Chipotle Automation for Burrito Bowls and Salads Is Officially Being Trialed
Key takeaways
- Chipotle is testing out automation for fulfilling its burrito bowl and salads digital orders
- The restaurant chain already has tortilla chips and guacamole automation under testing
- Chipotle stock has gained 35% since the start of the year
That (automated) guacamole costs extra. Chipotle is said to be exploring automation at its innovation center in a bid to reduce labor costs in the long term. It’s not the only chain restaurant looking at the groundbreaking new tech, which is said to improve consistency and speed up ordering.
Investors will be hoping the move raises Chipotle’s stock price even higher, given that the Mexican food chain has been absolutely flying for years. Let’s get into the details of what exactly Chipotle is trialing and how the stock has performed lately.
What is Chipotle’s automation trial?
Chipotle is testing new robotics to see whether it can make customers’ burrito bowls and salads cheaper and faster. If it’s successful, the robot is set to handle Chipotle’s digital orders, which the chain says two-thirds of which are burrito bowls and salads. When it’s done making an order, it will pass it on to a human employee to package up and ship out.
This isn’t Chipotle’s first foray into automation. The Mexican restaurant chain developed Chippy, its automated robot that makes tortilla chips, which started its first tester shift last year in one of Chipotle’s California branches. Chipotle is also testing an automated guacamole maker called Autocado.
Chipotle’s latest automation test is down to a partnership with Hyphen, a start-up focused on automating restaurant kitchens. Chipotle invested in Hyphen last year for an undisclosed amount, with Hyphen achieving a valuation of $104 million.
Other brands like Sweetgreen and Starbucks have already explored or implemented automation in their branches. The former opened its first automated location in May, and Sweetgreen CEO Jonathan Neman anticipates automation in every Sweetgreen restaurant in the next five years.
How has Chipotle stock performed lately?
Chipotle stock is currently trading for $1,842. It’s suffered a 4.8% drop in the last month due to broader market influences from which the stock market has suffered, but Chipotle stock has gained 34.7% since the start of the year.
Looking further back makes Chipotle’s share price gains even more impressive. In the last five years, Chipotle has skyrocketed 311% in value. It broke through the $2,150 mark in the summer before economic worries weighed on the markets.
A closer look at Chipotle’s latest earnings beat reveals why the stock is so popular. Second-quarter revenue missed expectations but was still up 13.6% from last year. Chipotle’s same-store sales increased by 7.4%, and its operating margin climbed by 17.2% from the same time last year. That’s a lot of ticks in Wall Street’s books.
The bottom line
Chipotle is on a winning streak, and automation is likely to be received well by investors looking to see the Mexican food chain improve its margins even further in the long term. We’re still years away from seeing the tech rolled out nationwide, but it’s a promising start.
