Esquire's Most Inspiring CEO in America: Steve Ells, Founder and Co-CEO, Chipotle

By A.J. Jacobs

Headquarters: Denver

No. of Employees: 35,000

Sales: $2.3 billion (2011)

Market Capitalization: $9.2 billion

First Exposure to Work: Mowing lawns

Size of Office: 100 sq ft

"I am not a vegetarian, but I am a meat reducer. I think it's better for your health and certainly much better for the planet."

These sentences were spoken by: a) my hippie aunt in Vermont who loves tending to her large radish garden; b) a Berkeley grad student doing a thesis on the oeuvre of Michael Pollan; c) the owner of a fast-food chain that sells 120 million pounds of meat per year.

This answer is c. The speaker is Steve Ells, the 48-year-old founder of Chipotle Mexican Grill.

Ells is an unusual executive. He's a classically trained chef who runs a chain of more than 1,300 restaurants. He's a man obsessed with innovation who has not changed his restaurants' menu in 19 years. He's the co-CEO of a publicly traded company who tells his employees things like this: "If it's the right thing to do, let's do it. Don't worry about the costs. We'll figure that out later." He's like a weird hybrid of Alice Waters and Ray Kroc, trying to bring unprocessed food to the masses. He's a man of contradictions. A ridiculously successful man of contradictions.

On a blazing-hot summer Thursday in New York, Ells takes me to one of those 1,300 restaurants, this one on 18th Street. He wears Converse sneakers, shorts, and Wes Anderson glasses, looking more Web designer than CEO. When we enter, Ells squats down to the floor to pick up a stray napkin and toss it in the trash. A good work ethic, this guy.

We wait in line — sadly, no fast pass for us. At least it gives Ells a chance to explain the philosophy of the line, which is surprisingly well-thought-out.

"In the old design, we had half-height walls, these fences that led people in certain paths so they knew where to queue up," he says. "We got rid of that. The new design is much more intuitive and respectful to the customer. They aren't corralled." I had read that Chipotle buys mostly pasture-raised meat, but apparently even the customers are free-range.

"Hi Steve!" chirps a female Chipotle employee on the burrito assembly line when we arrive at the front. Ells, in his deep voice — deeper than you'd expect from a thin man with a boyish face — asks for a burrito bowl with "a very small amount of carnitas," Chipotle's signature pork, rubbed with black pepper and juniper and braised for about six hours. The guy behind the counter loads up his tongs and drops some pork into the bowl.

"Too much," says Ells.

The guy takes off half of the meat. Ells nods. We sit down to eat our meat-reduced burrito bowls, but Ells is having trouble concentrating on my questions. "I'm always distracted when I eat at Chipotle," he says. "Because I'm always looking at other people eating. Look at that woman." He gestures to a girl in jeans who is eating her burrito as daintily as one can eat a burrito. "She looks happy, doesn't she? They look different than customers at McDonald's."

When I finally get his attention, I get Ells to tell me about the two key moments in the Chipotle story: the Creation and the Conversion.

First, the Creation: In 1993, Ells had recently graduated from the Culinary Institute of America and was hoping to open a high-end tablecloth-and-reservations-type restaurant. But he needed money. He lived in San Francisco at the time and was having lunch one day at a taqueria in the Mission District, mulling it over. Then he had one of those lightbulb moments that self-made CEOs tend to have had. He loved the food at this little taqueria, and he loved the efficiency of its operation. "I remember jotting down on a napkin how many people were on line and how long it took each to go through. Multiply that by menu price. Subtract the costs. And I had my little economic model."

He borrowed $85,000 from his dad, an engineer, and opened a place called Chipotle in a former ice cream store in Denver, where he'd attended college. The idea was to make enough money selling burritos to open an actual restaurant.

The decor was simple because he bought most of it at a hardware store: plywood, barn metal, industrial fixtures. The menu was just as simple: beans, lime-cilantro rice, salsa, guacamole, and chicken, pork, or beef folded into a tortilla the size of a beach towel. Despite skepticism from some snooty foodie friends, Chipotle worked. Lines out the door.

Part of the appeal, Ells believes, was his notion of food as theater. Even fast food, he felt, could be about a human experience. "Think about the typical fast-food place," he says. "You order by number. Then the employee turns their back on the customer and gets some rethermalized, highly processed food." In his restaurant, Ells wanted lots of eye contact and the meals made right there, with real ingredients, while hungry customers watched.

"You say, 'Can I have some of that guac or salsa,' and the person serving you the guac says, 'Yeah, and I made it myself.' They don't say it each time, of course. But there's an interaction.

He opened a second Chipotle in Denver. After five years, he had 16 throughout Colorado and got a new investor — McDonald's — which helped it grow to 500 stores before the two ended the partnership (amicably, they both claim) in 2006. Currently, Chipotle opens three new restaurants a week, with total revenues of $2.3 billion a year.

