Chipotle to launch spinoff Farmesa in ghost kitchen

Chipotle Mexican Grill is launching a new spinoff, called Farmesa Fresh Eatery, in a California ghost kitchen.

It’s the latest attempt by the burrito chain to branch out into new cuisines. Its past spinoffs — Asian ShopHouse and Tasty Made — occurred under founder Steve Ells’ leadership and were shut down by 2017. The company also invested in Pizzeria Locale.

Farmesa marks the first such experiment during CEO Brian Niccol’s tenure, and the company is taking a more measured approach this time around, leaning on its tried-and-true customizable bowls.

The brand will have a soft opening in late February with a limited menu and shorter hours before its official launch in March.

Farmesa’s bowls will feature a protein, green or grain, two sides, one of five sauces and a topping option. Prices will range from $11.95 to $16.95. The brand’s name is a portmanteau of “farm” and “mesa,” the Spanish word for table, in an attempt to communicate its farm-to-table approach.

The full menu, created by Farmesa’s director of culinary innovation, chef Nate Appleman, will include whipped potatoes, golden beets and everything spice-crusted Ora King salmon. Appleman, who won a James Beard award in 2009, previously helped Chipotle add to its sparse menu in the 2000s.

Chipotle isn’t planning on using its own branding much for Farmesa. Nate Lawton, Chipotle’s vice president of new ventures and the architect behind the spinoff, said the company will initially introduce it to customers as a new brand from Chipotle. And, “when the time is right,” Lawton said, Chipotle will use its loyalty program database to attract potential Farmesa customers.

Customers will be able to order Farmesa at the upcoming location at Kitchen United Mix on 3rd Street in Santa Monica, California, or for pickup or delivery through third-party delivery apps, like DoorDash and UberEats. When opened, the Santa Monica location will be Kitchen United’s 24th ghost kitchen.

Ghost kitchens, which are also known as cloud or dark kitchens, allow restaurants to prepare food solely for delivery. Startups like Kitchen United, which had raised $175 million as of late July, house multiple restaurant brands within one location and tout their models as more efficient since they lower labor and rent costs for eateries.

For Chipotle, Kitchen United’s model allows the restaurant chain to test out the new brand with reduced risk.

“We’ve really tried to build in a local, low-cost, flexible and fast way to learn, which I think was one of the key learnings we took away from our past work,” said Lawton, who joined Chipotle last year after two decades at Procter & Gamble.

Farmesa can easily tweak its menu based on customer feedback, and Kitchen United will handle expediting orders and dealing with customers, leaving the brand to focus on learning as much as it can. Lawton said the initial location is meant to understand what customers do and don’t want and the economics of the new brand.

And while Chipotle executives noted earlier this month that delivery sales fell 15% in the fourth quarter compared with the year-earlier period, Lawton said Santa Monica consumers order delivery nine times more often than the national average, another factor that made Kitchen United attractive for the company.

For now, Chipotle’s chief purpose with the location is simply to learn, but that doesn’t mean Farmesa won’t grow.

Lawton said there’s a “variety of ways” that the company could move forward with the new brand, although it plans to keep it separate from Chipotle restaurants.

“While one location does not beget a chain, we think the Farmesa Fresh Eatery brand does signal the company sees an opportunity to grow beyond its core concept utilizing many of attributes of the Chipotle brand (e.g., simple menu, ‘real’ ingredients, easy operations),” Citi Research analyst Jon Tower wrote in a Jan. 24 note to clients before Chipotle officially announced Farmesa’s launch.