6 ways Starbucks' incoming chief Brian Niccol transformed Chipotle (2024)

William Blair analyst Sharon Zackfia said in a note that, apart from the return of longtime former CEO Howard Schultz, "Niccol is probably as good of a pick as exists for Starbucks's new leader."

He's been credited with turning around Chipotle during his time at the chain — here's how he did it:

1. Boosting sales

When Niccol arrived at Chipotle in 2018, the chain's reputation was still tainted by its 2015 E. coli scandal where dozens of customers fell ill, andChipotle's sharesplummeted as a result.

Then, early in Niccol's leadership, hundreds of people who dined at a Chipotle in Ohio became sick with an illness related to Clostridium perf ingens.

Chipotle agreed to pay a $25 million criminal fine over charges that its food made more than 1,100 people ill between 2015 and 2018.

Under Niccol's leadership, Chipotle's shares have soared as he bolstered the chain's image and boosted sales, including through a focus on national marketing, mobile orders, and delivery.

In 2017, Chipotle reported revenues of $4.5 billion. By 2023, this ballooned to $9.9 billion.

2. Prioritizing digital

In the mid-2010s, Chipotle was in a "tech deficit," Jack Hartung, then CFO and now president of strategy, finance, and supply chain, previously told BI. Alongside Curt Garner, the chain's chief information officer who joined in 2015, Niccol helped spearhead Chipotle's digital turnaround.

In Niccol's first full year at Chipotle, in 2019, digital sales were up 90%. Online sales now make up more than a third of total food and beverage revenue, up from 11.2% in the third quarter of 2018 when Niccol took over.

3. Rolling out Chipotlanes

Under Niccol's leadership, Chipotle has gone full steam ahead with the rollout of its Chipotlanes — drive-thrus for customers who order ahead via the app.

As of October 2019, there were about 20 in place. By the end of 2023, there were more than 800.

By getting customers to order ahead on the app before using the drive-thru, they can still fully customize their burritos and bowls. Chipotle says the Chipotlanes lead to higher productivity and margins, too.

4. A 'digital make line'

Another crucial part of Niccol's digital strategy was the "digital make line," where staff only make burritos or bowls for delivery or for customers who ordered ahead via the app.

Most locations already had two make lines when Niccol joined Chipotle, but the strategy was unclear, BI previously reported.

Niccol ensured that the second make line was for digital orders and that stores didn't treat these orders as an afterthought.

5. Rewarding loyal customers

Chipotle launched its first loyalty program, Chipotle Rewards, in early 2019. The chain had about 40 million loyalty members as of Q1 2024.

"Whether you're a light, medium, or heavy user, when you're in the rewards program, you come more frequently and you spend more," Niccol told investors in February.

"And so it's a really powerful tool." He added that when customers accrued enough loyalty points to get a free entrée, they'd often pay for a side, too.

6. Automation

In recent quarters, automation has been a hot topic at Chipotle's earnings calls.

The chain has been working on an automated digital make line and a tool called Autocado, which cuts, cores, and peels avocados.

Niccol told investors in February that automation like this makes orders quicker and more accurate and removes tasks that staff don't enjoy as much, and that the company was looking at other robotics ideas "to make prep even more efficient."

Niccol could help Starbucks recover from slumping sales

"Not only is Starbucks more than three times Chipotle's size in revenue with a footprint spanning myriad countries, but current trends are also more challenged than when Niccol joined Chipotle," Zackfia, a William Blair analyst, wrote in her note, citing Starbucks' falling same-store sales.

"While we cannot help but be more optimistic on today's news, we suspect the path to recapturing lost sales will be less linear than it was at Chipotle, which did not face boycott pressures, perceived value questions, or material speed of service issues in 2018," she continued.

Analysts told BI that Niccol needs to tackle slumping sales in the US and China and focus on coffee-based products that attract core customers.

Still, many are positive about his appointment at the company.

"Brian's probably the right guy at the right time," Jefferies analyst Andy Barish told BI.