Chipotle (NYSE:CMG) has struggled at recreating its success with other fast-casual concepts.
It seems like dozens of companies have been trying to create the Chipotle of whatever niche they operate in. There are countless made-to-order pizza companies that use a Chipotle-like assembly line where consumers instruct store personnel about how to build their order. In addition, there are salad chains, Asian eateries, and purveyors of pretty much any type of food you can imagine, all trying to duplicate the Mexican chain's model.
Chipotle itself has failed to successfully expand its range beyond its core brand, having abandoned its ShopHouse Asian concept. The company does still own the small Pizzeria Locale chain (a concept it did not create), and Tasty Made, a potential burger chain that so far has one location. And while the pizza concept has its own problems in a market saturated with made-to-order pizzerias, the hopeful burger chain may face an even tougher road.
What's wrong with Tasty Made?
When Chipotle went national, it elevated fast food Mexican. Consumers used to Yum! Brands (NYSE:YUM) Taco Bell, were given a product that had fresher, more-recognizable ingredients. Yes, the price was higher, but the quality made it still seem like a value.
The problem for Tasty Made, a concept offering higher-quality burgers, fries, and shakes is that so many other chains already do that well. If McDonald's was the only competitor, it might be easy to establish a better burger model. But companies including Five Guys, Shake Shack, BurgerFi, Bobby Flay's Burger Palace, and countless regional chains already own that designation.
To succeed, TastyMade will have to differentiate itself from the competition in the same way its parent company did from Taco Bell. But it hasn't done that, so now, Chipotle is bringing in a celebrity chef in to see if he can elevate the brand.
Who is coming to Tasty Made's rescue?
Chipotle has partnered with chef, restaurateur and James Beard-nominated cookbook author Richard Blais to revamp Tasty Made. The celebrity chef, who won Top-Chef All-Stars, owns his own fast-casual chicken concept, Crack Shack. Chipotle CEO Steve Ells believes Blais has the vision to make the Tasty Made brand something special. He said in a press release:
I have long believed that there was an opportunity to make the fast food burger a great burger using better quality ingredients. Richard's expertise is perfect to help us do that. He can apply his compelling vision and entrepreneurial spirit to our work in progress and oversee operations, allowing me to remain focused on continuing to grow and strengthen the Chipotle brand.
Exactly what Blais will do remains undecided, but nothing is off limits. His initial task will be to "revisit the restaurant with a fresh eye, working to perfect the existing menu and expanding options."
Tasty Made currently has only four items on its menu: burgers, fries, shakes, and sodas. The hamburgers are made from fresh, not frozen beef, while the twice-fried french fries are hand-cut in the restaurant.
Can Tasty Made be saved?
The challenge for Blais is that Tasty Made is trying to do something that has already been done. It has no reason to exist beyond being a burger chain owned by Chipotle. The challenge for the celebrity chef -- and it's an enormous one -- is finding a hook that differentiates the concept.
Fresh beef and high-quality ingredients are no longer clear difference makers in the burger space. That's a tribute to the food revolution Chipotle helped start, but it creates a very difficult, if not impossible, path for Tasty Made.
Daniel B. Kline has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Chipotle Mexican Grill. The Motley Fool is short shares of Shake Shack. The Motley Fool has a disclosure policy.
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