Just when I thought management at Chipotle Mexican Grill (CMG 1.07%) couldn't get any smarter with their marketing tactics, the company announced a partnership with Major League Soccer. This latest move highlights Chipotle's direct focus on helping consumers live healthier lifestyles and should allow the company to further strengthen its already formidable reputation as the leading healthy alternative in the fast-casual dining segment.
Chipotle is one of several high-growth companies that continue to benefit from consumers' willingness to live active and healthier lifestyles. In addition to natural grocer Whole Foods Market (WFM) and apparel company Under Armour (UAA 1.03%), Chipotle is a great way to capitalize on this seemingly unstoppable global trend.
Source: Chipotle Website
Burritos and soccer?
Chipotle has become the "official" fast-casual Mexican restaurant of the soccer league and a dozen clubs.
The sponsorship is the largest ever between Chipotle and a single sport, and will feature teams and individual players from around the league.
Mark Crumpacker, chief marketing and development officer at Chipotle, explained: "At the core of our effort to change the way people think about and eat fast food is our commitment to finding better, more sustainable sources for all of the ingredients we use."
But how exactly do burritos tie in with soccer? Crumpacker further explained: "That value is one that is often shared by people with an active lifestyle. This partnership with MLS will allow us to further engage consumers in a sport we have long supported through grassroots efforts."
In addition to hosting the inaugural Chipotle MLS Homegrown Game in August, as an added incentive Chipotle will feature a boy or girl as its Chipotle Youth Homegrown Athlete during 10 home games of each sponsored MLS club.
By focusing on the American market for soccer, Chipotle and MLS will be able to reach millions of youth soccer fans with the combined promotional strategy. One of the main goals is to impress upon the country's youth that living a healthy lifestyle is beneficial as well as fun.
Trending in the right direction
As was mentioned before, there has been a concerted effort by select companies in America to cater directly to health-conscious consumers. Well-managed companies like Chipotle, Whole Foods Market, and Under Armour have benefited tremendously by getting off to a fast and early start in capturing domestic consumers looking to lead more active and healthy lives.
Although each company provides different products and services, the target consumer base that each company reaches is largely the same. Chipotle offers fast-casual dining with a focus on providing high-quality, locally raised ingredients to consumers on the go. Whole Foods Market offers a wide variety of natural and organic foods to consumers looking to stock their fridges with healthy alternatives. Finally, Under Armour outfits many of the people who are looking to stay or become more active in their daily lives with performance-enhancing apparel, footwear, and accessories.
Although quite different businesses, the objectives of all three companies are largely the same: capture more health-conscious consumers and demand a premium for the above-average products/services provided. All three companies have been able to do this in the past and look set to continue doing so in the future. The following is a breakdown of all three companies' projected growth rates going forward:
| Company | Revenue Growth 2014 | EPS Growth 2014 |
|---|---|---|
| Chipotle Mexican Grill | 18% | 23.3% |
| Under Armour | 23.7% | 23.3% |
| Whole Foods Market | 13.9% | 18.5% |
*Whole Foods Market fiscal year ends September
Bottom line
The consumer trend toward living a more active and healthy lifestyle is real and shows no signs of stopping any time soon. Chipotle, Whole Foods Market, and Under Armour have each done well to capitalize on the massive movement thus far and should be able to continue doing so with some of the best and accomplished management teams at their respective helms.
Chipotle's latest partnership with MLS shows just how clever and unique the company's marketing team really is. As the company targets more youth going forward, which should no doubt add to its long-term consumer base in the process, Chipotle and investors should benefit alongside consumers in general.