The success story isn't pristine. In July, Chipotle's stock stumbled because the company missed sales estimates, dropping an alarming 22 percent in a day and eliciting its first snide coverage from financial columnists. (One said the chain should serve Pepto-Bismol to investors along with burritos.) But still, the overall trend has been upward — the stock has climbed from $22 in 2006 (when it had its IPO) to $297 at press time.

And what of that high-end restaurant he once dreamed of opening? "Haven't you been listening?" asks Ells. "I'm opening three high-end restaurants a week."

The second and more unexpected moment — the Conversion — occurred in 1999. Ells, who had always been curious about the origins of his ingredients, visited a factory farm in Iowa to see where his growing chain was getting its pork. "It was a very difficult experience," he says. "Being there and hearing the animals, and looking into their eyes and knowing they were suffering."

It was then that Ells decided he'd try to wean Chipotle from factory farms.

"He came back and said, 'I can't give any more money to those people,' " remembers Gretchen Selfridge, a district manager who has worked for Chipotle since its second restaurant. "We all said, 'Oh my god, Steve. That's going to be so expensive. We can't do that.' And he said, 'I don't care. It's the right thing to do.' He was willing to lose money right away."

Most Chipotle meat is now from smaller farms with more open space for the animals. The restaurant's chickens are free of antibiotics, and its dairy is from cows given no hormones. As for produce, 40 percent of the beans are organic, and the company buys 10 million pounds of vegetables from local farms every year. And here's the thing: The company didn't lose money. It did have to raise the price of its carnitas burritos, but, Ells says, it saw a boost in sales. "It tastes better, plus there's a good story behind it that people

want to be a part of."

Ells says he wants to strip the elitist overtones from sustainable food. There's a sketch he loves on Portlandia, the satirical show that pokes fun at hipster culture: A couple visits a high-end Oregon restaurant. The waitress tells them a little about their chicken: "It's a heritage breed, woodland raised, fed a diet of sheep's milk, soy, and hazelnut." She gives the couple a folder with a photo of the bird frolicking in the field and says, "And here's the chicken you'll be eating tonight. His name was Colin."

Nothing wrong with some fancy restaurants serving up Colin and his friends, but it's not going to have a big impact on mainstream food culture. Likewise, says Ells, "It would be wonderful if everyone took time during their lunch break to go to the farmer's market to buy organic vegetables, took them home, and sat down with friends and celebrated the dining experience. But it's not realistic with our hyperproductive lifestyle. So Chipotle is a really good solution."

How to get that message out, especially when many people still vaguely thought Chipotle was owned by McDonald's? Last year, Ells and his co-CEO, Monty Moran, a former lawyer and childhood friend, commissioned a two-minute short film — to call it a commercial would undersell it — which Chipotle aired during the Grammy Awards. Called Back to the Start, it's a morality tale about a farmer who kicks his addiction to Big Pharma-farming. There is no speaking, and the word chipotle appears only at the very end, in a subtle way — on the side of a small delivery truck. For the soundtrack, they hired Willie Nelson to record a powerful cover of "The Scientist," by Coldplay. ("Nobody said it was easy / No one ever said it would be so hard / I'm going back to the start.") The spot not only informed people of Chipotle's commitment to small farmers, but because it wasn't heavily branded it also aspired to be a sort of rallying cry to the industry.

Oddly, the man so bent on changing food culture has kept the menu almost identical to that first Chipotle in Denver. "We innovate by constantly improving the raw ingredients," he explains. Consider onions. Selfridge remembers when the chain went from hand-cutting onions to an onion-cutting machine, of which they bought a couple hundred for Chipotles around the country. Then Ells came in one day and said, "We need to go back to hand-cutting the onions."

Selfridge was stunned. She asked him, "Do you know how time-consuming that will be?"

"He said, 'I don't care. It tastes better.' "

As Selfridge once explained to a trade publication, "He can be a little bit temperamental because he is a chef, and chefs are made that way. But I think that's made us all better."

Ells has brought in other presumably temperamental chefs, as well. In 2010, he and Moran surprised the foodie world by convincing Nate Appleman, a popular, James Beard Award–winning chef at the celebrated A16 restaurant in San Francisco and then Pulino's in New York, to take over a Chipotle in Manhattan. Appleman turned the store into a test kitchen where he messes around with new ideas, like chorizo tacos.

Ells and Moran hope to bring their sustainable-fast-food idea to other cuisines. Last year, they opened a restaurant called Shop-House in Washington, D. C., which is applying the Chipotle formula to Southeast Asian food. "It's far too early to tell if it's the next Chipotle, but I'm proud of it," Ells says.

At the end of lunch, he clears the table, tossing our water cups and his empty bowl, and thanks the kitchen crew, who respond, "Thanks Steve!" He's a bit relieved the interview is over. He claims he doesn't like talking about himself. He's not so sure about this "Most Inspiring CEO" honor.

"You keep telling me I'm inspiring," he says. "I'm not sure how inspiring I am."

I argue that if nothing else, he's an inspiration to liberal-arts majors with no business experience who might be wondering whether they could invent an empire.