Chipotle Mexican Grill Inc. (CMG) is a leading company in the fast-casual dining market, and it competes with five other major companies.
The Chipotle Mexican Grill chain, founded in 1993, has grown to include more than 2,650 restaurants in the United States, Canada, the United Kingdom, France, and Germany.
There are a variety of restaurants in the area, including Moe’s Southwest Grill, Qdoba Mexican Eats, Rubio’s Coastal Grill, and Baja Fresh Mexican Grill.
Taco Bell is also a competitor of Chipotle, but less directly so than Taco Bell, which is the market leader in the fast-food business of Mexican origin.
This restaurant firm employs 83,000 people and is the only one of its size that owns and operates all of its locations.
The company generated $5.7 billion in revenue and made $338 million in 2019. The third quarter of 2020 saw Chipotle report revenue of $1.6 billion and earnings of $80.2 million.
Chipotle’s market capitalization has grown from $1 billion to $38 billion throughout the years. Mexican restaurants must contend with formidable competitors to maintain their market share.
A Technavio analysis projects the fast-casual restaurants market in the United States to grow by $ 150.10 billion between 2020 and 2024, a compound annual growth rate (CAGR) of more than 12 percent.
Although Chipotle is well-positioned to take advantage of this expansion, it must first defeat its biggest competitors.
Several fast-casual chains, including McDonald’s and restaurants specializing in Mexican cuisine, compete directly with the company on this market.
When the sector was confronted with extraordinary obstacles during the 2020 crisis, competition increased significantly. Several different types of companies are dominating the restaurant industry.
Several factors to consider, such as food quality, menu design, price, and size. Other factors include existing reputation, geographic reach, and attractiveness to investors. Chipotle’s competitors rely on a variety of methods to expand their businesses.
Who Are The Top Competitors of Chipotle?
The rapid growth of Chipotle is a result of the increasing demand for Mexican cuisine and the fast-casual dining trend.
Chipotle competitors include Qdoba Mexican Eats, Baja Fresh Mexican Grill, Moe’s Southwest Grill, and Rubio’s Coastal Grill.
The food quality at Taco Bell has improved as it competes with Chipotle despite its fast-food status instead of fast-casual.
Chipotle Competitors & Alternatives
Qdoba Mexican Eats
According to company estimates, Qdoba operated and franchised cafes in over 700 locations in 2021.
It is one of Chipotle’s most prominent competitors because it is a huge Mexican fast-casual restaurant company.
The fact that about half of Qdoba’s restaurants were franchisees in 2019 is a significant distinction.
Qdoba has established an authentic Mexican establishment and has built a loyal customer base.
The fast-casual restaurant chain features eateries in over 700 locations, all of which are either owned by the company or operated by franchisees.
The Mexican food options on its menu make it Chipotle’s fiercest competitor because of its size and diversity.
After growing under their control, the fast-food industry’s behemoth Jack in the Box (JACK) sold Qdoba to Apollo Global Management in 2018.
The company had been expanding for 15 years. Additionally, Chuck E. Cheese’s and Peter Piper Pizza were part of Apollo’s restaurant portfolio.
Qdoba was previously owned and operated by Apollo Global Management and transitioned to a franchise model in 2019.
Qdoba has been infusing its culture and high-quality standards into its restaurants for 15 years. Providing high-quality meals in each restaurant is a significant competitive advantage.
Moe’s Southwest Grill
The Focus Brands company, which owns Moe’s Southwest Grill, will have more than 700 locations by 2022, with most outlets east of the Mississippi River.
The Moe’s Southwest Grill restaurants make a point of having fun and being unique in their surroundings to make them stand out from the competition.
Moe’s Southwest Grill has grown into the undisputed leader in Mexican food in the United States, with more than 725 locations. Moe’s and Chipotle regularly engage in food fights.
Moe’s issued a public warning against queso imitators shortly after Chipotle announced that it would add queso to its menu in 2017. There was a cheese battle that raged for several months before it ended.
They have menu items that are named after television and movie personalities. Focus Brands places a strong emphasis on franchising.
The company has a variety of other brands, including Auntie Anne’s, Carvel, Jamba, Cinnabon, Schlotzsky’s, McAlister’s Deli, and Seattle’s Best Coffee, among others.
Chipotle launched its queso recipe in 2012, prompting Moe’s to counter by offering free queso for the next year under the slogan “Free Queso is Better Than Some New Queso Recipe.”
Moe’s is unique among Chipotle’s competitors in that it is a fierce and powerful competitor.
Baja Fresh Mexican Grill
Baja Fresh is owned and run by MTY Food Group, which owns and operates La Salsa Fresh Mexican Grill, a sibling company of Baja Fresh.
Both Baja and La Salsa function as one organization, which allows both companies to grow their market share and competitive advantage.
