3 Reasons to Invest in Chipotle Mexican Grillhttp://www.fool.com/investing/general/2014/02/10/3-reasons-to-invest-in-chipotle-mexican-grill.aspx William Bias
February 10, 2014
Fast-casual Mexican restaurant chain Chipotle Mexican Grill (NYSE: CMG) possesses many qualities that could translate into long-term capital gains. The long-term potential of Chipotle also exceeds that of its competitors Yum! Brands' (NYSE: YUM) Taco Bell and Jack in the Box's (NASDAQ: JACK) Qdoba Mexican Grill. Here's why.
Chipotle wants to make sure that customers get educated in its "do good" philosophy through creative means. In the most recent earnings call, company executives highlighted its "Scarecrow" marketing program, complete with an animated short film and mobile phone games. Chipotle also recently produced four 30-minute episodes of a comedy called Farmed and Dangerous that "explores the world of industrial agriculture in America." Company executives also underscored to analysts its intentions to eliminate GMOs from the menu. Other attempts at customer engagement include Sofritas, a vegan tofu proving popular among vegetarians and meat eaters alike.
Competition doesn't measure up
While both Chipotle and Qdoba exude a fast-casual feel, Taco Bell seeks to cater to the value-conscious fast-food consumer. In addition, Yum! Brands and its franchisees operate nearly 6,000 Taco Bell stores, compared to Chipotle's 1,600 stores, meaning Taco Bell has less room for expansion. Also, in contrast to Chipotle's transparent and sterling supply chain reputation, Yum! Brands' "poultry supply incident" in China KFCs last year probably still haunts the minds of some of its customers, giving them