Chipotle has developed a winning business strategy selling good food that promotes health, is produced in a sustainable manner and is affordable. In comparison the fast food industry is confronting a “dollar menu” revenue growth crisis as their strategy for winning customers with superior low prices conflicts with the increasingly awareness among consumers that fast foods are a major contributor to our national obesity and diabetes epidemic.
The Cost Impacts Of Cheap Food
Human Health. The American diet based upon cheap food has created unintended consequences that are making cheap food unaffordable. Americans consume more soft drinks than any other group of consumers in the world. The consequences generated by this scale of soda consumption as outlined in a letter sent to the U.S. surgeon general from more than 100 health organizations and municipal health departments include obesity, coronary heart disease, stroke, type 2 diabetes, some cancers and psychosocial problems.
Environmental Impacts. The environmental impacts of cheap food are enormous. The production and delivery of food accounts for 50% of U.S. land use, 80% of our water consumption and 10% of our total energy use. The waste stream of cheap food is a staggering amount of garbage. For example, we throw away 25 billion paper cups each year because they are “free.” That adds up annually to 363 million pounds of waste and the loss of more than 9 million trees. Because food is “cheap” we throw away 40% of it representing $165 billion of consumer spending being annually dumped into landfills! Cheap food’s super size portions and $1 menu items that are rich in fats and sugars have made most of us overweight, created a national obesity epidemic and is a major factor behind the alarming 23% increase in children afflicted by diabetes over the last eight years. The question of whether we can afford cheap food is becoming much too real.
Good Food Wins
The good news is that we are increasing shifting our spending toward food that offers good value, is healthier for us and is produced in a more sustainable manner. Organic food sales now grow at a 10% annual rate compared to non-organic food sales growth of only 3%. As importantly, American businesses like Whole Foods and Chipotle are pioneering how to make good food competitive in terms of value and convenience. And selling good food is turning out to be a winner for businesses and investors. For example, Chipotle recently reported a 21% annual sales increase including an impressive 8% increase in same store sales achieved even in this slow growth economy.
The following video interview of Chris Arnold, Chipotle Communication Director conducted at the Sustainable Brands Conference profiles why Chipotle believes good food will win!
Look for the upcoming companion article to this posting on “Restaurant Green Best Practices That Win Customers and Grow Profits.”
Bill Roth is the Founder of Earth 2017. He coaches business owners and leaders on proven best practices in pricing, marketing and operations that make money and create a positive difference. His book, The Secret Green Sauce, profiles business case studies of pioneering best practices that are proven to win customers and grow product revenues.