The latest investments are tied to Chipotle’s Environmental, Social and Governance, or ESG, goals./Photo courtesy of Chipotle.
Chipotle Mexican Grill on Wednesday announced two new investments through its $50 million venture fund, both designed to further the chain’s overarching goals for bettering the planet.
Through its Cultivate Next fund, launched last year, the company made an investment in Local Line, a Canada-based food sourcing e-commerce platform founded in 2015 for farmers, food hubs and others selling goods. The goal is to help them find buyers in their region who want to buy local.
Chipotle didn’t characterize the investment, but said it will help support expansion of Local Line across the U.S., which will help the 3,200-unit chain buy local food for its restaurants.
Buying local has been a longtime commitment for Chipotle. In 2023, for example, Chipotle has set the goal of purchasing at least 37.5 million pounds of local produce, an increase from 36.4 million pounds purchased last year.
In addition, the Cultivate Next fund also made an investment in Zero Acre Farms, a San Francisco Bay Area startup that makes “cultured oil” through fermentation.
Described as more healthful and sustainable, cultured oil is positioned as an alternative to vegetable oils, which some contend have negative health effects. The production of vegetable oils, like seed oils, palm and coconut oil, also can be bad for the environment.
Zero Acre Farms contends that seed oils can have high levels of toxicity when heated, for example. And palm and coconut oil production contributes to global deforestation and greenhouse gas emissions. Cultured oil, which is made by fermenting non-GMO sugars into oil, offers more heart-healthy fats, the company contends, as well as having a lighter environmental footprint and a high smoke point.
The company was founded by Jeff Nobbs, now Zero Acre’s CEO, who also co-founded the five-unit “clean-casual” restaurant concept Kitava, which has locations in San Francisco, Los Angeles and Houston.
The Cultivate Next investments are tied to Chipotle’s own environmental, social and governance, or ESG, goals, which the Newport Beach, Calif.-based chain has updated for 2023. The qualitative goals are tied to executive compensation.
In addition to the upgraded goals for using local produce, Chipotle this year pledged to improve retention of its diverse U.S.-based restaurant support center staff, as well as its field operations team.
Last year, the goal was to increase diversity among the internal pipeline of candidates for promotions into salaried positions in the support center and field management. And that effort paid off.
The diversity rate of those in the promotion pipeline reached 63.6%, exceeding the goal of 60%.
And that metric is key for fostering more diverse leadership overall. The company said 90% of all restaurant management roles were internal promotions, including 100% of regional vice presidents in the U.S., 81% of team directors and 74% of field leaders.
Chipotle also pledged to increase the number of restaurants that compost by at least 23% this year, which is part of a larger effort to reduce waste sent to landfills by at least 5% by 2025. As of January, about 1,000 locations participate in composting programs, and Chipotle said it reduced greenhouse gas emissions by 13% (compared with 2019), exceeding its goal of a 5% reduction.
The investments in Local Line and Zero Acres are not the first for the Cultivate Fund, which is designed to support early-stage companies that will help Chipotle grow.
Last year, the fund made investments in Hyphen, a foodservice tech platform that designs automated makelines, which Chipotle plans to test this year.
The fund also invested in Meati Foods, which makes plant-based proteins from mushroom roots. No word yet from Chipotle about the potential for the fungi-based meat alternative to make the chain’s menu.
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