Chipotle's strange sustainability strategy

The burrito maker should focus on food, not energy emissions

Welcome to the first collaboration post on Sustainable Advantages! Caetie Ofiesh is here writing with me about Chipotle’s misstep in sustainability strategy. She’s had a long history in the food and restaurant business and writes about making delicious food and beverage choices. Thanks for collaborating Caetie!

Chipotle’s appeal to base instinct

I was recently struck by an email I received from Chipotle about their commitment to sustainability. In the email, they encouraged the use of dark mode on your devices to save energy:

The email goes on to talk about how they source 40% of their electricity from renewable sources and there’s even a link to the sustainability section of their website where there is a lot of talk about sourcing local and organic ingredients. This is all lovely for the environment, but there is no talk about the elephant in the room that the biggest positive climate impact Chipotle could have is pushing folks away from beef and toward their more climate-friendly menu options like chicken, tofu sofritas, or veggies. Our World in Data has a beautiful chart explaining why.

I’ve talked before about how chicken has made a huge run and Chipotle sells more chicken than anything, which is a win for sustainability. Why don’t they talk about that more? I believe the answer is the irrational consumer.

Irrational cow love

The USDA provides a dataset for weekly retail grocery sales that covers most states and gives us a decent cross-section of how people spend their money on food. This data is fun for many reasons (e.g. alcohol sales the last week of the year routinely approach 11% up from an average of 2%, and Valentine’s Day provokes sweet packaged goods to also bump over 10%). These seasonal trends aside, I want to focus on non-grain-based protein sources. 

Nuts and legumes of all types combined accounted for a maximum of 2.7% of the weekly share of dollars spent and on average this number is only 1.7%. Fish and eggs combined are in the same range and variation as nuts and legumes, typically accounting for ~2% of weekly spending. Meat, however, accounts for 12% of spend on average with only 3% of that spent on poultry products. 

These numbers make no rational sense. Red meat is demonstrably worse for health, has a more expensive unit cost, and has a host of insurmountable environmental challenges when produced at scale. Consumer markets are not rational though, which means just by writing this someone is going to believe I don’t enjoy a delicious bacon cheeseburger (they would be wrong!). The point is that beef in particular provides a cultural or intrinsic value to the consumer that no amount of education is going to result in rapid change, and this value is at odds with efforts to mitigate climate change.

Dark mode vs. veggie mode

Let’s do the math on the climate impact of switching to dark mode on your phone that Chipotle proposed in their marketing email and compare it to the climate impact of driving more consumers to choose chicken or veggie options instead (or in addition to).

A Google Pixel 5 has a 4000mAh battery. If I completely drain the battery and charge it back up using a 5V slow charger, I use 20 watt-hours. In the best case, I can save 40% of that energy every day by switching to dark mode, so I’m saving 8 watt-hours of power every day. Over a year that adds up to about 3kWh. If I get that 3kWh from a typical coal power plant, then I have added 6.9 pounds of CO2 to the atmosphere. This is a worst case scenario because the power mix in Raleigh (where Dustin lives) includes around 50% nuclear, solar, and hydropower which are zero emission. Let’s use that 6.9 pounds of CO2 anyway as a base case.

I enjoy Chipotle so let’s say I eat there 20 times per year (not an exaggeration for me!). If I choose to eat a bowl with barbacoa all 20 times, I am getting about 5 pounds of beef for the year assuming a quarter-pound serving. Excluding methane emissions and doing a conversion from kilograms to pounds, those 5 pounds of beef result in 560 pounds of CO2 being emitted annually, or 28 pounds each time I choose beef. Choosing chicken emits 5.6 pounds per visit, or 112 pounds annually; sofritas 1.7 pounds per visit, or 34 pounds annually; and the veggie option 0 pounds per visit compared to the baseline of a standard bowl.

Here’s a table showing the emissions savings vs beef of choices on the Chipotle menu, alongside how much using dark mode reduces emissions:

So just to recap, I save 6.9 pounds of CO2 per year by switching my phone to dark mode, and 22.4 pounds of CO2 per visit by choosing to order chicken instead of beef just once (more if I go full veggie) when I go to Chipotle. If I choose chicken over beef just 2 more times (3 times per year), I save 10x the pounds of CO2 annually. 

I can offset more than 3 years of dark mode savings by choosing chicken over beef just once.

We can slice these impact numbers in all sorts of ways, but the bottom line is that dark mode on devices doesn’t do much for the climate compared to menu choices.

Chipotle’s missing upside

Meat spoils more quickly than every other food category, making holding costs high. Any good food service business knows that you want to err on the side of running out of expensive products like meat because no one wants to throw out hundreds of dollars every evening. Despite this, 1 out of 4 animals slaughtered are not consumed. It’s not that we should stop meat consumption altogether, but we can get much more efficient and still make a huge positive climate impact while improving personal health. The question is, who does the work?

There’s an opportunity here for Chipotle. It is the company that has broken through with consumers en masse and serves up much lower emissions options than any other fast food chain of its size. Chipotle’s menu prices beef options the highest, which makes sense given the highest upfront and holding costs among their options. However, chicken, their most popular option, is priced the same as their vegetarian options. This doesn’t make sense with any demand-based, cost-based, or sustainability-based pricing methodologies. By all measures, I would expect chicken to be the moderately priced option and vegetarian options to be much cheaper. 

Last year, Chipotle did raise menu prices by around 3% as a whole, but unbelievably didn’t further differentiate beef prices because the costs of vegetables and paper came down enough to offset their increasing beef costs. 

Chipotle consistently promotes goals of achieving direct emissions reductions, but the largest impact they could have would be to influence customer decision-making by differentiating their pricing further. Lowering the price of the veggie options would reflect their stated sustainability values, more closely align with their cost structure, and improve their margins without having to rely on happenstance cost reductions in paper products. They could improve margins even more on a cheaper veggie option by dropping the included guacamole. There's some precedent for this type of pricing being a good move for Burger King in Germany. 

Chipotle is already taking the risk of disaffecting folks with its sustainability-focused marketing. This kind of price drop would give them a chance to shine a light on real climate impact, instead of leaving their goals in the dark.