A (3:24)

Steve, you've been on the show twice. The first time way back in 2017 when you told us, of course, the origin story of Chipotle, how you were working in a high end restaurant in San Francisco and basically you had this idea to sell burritos in order to save the money so you could start your own fine dining restaurant, which was your dream. But of course, that's not what happened. That burrito place turned into Chipotle. It was started in Denver and today, of course, it is a massive global restaurant brand at a publicly traded company. As always, anyone listening who hasn't heard that original How I built this episode about launching Chipotle, it's really fascinating. Go check it out. We'll put a link to it in the podcast description. Steve also came back on the show in 2023 to talk about a new concept that you were about to launch in New York City. It's called Kernel. Steve, just to summarize, basically the idea behind it was an entirely plant based menu. And then basically all of the ordering was done via an app and the meals were assembled by robots and there were still human employees, but far fewer. But as far as I understand with Kernel, after about a year, I guess it just didn't work. Can you tell me what happened and some of the things you learned from that?

B (4:38)

Sure. I think that's a very good summary, Guy, but I wouldn't say that it didn't work with Kernel. I would say, though, that Kernel didn't appear to be the rocket ship that Chipotle was and I wanted another rocket ship. And so we, we closed down the two Colonel restaurants after less than a year, spent a couple of months, you know, retooling and opened counter service. And, and I'll tell you, the reception has been wonderful.

A (5:08)

It's a sandwich restaurant, right?

B (5:10)

It is. If you think about the tens of thousands of chain sandwich places in the United States, there are varying qualities of these places. If you compare that with what we do at counter service, we're vastly different. The bread is only four ingredients, flour, water, yeast, and salt. And we bake the bread every day. Actually, we don't bake it we have these amazing artisans bake the bread for us every day. We roast all of our own meats, we're making all of our own sauces, we're chopping fresh herbs, we're squeezing fresh citrus. And there's this demonstrable difference between the world of chain sandwiches and what we do at counter service. Much like back in 1993, there was a big difference between the world of fast food and then what we started to offer at Chipotle.

A (6:02)

Yeah, I mean, your whole model was about standards, right. It was like, we're going to make the guacamole in every location. We're going to marinate the meat, we're going to grill it, we're going to chop the pico de gallo. And as you scaled, people said, hey, this can't be done. You can't scale this. Yeah, I'm curious. With Kernel, one of the innovations was to use robots, automated food prep. And some pretty big players are working on basically creating kitchens where a lot of the food is made by robots. How do you assess? I mean, you must have learned a lot about that process with Kernel. Are you bullish on it? I mean, is that where things will are ultimately going to be headed towards not everything made by robots, but a lot of things made by automated machines.

B (6:56)

So, you know, the robot arm did really two things. It picked from a rack the item that was being ordered and put it in the oven. And then when it was done, it took that item out of the oven. So it was part of automating the process to help reduce the amount of labor. But it really wasn't about the making of the food. You know, still in our central kitchen, we have knives and cutting boards and pots and pans, and we're really cooking. And so your question, will robots displace that? I mean, maybe someday, but certainly not anywhere in the near future. I think what we. We learned that it's polarizing. I mean, some people were fascinated with the robot arm. Other people said they want people making their food at the end of the day. In pivoting from kernel to counter service, we learned that the human interaction is very, very important. And when a customer walks into a counter service, they're greeted. There are people there who welcome the customer, who take care of the customer. Now there are less people in a counter service than a traditional fast casual. And that's by design. And so, you know, the system to make these sandwiches has automation in it. It allows us to, you know, more efficiently manage the workflow. And ultimately it'll allow for A better economic model which allows us to invest in higher quality ingredients and, and really make better food foundationally. It's very similar to Chipotle. And so I just, I want to do that again.

A (8:42)

Yeah, awesome. It's exciting. Steve, what do you say, should we bring in our first caller?

B (8:47)

I'd love to.

A (8:48)

All right, great. Welcome to the advice line, caller. Please tell us your name, where you're calling from and just a little bit about your business.

C (8:55)

Hi, Guy and Steve. My name's Rebecca Smith and I'm calling from Streaky Bay in South Australia. My partner Tony and I established Streaky bay distillers in 2022 and we make small batch gin, vodka and whisky in our tiny distillery in our tiny town in a wild, remote part of South Australia.

