Chipotle is adding new items to the menu, and it could be the key to finally convincing customers to come back to the chain
- Chipotle launched "Lifestyle Bowls" - the Paleo Salad Bowl, the Keto Salad Bowl, the Whole30 Salad Bowl, and the Double Protein Bowl - this week.
- While Chipotle had long avoided changing its menu, the chain is now adjusting its strategy.
- New menu items could help bring more customers to Chipotle, according to BTIG analyst Peter Saleh.
Chipotle is finally fully embracing a strategy that the fast-casual chain once refused to try.
On Wednesday, the chain announced it was launching a line of "Lifestyle Bowls" designed to fit into different buzzy dieting trends. The line consists of the Paleo Salad Bowl, the Keto Salad Bowl, the Whole30 Salad Bowl, and the Double Protein Bowl, and is available to order via app or website.
Read more: Chipotle is trying to win over paleo, Whole30, and keto dieters with new menu items
Chipotle long refused to add new menu items and, unlike other burrito chains such as Moe's, does not typically offer named menu items. However, that is clearly changing - something that is exciting analysts.
"We believe menu innovation coupled with improved digital access could reignite traffic growth," BTIG analyst Peter Saleh wrote in a note to investors on Friday.
"We believe the introduction of these bowls has low-risk but high-return potential as they cater to consumers' prevalence for lifestyle/diet-oriented meals while utilizing existing ingredients already in the restaurant," Saleh wrote. "Additionally, the online only strategy limits throughput risk as digital orders are typically placed well in advance of pick up."
More new menu items may be on the way.
"We believe menu innovation could be a catalyst for shares, following this week's launch of Lifestyle Bowls we believe demand exists for other items like quesadillas and that management should be able to solve any throughput hurdles," Saleh writes.
The Lifestyle Bowls are not the only sign that Chipotle wants to build out its menu.
CEO Brian Niccol, who joined Chipotle in 2018, was known for utilizing buzzy new menu items to help turn around Taco Bell's business during his time at the fast-food chain. As Chipotle still works to boost sales to the levels they were before the chain's E. coli crisis three years ago, Niccol seems to be applying a similar strategy at Chipotle.
In June, the chain announced it was adding five new items to its Manhattan test kitchen menu, including quesadillas, avocado tostadas (which an executive called Chipotle's take on avocado toast), and a chocolate milkshake. In September, Chipotle reintroduced chorizo to its stores nationwide for a limited time. And, the chain's 2017 launch of queso helped kick off a new era of menu innovation at Chipotle.