If you follow QSR news, Chipotle and Subway have both seen better days. In 2014, Chipotle’s store margins rose to 27.2 percent and net income increased by 36 percent. Chipotle opened 192 new stores in 2014 and Subway was opening 50 new shops a week in 2013. But in 2015, our idea of what’s healthy evolved and Subway’s food didn’t, and their fall began. And Chipotle lost consumers’ trust when 55 people were infected with E. coli eating their food.
These brands have more in common than just the timing of their decline. Both Chipotle and Subway looked to provide consumers with a healthier option way before most brands were talking about the health-conscious consumer. Today, they both claim to source high-quality clean, raw ingredients and both describe their consumers as “millennials who would skip fast food in favor of restaurants like Chipotle”, “millennials who prefer quality over price”, or “millennials who are health conscious”.
Chipotle and Subway are in the process of giving themselves a makeover and are both going after the same consumer, but they are taking wildly different tactics to reinvigorate their image. We’ll be keeping an eye out to see which strategy, if either, can bring the health-conscious millennial back to their stores.
In March 2018, Chipotle’s Chief Marketing Officer, Mark Crumpacker, stepped down after struggling for years to bring back the chain’s image after the E. coli outbreak, and now the new CEO, Brian Niccol, and new CMO, Chris Brandt, are trying a new strategy. They are increasing marketing and promotional spending for the rest of the year to remind consumers why they feel good about eating Chipotle. Brandt explains there is, “a unique emotional component to this brand stemming from its authenticity and transparency about food that we need to reinforce and reignite.”
They haven’t released their new campaign idea yet, but Brandt actually says, “become a brand people want to know about, want to be a part of and want to wear as a badge”. (I think he may have borrowed some of our I-Factor language). My question is, can they really get consumers to trust them again?
Subway, on the other hand, is trying to make an epic media come back. Their campaign slogan is “Make it What You Want” and the ads are meant to make an impact, not inform about ingredients. Subway’s Chief Advertising Officer, Chris Carroll, believes they need a more memorable message, “they have not had enough of a cohesive story, and haven’t done a good job creating a connection with our consumers- you know a Coke ad, you know a Nike ad, and you know a Geico ad”, but you don’t know any recent Subway ads. Those are some big goals! Subway is not walking away from values completely, but they do not think it is enough. My question is this: is Subway more authentically embracing their “fast food image” and ignoring the purpose-driven side of millennials?
We know that the answer to success lies in forming a more emotional connection with consumers. At the time this blog was posted, Chipotle’s live I-Factor Score was 62 (pretty positive) and Subway’s was 31 (not too positive). Their respective words clouds are below and they both have a long way to go to when it comes to their stated goals.
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