Chipotle's Tofu Turning Point

Welcome to the fast-food big leagues, tofu. Chipotle Mexican Grill (NYSE: CMG  ) this week introduced Sofritas to its stores in Boston and New York. That rollout brings the total number of locations that offer the soy-based ingredient to more than half of its 1,600 restaurants -- a quick climb for a protein that was selling at just seven spots a year ago.

Source: Chipotle Mexican Grill.

When Chipotle first tested Sofritas in San Francisco last year, co-CEO Steve Ells hinted at its potential for a much bigger audience. The braised tofu stuffing was "conceived with vegetarians and vegans in mind," he said at the time, "but it's so delicious that we believe it will have broad appeal on taste alone."

Ells was right: The ingredient is already responsible for 3% of Chipotle's sales. And the company says that almost half of the customers ordering it aren't vegetarians -- they're meat eaters looking for something besides the traditional chicken, pork, and beef options that currently dominate fast-food menus.

Here are a few interesting facts that you might not know about Chipotle's new taco and burrito stuffing:

  • It's rare. Sofritas is the company's first menu addition since introducing salads in 2005. While fast-food giants often rely on new and limited-time products to boost traffic, Chipotle hardly makes any food changes, focusing instead on consistency and throughput.
  • It's Asian. Sofritas was inspired by a tofu offering at Chipotle's sister chain, ShopHouse, its new fast-casual Asian kitchen concept.
  • It's in short supply. The biggest reason it hasn't yet been rolled out to all of Chipotle's locations isn't demand -- it's supply: Chipotle gets all of its tofu from a single organic producer in Oakland, Calif. That soy beanery has no doubt had to adjust to spiking production volumes as the ingredient was introduced at hundreds of restaurants last year.

Chipotle is selling Sofritas at about 800 locations nationwide, on its way to all 1,600 restaurants eventually. Sure, that's tiny compared to McDonald's 14,000-store footprint. However, I wouldn't be so quick to dismiss tofu as a niche protein that can't challenge the McNuggets of the industry. 

Keep in mind that Chipotle's restaurant base grew by 11% last year and the company logged a scorching 6% bounce in comparable-store sales, or comps. At the same time, McDonald's suffered its first drop in comps in a decade while adding less than 1% to its store base. No, Sofritas isn't the next Big Mac. But it's a key part of a fast-growing chain, and will likely introduce tofu into many more Americans' diets over the coming years.

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