Investor confidence in Chipotle Mexican Grill (CMG) continued to grow on Monday after the fast casual food restaurant chain launched a nationwide ad campaign highlighting its vow to provide healthier cuisine than rival brands.
The company’s shares, which have been rising since Chipotle announced that a third of its 12 directors will not be up for re-election at its next annual general meeting, climbed a further 1.55 percent on the news to $454.28, indicating a growing belief that its previous troubles may now finally be behind it. Chipotle has been working to repair its image and take back market share from peers after a series of damaging food-borne illness outbreaks in late 2015 impacted sales and dented confidence in the company. (See also: Four Chipotle Board Members Step Down.)
The campaign, titled “As Real as It Gets”, marks the company’s first use of national broadcast television and attempts to promote Chipotle’s recent message that it is the only national restaurant brand that does not use added colors, flavors or preservatives.
"This campaign challenges the conventions of fast food advertising by being completely real — not only about our food, but about the world we live in — and it does so with an optimism and playful humor that is very much in line with our brand," Chipotle chief marketing and development officer Mark Crumpacker said.
“As Real as It Gets”, which was developed with San Francisco-based advertising agency Venables Bell & Partners, features appearances from Sam Richardson, Jillian Bell and John Mulaney. The three comedians are seen revealing their fears, desires and secrets inside a spacious burrito.
Goldman Sachs recently forecast that Chipotle will be one of the few companies to grow its profits over the next two years. The investment bank’s analysts predict that Chipotle’s profit margin will widen by 372 basis points in 2017 and a further 114 basis points in 2018. (See also: Goldman Identifies the Most Profitable Stocks for 2017.)
The company is due to issue its next earnings report after the market closes on April 25. Fourth-quarter earnings came in below analyst expectations, although Chipotle is confident that sales have picked up in the first-quarter of 2017. The company credits this success to the introduction of new digital ordering technology, which it claims has sped up waiting times at its outlets by as much as 50 percent.