Chipotle bets on Korea for first bite of Asia

Three decades after a single burrito shop in Denver opened on the idea that food has the power to change the world, Chipotle Mexican Grill will carry that ethos into its very first Asian store in Gangnam on Wednesday.

Chipotle said that Korea has the consumers and the partner it needs to anchor its expansion across Asia under its vision of "Food with Integrity," and Gangnam is a fitting foothold as a leading commercial district.

"This represents a very significant milestone in the growth strategy of our great companies," Chipotle CEO Scott Boatwright said during a media conference on the eve of the store opening. "Korea is really more than just our first market in Asia. It will help establish a standard in how we grow across the region."

The store operates under S&C Restaurants Holdings, a joint venture in which Big Bite Company, a Sangmidang Holdings affiliate that also runs Shake Shack and Jamba in Korea, holds 51 percent and Chipotle holds 49 percent. It is Chipotle's first foreign-market joint venture, giving S&C exclusive rights to run the brand in Korea and Singapore.

Boatwright framed the partnership as a match between what Korean consumers want and what Chipotle can deliver.

"We know that this is a very sophisticated market, a very dynamic consumer, consumers who care deeply about what they put in their bodies," he said. "They want to understand the quality of the ingredients, where those ingredients are sourced, how those ingredients are prepared."

The new restaurant serves food assembly-line style, where customers move down a counter, pick a base of burrito, bowl, taco, salad or quesadilla, then build it out themselves with a protein, plus rice, beans and toppings such as salsa, cheese, sour cream and guacamole.

The menu, preparation and ordering process match the US operation exactly, with ingredients prepared and menu items assembled fresh each morning at every location.

According to Hur Hee-soo, chief visionary officer of Sangmidang Holdings, a healthy, satisfying meal in Korea usually means "a high price, a long wait or a special occasion."

Chipotle's customizable ordering model fills that gap, he said, through a flat-price principle. There's no price difference by menu format and no upcharge for extra toppings.

"Making the customization experience part of everyday life, that's the core of what we want to bring to the Korean market with Chipotle," he said. "What took up most of our time wasn't store design or interiors. It was building our ingredient supply chain."

In terms of expansion, the venture plans to move at a measured pace.

"Providing the same quality and experience at every location matters more to us than growing the store count quickly," Hur said. S&C intends to add a second and third Seoul outlet, both directly operated, by the end of the year, then a Singapore location in the first half of next year.