Dive Brief:
- Chipotle launched Chipotle Virtual Farmers Market Tuesday with Shopify, which will help farmers in the company's supply chain create individualized online marketplaces to sell meat, dairy and grains directly to consumers, according to a company release. The program is designed to give suppliers access to new revenue as they weather decreased demand exacerbated by the novel coronavirus pandemic.
- Chipotle will assist with the design and development of each supplier's website and cover hosting fees on Shopify for two years.
- Four Chipotle suppliers will sell products through their individual digital storefronts to launch the program. Consumers can buy from Niman Ranch, which supplies the chain with pork and steak; Petaluma Creamery, which supplies Monterey shredded cheese; McKaskle Family Farm, which supplies organic white and brown rice; and Meister Cheese, which also supplies Monterey Jack Cheese. These marketplaces can be accessed via farmersmarket.chipotle.com and the suppliers' direct websites.
Dive Insight:
Chipotle has been working with Shopify over the past month to walk partner farmers through virtual onboarding sessions that explain Shopify's platform, according to the release. The restaurant chain's Director of Culinary and Menu Development Chad Brauze will also share recipes inspired by the offerings on Chipotle Virtual Farmer's Market on the company's TikTok channel, adding to its slew of campaigns on the social media platform.
In some ways, the move echoes the restaurant industry's pivot into grocery sales at the beginning of the pandemic. Chains like Subway, Panera and Potbelly now sell ingredients alongside their normal menu items for delivery and takeaway to boost sales as the pandemic eats away at thin margins.
But Chipotle's program isn't a new revenue stream for the brand. It's a strategic play to stabilize its valuable supply chain network and deepen loyalty with its suppliers, which have experienced their own share of economic disruption as COVID-19 cases grow nationwide. Between decreased restaurant demand thanks to dining room restrictions and outbreaks of the virus among workers at meat processing plants and agricultural centers, American farmers and suppliers have been hit hard.
By digitally supporting its supplier base and covering the cost of getting them online, Chipotle could ensure the longevity of its network even as the pandemic clouds the restaurant industry's future. This could give the chain a leg up on competitors if new digital marketplaces help safeguard the financial health of its suppliers. The program could also be a savvy marketing move that builds on Chipotle's commitment to freshness and bolster the chain's brand halo, particularly because the program could decrease food waste.
