes is managing mobile aspects such as offer delivery.