For years, the brass at Chipotle Mexican Grill Incorporation. knocked rivals’ fast-food fare. It was overly processed, the particular rap went, with too many substances, none of them very fresh or healthful.
Now struggling Chipotle is switching for help to an industry crusader for your sort of fat-crammed, high-calorie items that make the burrito chain shudder. The brand new chief executive officer will be Brian Niccol, that has run Taco Bell for three many years and met sweet success dating crowds with indulgent dishes for example Doritos Locos Tacos and A. Mirielle. Crunch Wraps.
Investors including Expenses Ackman’ s Pershing Square Funds Management applauded the announcement Wednesday, sending Chipotle gives up as much because 13 percent in late trading.
“ Taco Bell will be kind of edgy and forward considering — they’ re not an previous stodgy-type brand, ” said BTIG analyst Peter Saleh. With Niccol, Chipotle “ has gotten an experienced executive who’ s had a great deal of success. ”
Niccol, 43, can replace Steve Ells, 52, in the dramatic changing of the guard. Ells, who will remain chairman, founded Chipotle in 1993 as an alternative to traditional fast-food restaurants, building it into a business that stressed the wholesomeness from the ingredients and derided the types of offerings that populate Taco Bell menus.
As TOP DOG of Yum! Brands Inc. ’ s Taco Bell division, Niccol was credited with helping change sales and speeding the introduction of technologies. He began at that chain this year, working in marketing and product innovation prior to taking the top job in 2015. During his tenure, Taco Bell lured diners with limited-time choices, recently generating buzz with its brand new Nacho Fries.
Taco Bell under Niccol also embraced digital ordering, a single area where Chipotle has lagged. The company has had other problems, which includes suffering a string of product sales dampening foodborne-illness crises spanning many years.
Niccol will start since Chipotle CEO on March five, and will also join a board associated with directors that has been criticized in the past to be too insular.
Ells praised his alternative, saying that “ his expertise within digital technologies, restaurant operations plus branding make him a perfect suit for Chipotle as we seek to improve our customer experience, drive product sales growth and make our brand name more relevant. ” For their part, Niccol said he has “ tremendous respect for the Chipotle brand name and its powerful purpose. ”
A spokesman for Pershing Square, Chipotle’ s biggest aktion?r, called Niccol “ the right chief to reinvigorate the company and help it to achieve its enormous potential. ” The firm held more than 10 % of shares as of September.
Chipotle stock lost almost forty percent of its value over the last a year, falling for five straight classes after its fourth-quarter report demonstrated it was still struggling to boost client traffic. New dishes such as queso didn’ t have the desired effect.
‘ Good Fit’
On Tuesday, after the Niccol information, the shares went as high as $283. 21 in late trading, while Yum’ s dipped as much as 1 percent in order to $77. 01. Yum has obtained 14 percent in the last year — partly powered by Taco Bell’ s strength.
Jules Felss Masino, Taco Bell’ h president for North America, and Liz Williams, head of the brand’ s i9000 international business, will replace Niccol in a co-CEO role, Yum mentioned.
While Niccol can be “ a good fit” for Chipotle, “ he’ s got several work to do, ” BTIG’ ersus Saleh said. “ Taco Bell is a predominantly franchised model using a drive-thru. Chipotle is a company-owned business structure with no drive-thru. Chipotle is also the $12 check. Taco Bell is most likely half that. ”
A key factor will be how much area Niccol will be given to maneuver plus make changes, said Bloomberg Cleverness analyst Michael Halen.
Niccol “ has a great background, ” Halen said. “ It will probably be critical that chairman and owner Steve Ells gives him the particular autonomy to succeed. ”