Chipotle's new secret weapon could make its CEO's quesadilla dreams a reality

However, BTIG analyst Peter Saleh said he believes Niccol's dreams of a Chipotle quesadilla may become a reality as Chipotle doubles down on its second, digital makeline.
Now that all Chipotle locations have a digital make line, Chipotle has the ability to roll out menu items that take a little longer to make, Saleh says.
Currently, more than 18% of Chipotle's business comes from digital sales. Chipotle's chief financial officer, Jack Hartung, expects that figure to more than double, reaching 40% or even 50%.
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Brian Niccol dreams of quesadillas.

The CEO of Chipotle has name-dropped the cheesy offering not currently on the chain's menu in more than one interview with Business Insider since he started at the company in March 2018. In January, he said that the quesadilla was Chipotle customers' top-requested menu item. And, Niccol has been craving it himself.

"The quesadilla is really good, because there's nothing better than a really hot tortilla," Niccol told Business Insider in an interview in November, when asked about his go-to Chipotle orders.

"Our tortillas are fabulous," Niccol continued. "They're really hot and you put our chicken or barbacoa in there with some cheese and then ... you can dip it in some guac. It's just really, really good."

Chipotle Quesadilla Hollis Johnson/Business Insider

Chipotle has not added its quesadilla to the official menu because the process of heating up a quesadilla would slow down the chain's rapid burrito and burrito bowl assembly line. However, BTIG analyst Peter Saleh said that this might change as Chipotle doubles down on its second, digital make line.

"The faster the digital mix grows, the more, I think, innovation they may be able to pull out on the second make line," Saleh said. "Aside from maybe a side item like a queso blanco or something like that, I would think the next major entre innovation is going to be something around along the lines of the quesadilla."

Saleh said that, while Chipotle should have a quesadilla on the menu, the chain does not need to roll it out immediately as there are other things driving sales at the moment. However, he predicts it could likely be a 2020 or 2021 initiative for the chain as the digital make line allows for more flexibility.

Chipotle rolled out its first digital-only menu items in January, with a line of Lifestyle Bowls. These bowls only featured ingredients that were already available, but they were a massive success for the chain. Niccol said in January that they helped reintroduce customers to options that already existed on the menu.

With Chipotle completing the digitization of its second make line earlier this year, the chain is increasingly looking at the secondary burrito assembly line as a restaurant within a restaurant. It is a weapon that none of Chipotle's rivals possess, with the potential to double the chain's maximum output.

"No one else has a dedicated digital restaurant within every restaurant," Chipotle's chief technology officer Curt Garner said.

This "second restaurant" could potentially mean more flexibility around what is on Chipotle's menu, or the creation of an entirely new digital-only menu. With customers ordering ahead instead of standing in front of employees to order, Chipotle can afford to add menu items that take a few more seconds to make.

"As they push more and more digital," Saleh said, "now they're getting up to 20%, as they get the 30%, maybe 40%, they can start to introduce some items, at least on the digital side, that might require little bit more time to make."

Currently, more than 18% of Chipotle's business comes from digital sales. Chipotle's chief financial officer, Jack Hartung, expects that to more than double.

"We have restaurants that are as high as 40%," Hartung said, noting that even these are not fully maxing out what is possible. "I don't see why our whole company can't get up into that 30%, 40%, 50%."

For now, however, Niccol will have to stick with his current go-to order.

"I always do like white rice, barbacoa, and fajita of veggies," Niccol said. "And our spicy salsa."