As in existential crisis.
That's how I view Chipotle's (CMG) hiring of Brian Niccol, former CEO of Taco Bell as its new CEO.
I do not think you could get a CEO from a company more antithetical to the culture and ethos and even the thought processes of a company like Chipotle if setting out to do so.
But maybe that's exactly what they set out to do so because the old model is either broken or, some would say, can never return because it was based on "Food with Integrity" and the idea that Chipotle still stands for that after 500 people got sick from there in 2015, well let's just say the slogan sounds almost 1984-like at this point.
How are these two different? For years, whenever you talked to execs at Chipotle it wouldn't take long -- like five minutes max -- before you would get the inevitable Taco Bell burrito comparison (never by name fortunately for Niccol), with Chipotle being a home kitchen and Taco Bell being a factory.
It's not hard to see why they brought it up. A beef burrito at Chipotle has beef, water, chipotle chili, rice bran oil, cumin, garlic, black pepper, oregano sale and Bayleaf on a tortilla made of wheat, flour water, canola oil and salt.
Let's see, in the beef: beef, water, seasoning, cellulose chili pepper, maltodextrin, salt, oats (contains wheat) soy lecithin, spicy tomato powder, sugar, onion powder, citric acids, natural flavors including smoke flavor, torula yeast, cocao, disodium inosinate, guanylate dextrose, lactic acid, modified corn starch , salt, sodium phosphates, soy wheat. Tortilla: vital wheat gluten, cellulose gum, wheat starch, calcium carbonate, calcium propionate, sorbic acid and potassium sorbate.
I 'm not kidding.
Right from the labels.
Next: Former CEO Steve Ells has always railed against the Taco Bell model. A few years back he said in an interview, "the traditional fast food sector had traded food quality and taste for low-cost and ease of preparation."
Well, some would say on Wall Street, isn't that exactly what the now considered food scandal-wracked Chipotle needs, lower-cost, easier-to-prepare food?
Ells has said that the other fast food companies in the industry have "aggressively marketed low prices to entice customers to visit more often which has resulted in the need to reduce costs by cheapening ingredients, and by compromising the overall dining experience."
You got that right. Chipotle needs a revival of traffic, same-store sales, and if it has to bring them it has to be able to make more money per cheaper order.
Finally, the Chipotle of old prided itself in not opening stores aggressively, particularly overseas where it's been incredibly painful to watch the paint-dry like activity. Each, of course, is owned by Chipotle to keep rigorous quality controls on the operations.
Yum Brands (YUM) has been putting up as many Taco Bells as it can all over the place, with special "you shouldn't apologize for value but celebrate it," campaigns, replete with all new kinds of technology to get in and get out and presumably keep those $1 price points. They are franchised, with a tight leash, but franchised nonetheless.
If you dig even one layer deep, into the Belluminati campaign, which is the hilarious not-so-secret society that knows the greatness of a buck's worth of Mexican food, as opposed to the actual secret Illuminati society, you realize that what Niccol's Taco Bell is a heck of a lot edgier than Chipotle's was even in its zenith. What a fantastic campaign.
How can these two be reconciled? How is it going to work?
I have no idea. But when you pick Niccol you pick a different company, not the one you have.
The good news? The one you have is producing some of the worst returns imaginable.
The bad news?
Chipotle's a lot more natural, which, in the new age, is supposed to matter. Hmm, maybe Taco Bell has figured out how to make things taste better with better chemistry and it's safer and cheaper. And in these days, that's all that matters to both customers and to Wall Street.