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Bloomberg News
Sunday, February 04, 2018

Chipotle Mexican Grill Inc.’s plan to turn a traditional Mexican dessert into a growth driver has sputtered, leaving the beleaguered burrito chain seeking other new menu items.

The dessert known as bunuelos, a fried-tortilla dish topped with honey, sugar and cinnamon, was sold in the chain’s New York Next Kitchen — a testing ground for new fare — and it wasn’t a hit. The item is “on hold” for now, according to spokesman Chris Arnold.

“We didn’t love the bunuelos, but have other items moving into the Next Kitchen in the coming months, including other options for dessert,” he said in an email. The restaurant was created “to test things, so it will be very normal for things to move in and out,” he said.

The company has struggled to reignite growth after an E. coli crisis torpedoed sales in 2015. Food-safety fears have continued to dog the chain since, and a hacker attack last year further tarnished its image.

Founder Steve Ells announced plans to step down as chief executive officer in November, saying the company needed a new leader to oversee its turnaround. For most of its history, Chipotle had taken pride in its simple — and unchanging — menu. But its difficulties have made a shake-up more necessary.

The company also has been experimenting with frozen margaritas, a test that has spread to Austin, Texas. Investors likely will get an update on its efforts when Chipotle reports earnings this week.

Chipotle had a more optimistic attitude about bunuelos when it discussed them last year on a conference call with analysts.

“Bunuelos are simple to make using our existing equipment and require us to add just a few additional ingredients,” Ells said at the time. “They’re delicious and complement our menu nicely.”

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