Chipotle Mexican Grill (CMG) has been living large since McDonald’s seemingly miscalculated divestiture. Since the divestiture, Chipotle expanded from 500 locations to more than 1500. Ronald pocketed $1.5 billion from the deal, but Chipotle is now valued at more than $13 billion — that’s a lot of burritos.
No, but really.
Burrito sales are up 44 percent this year and up 1,316 percent since its initial public offering in 2006. Last year Chipotle served more than 120 million pounds of naturally raised beef, pork and chicken. There is such a high demand for burritos that Chipotle could not meet the demand if it stuck to the company’s “naturally raised beef” policy.
“The supply of naturally raised beef is certainly tight,” Chipotle spokesman Chris Arnold told Bloomberg Businessweek. “So it is definitely a challenge to get everything we need, and right now, we can’t get all that we need.”
As a rational producer, Chipotle finds a way to meet demand. In times of beef-drought, Chipotle uses “traditional” beef — which means that the animals could have been given antibiotics or hormones. However, Chipotle always posts signs when they are using “traditional beef.”