Chipotle is entering the land of the taco. Will Mexicans bite?

Chipotle's Mexico director Pablo de Brito told Reuters that the company was planning to open six to eight new stores in Monterrey within the next 14 months, after which it would expand to Mexico City, then the rest of the country. "We're more than happy with this opening," he said, noting that Chipotle chose Monterrey for the chain's debut in part because the city provided a young demographic with a close relationship to U.S. culture and familiarity with the brand. Chipotle's entry into Mexico follows two unsuccessful forays by fast-food chain Taco Bell, whose efforts to enter the market in 1992 and 2007 were rebuffed as locals snubbed their offerings in favor of authentic Mexican products. Mexico's INEGI statistics office counts over 147,000 registered taquerias across the country, but the vast majority of sellers are informal street stands selling various types of meat-based tacos with assorted toppings and spicy salsas. A geographer at Mexico's National Autonomous University, Baruch Sangines, in 2021 created a map of 1.6 million taco shops, calculating that 95% of Mexico City inhabitants lived within 400 meters (a five-minute walk) of a taqueria. In Monterrey, which has more than 5 million residents in its metropolitan area, the number fell to a still-plentiful 75%. For Sara Senatore, senior restaurants analyst at Bank of America, Chipotle's partnership with Alsea ALSEA.MX - which franchises Starbucks SBUX.O and Domino's Pizza DPZ.O across Latin America and Europe - is a sign the brand has good prospects in Mexico. "They're the ones building the restaurants and they bear a lot of the risk," she said, noting that Alsea's commitment suggests the brand is considered viable and that a certain cultural "mystique" often helps U.S. brands fare well abroad. Chipotle's menu, ranging from mild carnitas to a "pretty darn hot" salsa, should help appeal to a range of palates, Senatore added. Spice is a sensitive topic in Mexico, where a number of sauces have become milder due to gentrification, a trend that surged during the COVID-19 pandemic when many U.S. citizens came to Mexico on remote contracts, outspending local residents. With balloons, confetti and optimism, U.S.-based Cal-Mex food chain Chipotle CMG.N on Thursday opened its first restaurant in the country, bringing its chicken salads and burrito bowls to the homeland of tacos. Chipotle's inaugural restaurant opened in Monterrey's upscale suburb of San Pedro Garza Garcia, a corporate hub known as the wealthiest municipality in Latin America, located in Mexico's northern border state of Nuevo Leon. A large chili-themed veil was dropped to a burst of confetti, after which crowds of residents queued for a taste of the Californian chain, many taking photos as workers prepared wraps and salads behind a busy bar.

Chipotle is entering the land of the taco. Will Mexicans bite?

Expansion plans beyond Monterrey

Chipotle faces a taco-heavy market

Analysts point to Alsea partnership and menu fit

Chipotle opens first Mexico restaurant in Monterrey

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