Chipotle’s Tasty Made burger concept has switched from the “better beef” it touted at opening, opting instead for conventionally raised beef that has allowed it to lower prices, according to a client note from Nomura Instinet restaurant analyst Mark Kalinowski. His assessment of the Lancaster, Ohio, restaurant is interesting, observant and informed.
Chipotle opened the first Tasty Made (a second is planned) little more than a month ago (Oct. 26), but it already has made several changes, including lowering prices. Kalinowski notes that the price of its Double Tasty Made Cheeseburger, more than $6 at opening, is now $4.10. This allows it to compete with QSR as well as fast-casual competitors.
Chipotle also has changed the beef used at Tasty Made. At opening it crowed about its use of beef from animals humanely raised without antibiotics or added hormones. However, 90% of customers didn’t know or didn’t care. Those who knew were more concerned that prices were too high, Kalinowski writes. So Tasty Made now serves conventionally raised but still fresh beef. He notes that the concept “could eventually gravitate back partially or fully toward its original approach.”
He reports that Tasty Made, similar to McDonald’s, sees 52% of its business via the drive-thru window. Chipotle has no drive-thrus, but Kalinowski suggests Tasty made could lead them to at least try drive-thru sales where feasible.
Is there a niche in the marketplace for Tasty Burger? Kalinowski write, “We are also intrigued by Tasty Made’s viewpoint that there exists ample competitive space in the burger sector in between traditional fast food and the so-called “better burger” (fast-casual) spaces.”
A second Tasty Made reportedly is planned for Pickerington, Ohio, opening in early 2017.
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