Gary Stibel, founder and CEO of the New England Consulting Group, applauded the selection of Niccol with some advice: “I would buy stock.”
“And if I wasn’t going to buy stock, I’d just say this is the right person at the right time,” Stibel says. “This is a win-win for Chipotle. And candidly, it’s a little overdue.”
He likened Niccol’s previous experience at Procter & Gamble to “basic training in the Marine Corps.” Alumni of such consumer packaged goods companies deeply understand supply chains, consumers and marketing strategies, he says. But moving from products to food service is often a difficult transition.
“Here you’ve got a guy who crossed the chasm successfully. He is about the best pick we can think of for that job,” Stibel says. “And it’s important to make the change.”
Stibel expects to see positive headlines for Chipotle soon. He predicts Niccol will push out announcements about new products, pricing or delivery options by the third quarter of 2018.
“I think you will start seeing the new Chipotle. And I think the changes will be significant,” he says. “They won’t be deck chairs moving around the Titanic. They will be a helicopter taking off from the back deck.”
One of Niccol’s biggest challenges will be to bring back once-loyal customers, Stibel says. He expects him to employ a new value proposition to drive traffic, but not one that resembles a fast-food dollar menu.
“Ithink it will be a value menu for people who enjoy the quality of Chipotle and will react to value promotions,” he says. “What he needs to do is bring people back who left and stayed away and create a reason for those people still coming to Chipotle to come more often, spend more money and bring their friends.”
Jason Moser, a stock analyst at the Motley Fool, expects the new CEO to reshape Chipotle’s brand identity with a refreshed marketing strategy (On March 14, Chipotle’s Chief Marketing and Strategy Officer Mark Crumpacker announced he would step down).
For years, Chipotle has relentlessly leaned on its “Food with Integrity” pledge, highlighting the sourcing and quality of ingredients.
“It seemed like whenever Chipotle wanted to do something on the marketing side it was always based on the quality of ingredients and putting themselves on a pedestal,” Moser says. “I think it’s going to be a very delicate balance he’s going to have to strike to help Chipotle bring a new marketing game to the market. But I also wouldn’t expect Chipotle to roll out a Doritos Loco Taco. We’re not going to see something beyond those lines, but I do think he’s going to bring more of an identity to Chipotle beyond just that food with integrity message.”
While he doesn’t expect a traditional [quick-service]-style value menu, he believes Niccol will try to make some play at value. And he’s all but certain that Chipotle will roll out some new menu items to build excitement. And he says a new breakfast menu is almost a must at this point for Chipotle.
“I’m stunned they haven’t yet. The name of the game in restaurants is traffic,” Moser says. “If you’re not selling breakfast, you’re telling the world that there are five or six hours of the day we don’t want your business, we don’t want you in our store.”
Moser doesn’t expect the brand to abandon its focus on quality ingredients any time soon. But he believes the selection of Niccol must have been a “wake-up call” of sorts for Ells, who has often held up the quality of food at Chipotle against that of the value-driven fast-food chains.
“My first reaction was kind of like, oh, the irony. It was a bit surprising to see that they would be bringing someone in from a concept like Taco Bell given the sort of the language Steve Ells had used in prior years,” Moser says. “He wasn’t very complementary of concepts like Taco Bell. I think he considered Chipotle a cut above them because of the food quality. So, I have to believe that was probably extremely hard for Ells to do. But I also thought that maybe he finally came to grips with the fact that he maybe doesn’t have what it takes to bring this business to the next level.”