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Investors can't seem to tire of searching for the nextChipotle Mexican Grill . The fast-casual darling has rewritten the playbook when it comes to succeeding in the sometimes cruel realm of restaurants, and it's been as satisfyingly filling to its shareholders as it's been to its loyal customers who have no problem popping into the back of a fast-moving line for a carnitas bowl or barbacoa burrito.
As opportunistic investors have been trying to unearth the next Chipotle, it seems as if Chipotle itself has lived up to that billing. The stock has doubled during the past two years, soaring sixfold during the past five years.
However, what if there were another burrito roller -- one that you probably wouldn't expect -- that was getting ready to make some serious waves in the coming months. What if this "next Chipotle" candidate just happened to be part of a publicly traded company, giving mainstream investors like you and me a chance to hop aboard?
I'll get there, but first let's go over a few of the neat things going on at this forward-thinking chain.
It's a long road to be the next Chipotle
The chain that I'm holding up as the next game changer in the quick-service arena is already considering taking some pages out of the Chipotle playbook. It realizes that Chipotle's "food with integrity" mantra translates into strong sales, so it's also exploring the high road as it investigates packaging that's more environmentally friendly. Like other operators, it's also considering a switch to meat that is raised free of hormones and antibiotics.
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This chain also decided to open up shop outside of a retrofitted shipping container at last month's South by Southwest festival in Austin. The pop-up restaurant had rustic charm, and you know that you have to be cranking out some appealing Mexican staples if you want to stand out in the Tex Mex foodie haven of Austin. Building on its street cred, it even helped sponsor the popular music festival.
This is just the beginning. It's considering as many as 200 of these pop-up shipping-container stores, and it's been dabbling at making a big splash in urban markets with a much smaller-sized restaurant than its traditional locations, complete with an open kitchen. You don't try to stay on the cutting edge of the eatery scene unless you're nimble.
Another new outlet for this growing concept is catering. It's testing it out in Houston -- again, another place that takes its Mexican food seriously. You have to be known for tasty, crowd-pleasing grub if you want to make a dent in the catering market.
Some other neat wrinkles in this mystery operator's hit list include online ordering, and even a delivery service. If Jimmy John's and Burger King can do it, why not this quesadilla-pressing mogul?
The big reveal
There are a lot of moving parts to this chain's strategy, and the real surprise is that it's none other than Taco Bell. Yes, Taco Bell.
The Yum! Brands chain is an unlikely bar raiser. It's the place that folks associate with cheap sustenance. It's where a vice-riddled night of revelry pulls into the drive-thru window at 3 a.m. for one last round of fuel.
However, everything that was mentioned earlier is either true, or in the process of becoming true. Taco Bell has been backing the Feed the Beat music festival at SXSW for a couple of years. This year, it did up its presence with the food-truck-like charm of the pop-up restaurant.
Taco Bell got a new CEO in January, and in an interview earlier this year with trade periodical Nation's Restaurant News,Brian Niccol spelled out the company's ambitious plans for catering, delivery, online ordering, "food with integrity" initiatives, and cutting-edge outlets, including shipping containers and open kitchens.
It's all surprisingly happening at a chain with 6,199 locations, far more than the 1,783 units that Chipotle was manning when the year began. This doesn't mean that Yum! Brands will double during the next years, or be a six-bagger during the next five years. Taco Bell is pretty mature, and Yum! Brands also has to improve operations at the larger KFC and Pizza Hut.
However, if just a couple of the chain's many initiatives take off, it could lead to a dramatic spike in performance. Taco Bell may be an aging chain with an unfortunate reputation for ho-hum food, but it's going through a mid-life crisis worth watching.
The article The Next Chipotle Mexican Grill, Inc. Will Blow Your Mind originally appeared on Fool.com.
Rick Munarriz has no position in any stocks mentioned. The Motley Fool recommends Chipotle Mexican Grill. The Motley Fool owns shares of Chipotle Mexican Grill. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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