Just as when Chipotle Mexican Grill (NYSE:CMG) invested in fast-casual pizza chain Pizzeria Locale to blunt all the new shops opening that were claiming to be the "Chipotle of pizza," the Mexican food joint is going after its rivals who are rushing to eliminate artificial ingredients from their menu.
"Food with Integrity" has always been what's separated Chipotle from the competition. By internalizing its commitment to providing fresh, wholesome ingredients, the fast-casual chain raised the bar for its rivals to implement their own food quality improvement programs.
A smorgasbord of fresh food
McDonald's (NYSE:MCD), for example, introduced fresher, more unique ingredients while allowing for greater order customization. Yum! Brands' (NYSE:YUM) Pizza Hut plans to completely remove all artificial flavors and coloring from all of its pizzas by the end of July, while its Taco Bell chain will be doing the same, affecting 95% of its primary food items.
Subway is taking artificial colors, flavors, and preservatives out of its sandwiches over the next 18 months, and just last month, cereal maker General Mills (NYSE:GIS) said it was eliminating artificial colors and flavors from artificial sources from all of its cereals, meaning the change will roughly effect 40% of its cereals over the next two to three years. It's also opted to demand its suppliers treat the animals they sell it more humanely.
But Chipotle sees them as pretenders to the throne which, just like the pizzerias, are paying lip service to what it considers to be one of its core values. In response to these companies that it charges are just going through the motions, the Mexican restaurant is launching a new game for consumers to stack up these restaurants' ingredients against its own.
Stacking the odds in its favor
Called "Friend or Faux," the game challenges customers to investigate whether a restaurant is truly committed to giving them wholesome, natural ingredients, or, as Chipotle suggests is truly the case, they are just jumping on the bandwagon.
The fast-casual chain says that while many companies have announced intentions to remove artificial ingredients, flavors, and colors from their foods, it actually covers "only a portion of the thousands of additives used in processed foods."
Beginning on July 21, you'll be able to go to the Friend or Faux website and find out just how many fake ingredients remain in the processed foods you're buying. To play, customers choose one item from Chipotle's menu and one from a rival fast-food chain's menu after which they are shown a list of 20 ingredients. The customer then has to guess which menu item contains each ingredient, whether you'll find it in Chipotle's food, the fast-food chain's food, or in both.
Players are also able to win prizes. Just by entering you get a sweepstakes entry plus a buy-one-get-one free coupon for up to $10 at Chipotle. Other prizes include a Chipotle-catered party for 20 and the grand prize being 52 free dinner-for-two cards valued at $25 each.
The purpose, of course, is to highlight the quality of Chipotle's own food. It says there are just 68 additives across all of its menu, and if you exclude tortillas, there are just 46. This past April, the fast-casual chain also said all 1,800 restaurants would no longer serve food that contained genetically engineered ingredients.
It wasn't easy finding commodities that hadn't been genetically modified, particularly for its tortillas. U.S.-grown corn, for example, has been almost completely engineered in the lab with 93% of the crop being GMO. Soy is even worse at 94%. That's why both ingredients were the last two to be removed from Chipotle's restaurants.
General Mills had similar difficulties when it made its original Cheerios GMO-free. It took the cereal maker over a year to find a non-GMO supplier of sugar. Half of the U.S. sugar supply comes from sugar beets, and 95% of the U.S. sugar beet crop is GMO. It was fortunate the oats used to make Cheerios were already GMO-free. The artificial ingredients it's removing were already absent from 60% of its cereals, because they either never had them or were already replaced.
Consumers are increasingly swayed by the move away from additives in their food and drink and this fun, friendly marketing ploy by Chipotle Mexican Grill means the fast-casual chain is once again raising the bar on what it calls the fake competition.
Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends Chipotle Mexican Grill. The Motley Fool owns shares of Chipotle Mexican Grill. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.