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Could Chipotle Make a Vegetarian Out of You?

Vegetarian "Sofritas" burrito. Image source: Chipotle.

Americans are warming up to Chipotle Mexican Grill's (NYSE: CMG  ) newest meat-free menu option. The burrito chain said this week that its Sofritas tofu ingredient has been a solid performer at the few restaurants where it now sits alongside the traditional choices of chicken, steak, and pork.

Those test locations already cover 25% of Chipotle's store base, mainly in the West Coast and the Midwest. But Chipotle plans to push the item eastward, introducing it to Chicago, Baltimore, Philadelphia, Richmond, and Washington, D.C., next week. The company is encouraged by the fact that sales of the tofu have quickly reached a respectable 4% of revenue at its test locations.

That's not the only vegetarian-friendly move Chipotle announced this week. It also removed the bacon from its pinto beans nationally, saying that the change didn't meaningfully impact the flavor but will boost the appeal of the beans to vegans and vegetarians.

It might be tempting to dismiss the meatless changes as insignificant. After all, Chipotle will still get almost all of its revenue from meat-filled menu options.

But this rollout will introduce tofu to perhaps millions of mainstream diners who might never have tried it otherwise. In fact, by Chipotle's own estimates, about half of the people ordering Sofritas at its test locations aren't vegetarians or vegans, but simply chose it as a substitute for their usual meaty choices.

And remember that Chipotle is quickly becoming an influential force in the fast-food business. The company operates more than 1,500 restaurants and is growing like a weed, having opened 37 new locations last quarter alone. Sales at its existing stores grew faster than the overall industry, spiking higher by 6.2%. That boost dwarfed the 1% improvement that McDonald's (NYSE: MCD  ) saw in its last quarter.

There's no denying the strength of meat in the fast-food industry. McDonald's beef-stacked Big Mac brand, for example, celebrates its 45th birthday this year. And the fast-food king doesn't see demand for meat softening anytime soon. It even counts chicken and beef as two of its four "key growth categories" these days. Still, Chipotle is mixing the traditional fast-food choices up, and could eventually elevate another protein into a top spot in the American diet.

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Related Tickers

9/26/2016 4:02 PM
CMG $419.88 Up +6.07 +1.47%
Chipotle Mexican G… CAPS Rating: ****
MCD $116.53 Down -0.64 -0.55%
McDonald's CAPS Rating: ***