Chipotle Earnings Benefit From Scarecrow Ad; Expands Vegetarian Fare

Chipotle's haunting scarecrow viral video and an increase in traditional marketing helped boost the restaurant chain's profits in its third quarter.

Third quarter profit jumped 15 percent to $83.4 million. Additional spending on marketing and ads, including its popular "Skillfully Made" viral video boosted traffic to its 1,500-plus restaurants, the company said. Sales at Chipotle restaurants open at least 13 months rose 6.2 percent in the quarter.

Plus, Chipotle is expanding its vegetarian options to the East Coast, co-chief executive Steve Ells said on last Thursday's earnings call, Bloomberg reported. After a test in San Francisco, Chipotle is expanding its braised, spiced tofu to customers in Chicago, Baltimore, Philadelphia, Richmond, and Washington, D.C., this week. The chain is also removing bacon from its pinto beans to cater to vegan customers

In addition to airing on TV, Chipotle's three-minute animated video, "The Scarecrow," generated 5.5 million views in the first week after it was posted on September 11. Now, the video has more than 7 million views on YouTube.

The video takes on the processed food industry with its story of a world in which a scarecrow is forced to work in the factory of fictional industrial giant "Crow Foods". The scarecrow ultimately rebels, to produce and market his own, farm-grown food.

Chiptole's revenue is projected to increase 16 percent this year, slower than the 20 percent increase in 2012, according to Bloomberg.

For more, see:
This Bloomberg article
This MediaPost article
This Bloomberg Businessweek article

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