What if Chipotle Mexican Grill (NYSE: CMG) threw a queso party and nobody came? Last week was supposed to be a big deal for the former fast-casual darling. It rolled out queso nationwide on Tuesday, giving the chain the same melted cheese topping that its smaller rivals have been pouring over burritos and chips for years.
Investors are digging the move. The stock moved higher in four of the five trading days last week, soaring 4% along the way. Unfortunately for Chipotle, there’s a disconnect between Wall Street and Chipotle’s customers. The early reviews haven’t been kind. Chipotle’s push to make its queso different and all-natural has created a product that’s standing out – but not in a good way.
Who moved my queso?
Social media blew up last week, and the overwhelming majority of tweets about Chipotle’s new menu item have been devastating.
“Public Service Announcement: Chipotle’s queso is absolute TRASH. I had such high hopes. They hyped it up way too much. Gross”
– @Alex Henry (@alhenry25)
“Me: Giving your customers E. Coli is about as bad as it gets.
Chipotle: Hold my beer. #chipotlequeso”
– @Nic Fowler (@Nic_Fowler_)
“Okay chipotle queso SUCKS. I paid $5 for the worst “queso” I’ve ever eaten. The police are on their way, Chipotle.”
– @✰ Alexa ✰ (@UH_LEX_UH_)
There will always be boo birds with any product rollout, but in this particular case it’s hard to find people out there gushing about Chipotle’s queso. The positive tweets about it seem to have been made in the days leading up to Tuesday’s release, but reality is painting a different picture from the hype.
You don’t need to twist my arm to grab some Chipotle, so I tried it myself. Was it really that bad? My first question was what Chipotle would have to give up, in terms of space, to make queso work, given the limited slots on its assembly line. A fellow Fool had pointed out that the sofritas tray was cut in half to make room for queso, but the Chipotle I went to had queso splitting a slot with chorizo. It’s probably not a good thing that the last two menu items Chipotle has added before queso – chorizo last year and sofritas before that – seem to be the offerings the chain is scaling back on to give its new introduction some room on the assembly line.
And I can tell you that Chipotle’s queso is as bad as the social-media consensus seems to suggest. It’s a pungent, veggie-speckled cheese soup, a combination that doesn’t seem to work when paired up with its already tart lemon- and salt-spiked chips. It’s only less of a train wreck when paired with Chipotle’s heartier entrees. The biggest knock against it is that in Chipotle’s push to eradicate industrial additives from its queso to fit its “food with integrity” mantra, the all-natural concoction lacks the qualities consumers crave. It’s not thick enough to cling to food the way conventional processed queso does. Ramping up the flavor profile to offset its watery consistency only makes it an irritating party guest in your mouth, instead of the subtle enhancer that queso is at Moe’s, Qdoba, and just about anywhere else.
There’s so much riding on Chipotle’s queso. The new item joins guacamole as the only topping customers have to pay extra for, something that should result in higher check averages. Queso is also a logical chip topper, making it a driver of incremental chip sales. It could’ve been what kept customers from opting for Chipotle’s rivals.
There’s no denying that queso will spike sales during the latter half of this month, hopefully giving the quarter a spark after another food-borne-illness miscue this summer. The problem is that unless Chipotle’s queso is an acquired taste or if there are massive sums of fans too busy enjoying the stuff to gush about it on social media, the sales spike will be short-lived. The novelty will wear thin. Those who say “it can’t be that bad” will realize that it is that bad, and they, too, will be one-and-done with Chipotle’s queso.
There’s always a chance that Chipotle quickly revamps its latest offering, as it knows there’s too much riding on this to get it wrong with the masses it needs to win back. There’s no point in sticking to something that’s not sticking, figuratively and literally. It’s still not too late for Chipotle to win back its reputation.
Featured Image: PicQuery
Inset Image: USAToday