Chipotle Seeks New Model for Quality Fast Food

Founder says buying from factory farms may be cheaper, but isn't worth it.

June 15, 2009, 1:16 PM

June 16, 2009 -- On Joel Salatin's farm in north-central Virginia, it's a pig's life. Free of the concrete sties and steel pens used in most large hog operations, Salatin's swine spend their days roaming lazily through a leafy green forest, foraging for food, maybe stopping every once in a while for a good scratch on a tree trunk.

Salatin does not run a hog-rescue operation. All of his pigs are headed, eventually, for the dinner table. And not just any dinner table: One of the top buyers of Salatin's pork happens to be Chipotle, the nationwide Tex-Mex restaurant chain.

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The slow-food movement, which seeks to connect food on the table with its source, may not be on the verge of overtaking the fast-food industry. But for Chipotle -- frequently grouped in the fast-food category -- the extra cost of buying from smaller, specialty farmers like Salatin is worth it.

On a recent visit to Salatin's outfit, Polyface Farms, Chipotle founder and chairman Steve Ells talked with "Nightline" about how the restaurant balances low prices and quality products. Chipotle buys no pork from factory farms and avoids chicken and most beef treated with hormones or antibiotics, he said.

"I think it's really important that people know where their food comes from," Ells told "Nightline." "I mean we spend a lot of time researching the very best sources so that when people go to Chipotle, they can rest assured they are getting great food. ... Joel is a leader in this movement. And really, doing things sort of the way they should be done. And it's a great example for everybody to follow."

Salatin's great example is founded on a view of livestock that not every farmer holds. He wants his pigs to be, well, happy.

Chipotle: 'The Pigness of the Pig'

"The beauty of this is they get to choose what they eat, whether they want to eat green material, whether they want to eat the local ... grain, so we trust the pig to make that decision, you know, on what he wants to eat," Salatin said.

Then he elaborated.

"The other thing is that they get to fully express their pigness. This fully respects and honors the pigness of the pig. You know, in our culture today, our Western, reductionist, Roman, linear, fragmented ... culture, we don't ask how to make a pig happy. We ask how to grow it faster, fatter, bigger, cheaper, and that's not a noble goal. A noble goal -- how do I make a pig happy, because a happy pig is one that will have the nice nutrition and will know our respect and honor of the inherent pigness of the pig, which translates, as a culture, how we respect and honor the John-ness of John, or the Mary-ness of Mary."

Ells had a more prosaic take on the virtues of smaller farms.

"Well, first of all, you can breathe here and it smells great," he said. "You can't breathe in a confinement operation. The odor is horrific. And you can see the terror in the pigs' eyes. And they scurry away from you. And they are chewing on the metal bars. And it's so unpleasant. And when I first saw that 10 years ago, I knew that I never wanted to buy another confinement pig, and have that be part of our business model.

"So none of our pigs come from the factory farms anymore," he said. "They are outdoor raised or in deeply bedded barns. They are never given any antibiotics or growth hormones.

"One hundred percent of the chickens that we serve are served vegetarian diet," he said. "And not given antibiotics, and most of our beef now comes from the naturally raised protocol with no hormones and antibiotic-free."

Chipotle buys from a few thousand farms like Salatin's around the country. Ells said he always knew he wanted Chipotle to be different.

"When I started Chipotle 16 years ago, I wanted to show that just because we serve food quickly and conveniently doesn't mean we have to be a typical fast-food experience," he said. "And so we cooked fresh ingredients, in front of the customer, in an open kitchen. There was nothing to hide, there was total transparency."

Ells is actually a classically trained chef. After graduating from cooking school, he opened his first Chipotle, a burrito shop, in Denver in 1993. It was supposed to be a stepping stone to a "real" restaurant.

"I was this aspiring chef, but I needed a little cash cow, I needed something that could fund my restaurant," Ells said. "So I started Chipotle."

Ells said he doesn't mind the fast-food label.

"You know, I don't really get hung up on titles," he said. "I mean, one thing is for sure, Chipotle is very quick and very convenient. But I think we have elevated traditional fast food."

For all the talk about green pastures and animal comfort, the financial engine behind Chipotle was a corporation not always associated with nature's way: McDonald's. The company was the major investor in Chipotle until 2006.

"It was not a strange marriage," Ells said. "I mean, initially I thought it didn't make much sense, my early investors had suggested that I go to McDonald's, and I sent them a business plan and got to meet a lot of the folks over there and they liked what we were doing and so, for a seven-year period, they funded the growth. But they let us run the business, they were primarily a financial thriver behind the business.

"I think that both of us wanted to go our own way, you know, I think that McDonald's focused on their hamburger business years ago, and sort of getting rid of all their partner brands was a good thing for them," he said.

Chipotle's focus on its food sources is hardly cost-free.

"Chipotle has higher food costs than our competitors," Ells said. "A little bit higher. But we have a business model that allows us to invest in higher-quality food, and it's great because obviously, this higher-quality food tastes better, which brings people back and it forms a deep bond with the customer."

Salatin credited Ells for his commitment to smaller farms.

Chipotle: Will Customers Pay More?

"Any person that didn't have that much passion as Steve did, would've just quit," Salatin said. "But they continued to hold our hand into an arena that we weren't used to, to ensure that we could walk through that door."

What about the customer? Will they pay more for locally farmed, free-range, antibiotic- and hormone-free meat?

"Well, I think they will appreciate it more," Ells said. "Again, this is a journey. It's not like you can flip a switch and have 100 percent, you know, free-ranging beef and chicken and pork on the menu at every restaurant in the U.S. It doesn't happen that way.

"This is something that is going to take time," he said. "But I think the movement is gaining speed now. And I am very excited to see lots of chefs really pay attention to where they purchase food. Not only for better-tasting food, but also for the social responsibility aspect of it."

It's not clear whether you can taste social responsibility, but you can taste a good burrito. Regardless of whether you can taste a happy pig, it is a happy meal.

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