Baja Fresh Mexican Grill unveiled a new restaurant design and a revised menu emphasizing the freshness and quality of food served this year.
The restaurant was formerly known as Baja but updated its menu to focus on flavor and freshness. Fresh farm food provides significant advantages over Chipotle in taste and nutritional value.
MTY acquired Baja Fresh Mexican Grill in 2016, which had 162 locations as of 2016. A subsidiary of the company, La Salsa Fresh Mexican Grill, had 23 locations.
Baja Fresh also makes a point of incorporating farm-fresh ingredients in its goods, which they tout.
They do not make use of pre-packaged things. Additionally, the company boasts a tradition of making entirely handcrafted products.
The company has experienced substantial growth because of its creative products. Over the past few years, the company has recovered from several downturns in business, becoming an excellent option for many of its clients.
Taco Bell is a multinational fast-food corporation based in the United States that operates a chain of restaurants.
Taco Bell provides its clients with a wide variety of Mexican culinary products such as nachos, tacos, burritos, and quesadillas.
The company was born in 1962 in Downey, California, and its headquarters are located there.
According to the company, chipotle is still overshadowed in size by the fast-food behemoth Taco Bell, which will have more than 7,000 outlets by 2020.
On the other hand, traditional fast-food restaurants are not increasing at nearly the same rate as the fast-casual market.
Taco Bell has since expanded into other regions of the world, such as Europe, Asia, the Middle East, North America, and other continents.
There were more than 7,072 Taco locations around the world based on estimates by the company.
The company currently has more than 210,000 employees involved in its operations management. The company earned 2.1 billion US dollars in revenue last year.
While Taco Bell has adjusted to keep up with changes in consumer preferences, its competitors have not.
They have developed a Fresco menu that offers healthier options over the past decade and has also enhanced the quality of their food.
Yum! Brands (YUM) owns Taco Bell, the world’s largest operator of fast-food restaurants. Yum! Brands also own Pizza Hut and KFC.
Rubio’s Coastal Grill
Rubio’s Coastal Grill is a fast-casual food franchise based in the United States. It provides a range of Mexican cuisine to its consumers, including fish tacos, tortillas, grilled mahi-mahi, and more.
Rubio’s Mexican Grill was the company’s previous name before it changed.
Ralph Rubio is the company’s founder, and he founded the company in 1983. The company’s headquarters are in Carlsbad, a suburb of San Diego, in California.
Chipotle was not established for ten years before Rubio’s restaurant was online and running smoothly.
However, rivals like Chipotle, Qdoba, Moe’s, and Baja snatched Rubio’s customers.
Mexican cuisine is the specialty of Rubio’s Coastal Grill, a fast-casual restaurant chain in the United States.
The company also places a strong emphasis on its fish tacos, considered its specialty item.
As a result of the crisis, the country’s problems worsened in 2020. According to the company, it had restaurants in more than 200 places before 2020, but it now has 167 sites.
In San Diego, California, Rubio’s first opened its doors in 1983. It has more than 200 locations in the United States and internationally and operates out of Carlsbad, California. However, only a few regions in the United States are covered by this law.
The Rubio Company filed for bankruptcy protection in October 2020 after failing to pay more than $82.3 million in outstanding financed debt commitments.
Rubio finished its restructure at the end of 2020 and is now prepared to compete for Chipotle’s market share more aggressively after the year is over.
Freebirds is a quirky Mexican restaurant similar in feel and appearance to Chipotle but offers some of the most interesting and highly sought-after meals on the menu.
Freebirds World Burrito serves burritos for breakfast, lunch, and dinner, a fast-casual burrito with San Antonio, Texas.
The company was established in 1987 in Santa Barbara, California, and has offices worldwide.
A few fast-casual eateries in the area serve burritos cooked with grass-fed steak and free-range chicken. It is one of that handful.
Chipotle and other fast-food restaurants only serve cilantro-lime rice, whereas Freebirds serves classic Spanish rice.
It runs out of Austin, Texas, and owns over 60 sites throughout the United States.
Freebirds competes in markets similar to Chipotle, although they are not as widely distributed. For now, the company plans to stick with its current locations, and it has no plans to grow anytime soon.
There is a lack of supply for these materials, and their price is always rising, which puts a strain on the bottom line.
The company has been hit hard by high operating costs over the last few years, which has forced some of its locations to close.
Freebirds burritos are similar to Mission burritos, one of the most popular dishes in San Francisco’s Mission District. There are a simple menu and buffet options.
Since the company’s name implies burritos are its primary focus, that is its primary focus. Additionally, the business sells nachos and tacos and the Mexican dishes mentioned previously.
McDonald’s Corporation is a reputable fast-food company based in the United States. Richard and Maurice McDonald founded the company in 1940.
