Sustainability: Where Consumers’ Minds are Shifting Towards

I recently attended Deloitte’s 2012 Technology Media Telecom predictions. Making global predictions is an awfully difficult exercise to undertake and very few organisations have much success consistently. I enjoy attending this annual event because Deloitte’s track record is remarkably quite accurate and Duncan Stewart, the Director of Deloitte Canada Research, is a great communicator. Readers that are interested in learning more about Deloitte’s 2012 Technology Media Telecom predictions can find the detailed report here.

One of Deloitte’s projections for the year is that online brand advertising will boom. Interestingly, only 25% of online marketing expenditures are intended for brand building purposes and 75% are targeted to direct-response. Outside the Internet, the proportions are totally the opposite. While the impact of direct-response advertising is easily measurable and immediate, the impact of brand building advertising is generally perceived as being much more subjective and felt over the long term.

To illustrate their prediction and how effective brand building advertising can be, Deloitte showed the short film entitled, “Back to the Start.” It is a two-and-a-half minute ad embracing sustainable farming by Chipotle (you will only notice their logo at the very end). It has been a huge success for the restaurant chain. The online ad has paid off handsomely for Chipotle without a substantial investment by going viral – it has aired in 10,000 movie theatres throughout the U.S. and has over 4 million hits on YouTube. The ad spot will air for the first time during the Grammys and will represent Chipotle’s first-ever national TV ad spot.

I am not a marketing specialist and I do not usually write about advertisements, but I really enjoyed this one and wanted to share it for several reasons.

1)      Powerful message.

  1. The story captures magnificently well the spirit of our times. Consumers’ desire for authentic products supplied by companies adopting sustainable business practices has never been greater. This is why people willingly shared the ad with friends and family (4 million times and counting!).

2)     Effective delivery.

  1. The animated ad is well conceived, communicates effectively the message, and has a good soundtrack. You will notice Coldplay‘s classic ‘The Scientist‘ performed by country music legend Willie Nelson.

The ad will certainly propel Chipotle to even greater heights. I have loved Chipotle since I discovered it in San Francisco last year. Tasty, nutritious food + value pricing = winning combination. Yet, I knew nothing about the company’s story and its values. The company claims to be the only fast food chain to use organic, locally grown ingredients. Chipotle’s growth and profitability demonstrate that sustainability pays and that it can be a scalable business model. I am looking forward to the first Chipotle near me in Canada!

I am coming back from a cruise where eating too much and ample free time at sea led me to do a detailed fitness assessment for the first time. Since I exercise regularly and eat relatively well (no coffee, soda or junk food and regular portions), I thought that the results would be rather favourable. However, I was quite surprised by the result of the body composition test that revealed a relatively high amount of toxins in my system.

I am now much more conscious of the negative impact of big commercial food production on my health. Food made with natural ingredients, from sustainable sources, and free of antibiotics is now the way to go for me. Hopefully more food producers will emulate Chipotle and make organic foods more readily accessible for consumers, because it is not so easy at the moment to eat consistently that healthy.

Back to the Start: The commercial

Chipotle Story – How it All Started

It is an inspiring entrepreneurial success story. Chipotle shows how it is still possible to build a business even in a mature, traditional industry. Creativity, differentiation and strong execution have taken Chipotle far since its humble beginnings in 1993. At the end of the day, as I mentioned in What Stellar Entrepreneurs Focus on to Identify New Ideas for Successful Ventures (Part I), passion and focus on creating better products is truly the foundation for building the best businesses.

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About Ludovic Dumas

Ludovic transforms innovative companies into world-class organizations. He is an investment professional at an investment firm representing the interests of one of the most successful families in Canadian business. Before joining the private equity world, Ludovic was an investment banker at CIBC and with ING Group’s investment banking team in Frankfurt, Germany. Mr. Dumas was also a management consultant with Deloitte where he worked on corporate strategy, restructuring, market analysis, due diligence, and economic development mandates. Specialties Mergers & acquisitions, capital raise, corporate strategy, entrepreneurship.
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