The McDonald’s Corporation is the world’s largest food chain company, operating more than 37855 hotels and restaurants in more than 100 countries.
McDonald’s has been around since 1940 and is a household name around the globe. The term is synonymous with the fast-food world and is well known worldwide.
Chipotle and McDonald’s have worked together for many years. It took 15 years for Chipotle Mexican Grill to spin out of McDonald’s, and the burrito eatery has since attracted a wide range of investors and customers.
McDonald’s serves hamburgers, French fries, salads, fish, milkshakes, smoothies, soft drinks, fried chicken, breakfast items, desserts, and wraps, among other things.
McDonald’s has approximately 1.7 million employees worldwide, making it the second major private company regarding employment opportunities.
The McDonald’s chain is now a significant indirect competitor of Chipotle. McDonald’s does not have a stellar reputation for burritos, but the company still has more than 14,200 locations across the country. Hence, it can capture customers before getting to a Chipotle location.
McDonald’s was one of the few fast-food corporations to see an increase in earnings during the third quarter of 2020. Chipotle has exceeded expectations and anticipates completing its turnaround by the third quarter of 2020.
The Kentucky Fried Chicken Restaurant Corporation of the United States is a multinational corporation that operates fast-food restaurants. It was founded in the year 1930.
Kentucky Fried Chicken is a world-famous brand of fried chicken that originated in Kentucky.
KFC tested a new chicken sandwich in 2020 and discovered that it could generate nearly double its original sales forecast.
KFC is the second-largest food-chain restaurant corporation in the world behind McDonald’s. According to an estimate, there are approximately 22,621 KFC locations in 136 countries worldwide.
The fast-food giant planned to offer the sandwich in select locations starting in January 2021, and it was available in all 4,000 KFC locations by the end of February 2021.
The addition of the new sandwich to KFC’s menu strengthens the company’s competitive advantage versus Chipotle.
KFC offers a variety of products such as salads, French fries, fried chicken, chicken sandwiches, breakfast, desserts, and soft drinks. Yum is the parent company of KFC, a subsidiary of Yum.
KFC employed roughly 90,000 people in various locations worldwide in 2018. KFC generated 2.64 billion US dollars in revenue for 2018.
Burger King is well-known throughout the world, and it is only second to McDonald’s in terms of popularity.
The company opened several restaurants in October 2020 using its new off-premises restaurant design factors.
The creative designs make it easier for customers to purchase online and pick up their orders at the curbside using their mobile devices.
Burger King plans to open the first restaurant with these design features in Miami, the Caribbean, and other parts of Latin America by 2021, followed by the rest of the world.
Burger King will have touchless stores that are 60 percent smaller than their typical counterparts.
Burger King’s new restaurant design elements give it an edge over competitors such as Chipotle and other fast-food restaurants in the market.
Starbucks, the world’s most famous coffee shop, is synonymous with freshly made coffee worldwide. There are also plenty of other food options to tempt some Chipotle customers.
Starbucks’ fiscal year 2020 revenues are expected to increase by 18 percent from $22.4 billion in the fiscal year 2017.
On the other hand, Chipotle has seen a 25 percent growth in revenue over the same time.
Starbucks has a higher profit margin, with approximately 14 percent in 2020, compared with 6 percent for Chipotle.
Starbucks operated more than 320,000 locations in 83 countries and territories worldwide.
Chipotle has 2,700 locations, with more than 98 percent of them located in the United States. Starbucks’ geographic breadth and its number of locations help it stand out against Chipotle.
El Pollo Loco
A Mexican and American chain of restaurants known as El Pollo Loco operates in the United States.
The company was founded in 1974, and its headquarters are in San Pedro Gaza Garcia, Nuevo Leon, Mexico, with offices located in several other cities along the country’s coast.
Customers can dine on Mexican cuisine as well as a chicken that has been grilled over fire.
The first El Pollo Loco restaurant in the United States was opened in 1980 on 503 Alvarado Street in Los Angeles, California.
There are now over 487 locations in the United States and more than 50 in Mexico.
El Pollo Loco generates roughly 441 million US dollars in revenue annually.
Final Words on Chipotle Competitors & Alternatives
Chipotle has enjoyed rapid expansion since being founded in the early 21st century. The growing popularity of fast-casual dining in the United States and increased Hispanic culture in America have driven Chipotle’s growth.
The stock of Chipotle has risen to new highs after initially plummeting in response to the disaster, having gained more than 100 percent in less than two months.
Chipotle does not have an exclusive market share as a fast-casual Mexican restaurant. The company will face established rivals such as Qdoba Mexican Eats and Moe’s Southwest Grill.
The structure of a company may be the most important factor to consider for investors. The company owns the majority of Chipotle’s restaurants.
Stock market investors find themselves faced with a volatile and aggressive investment environment. Those looking to open a franchise, on the other hand, should turn to their competition.