A (9:15)

Wow. Welcome to the show, Rebecca. You may be the farthest taller ever. I'm looking at Streaky Bay. It's like, you know, cause people think about like most Australians, I think, live on that, the eastern side, right. Melbourne, city, Brisbane, and there's Adelaide. And then you're like, you're like way out there. I mean, Streaky Bay is, it's a tiny place. Yeah. Okay, so you have a distillery and you make, tell me what you make there.

C (9:42)

We make small batch gin, we make some vodka and we are just about to release our first small batch whisky.

A (9:49)

And are you mainly selling it in the Streaky Bay area to like restaurants and bars and stuff?

C (9:56)

Yeah, exactly. So we sell it to three sort of high end accommodation providers who serve it either in their rooms or over the bar, several sort of bars and restaurants and then some South Australian independent bottle shops and a couple of gifting businesses.

A (10:15)

Interesting. Tell me, how did you get into this business? I mean, is this something you've been doing your whole career in life?

C (10:23)

Absolutely not. So I was a remote area midwife and a remote area nurse for most of my career. And yeah, we had a family tragedy, the death of my younger sister. And so we were looking for artistic ways to process our grief and we sort of stumbled to a course in distilling and then once we've done the course, we just absolutely fell in love with all aspects of it.

A (10:47)

Yeah. All right, and tell me about. So where are you selling most of your inventory?

C (10:53)

So we sell about 14% online through our website and that is probably the most margin. And then we also have a mobile food and cocktail van and that's probably about 28% of our income. And then our wholesale is 57%.

A (11:11)

Got it. Okay. And tell me a little bit about how the business is doing? What are your sales?

C (11:16)

Okay, so the turnover for this financial year, we're expecting to be about US$400,000, and last year it was around 200,000.

A (11:28)

Okay, pretty great. All right, before we get to Steve, tell us your question.

C (11:33)

Okay, so my question is, since our inception in 2022, there's been an explosion of small family distilleries around Australia. There's at least in the craft spirit sector. So in this kind of climate, how do we differentiate ourselves and find a point of difference that will resonate with our buyers and be authentic and meaningful to our customers?

A (11:58)

Okay, I want to bring Steve in. Steve, thoughts, questions, ideas, et cetera for Rebecca.

D (12:06)

Yeah.

B (12:07)

Yeah. Well, certainly in a crowded market, you do want to let folks know how you are differentiated. I guess that would be my question. How are you differentiated?

C (12:17)

Yeah, we've been sort of trying to differentiate ourselves in the connection to place. So we live in a really small community, and we swap our gin for local ingredients. So we collect up mulberries, figs, citrus. We're kind of like the bowerbirds of the distilling industry, and we use some Australian ingredients. You know, quandong abalone shell, coastal daisy, coastal rosemary. And the other way that I guess we do differentiate is we donate for one of our. One of our gins, we donate $5 a bottle to motor neurone disease because of a family experience. And I got a real interest in art, so I do all of the lino printing for the labels.

A (13:06)

Steve, I don't know if you could see their website. These are beautiful bottles. I mean, I love the. The shape of the bottle that you've chosen and the design and you see through it. It's really nice.

C (13:16)

Thank God.

A (13:17)

And you've got sort of a backdrop that gives it a beautiful color. Really, really nicely done.

C (13:23)

Thank you very much.

E (13:25)

Nice.

B (13:26)

So it sounds like these botanicals that are from this particular place, these are for the gin, correct?

C (13:35)

Correct.

B (13:35)

Yeah. It sounds like that's the differentiated product that you have. It's the gin. Or would you say that the vodka is also equally as differentiated?

C (13:44)

No, I agree with you. I think the gins are much more differentiated. I think there's lots of those. Other distilleries are also making really good vodkas and really good gins as well. But, yeah, some of the products that we use only. As far as I'm aware, only we are using.

B (14:03)

It seems to me that a company that focuses that's best in the world at something and maybe. Maybe you're best in the world at having these particular botanicals, and you forage for them, you pick them. It's a community effort, whatever. There's a very nice story to that. And I think a brand that focuses on what they're best in the world at and has a product line that's cohesive might somehow resonate or be more impactful with customers than having, well, we have some botanicals, and then we also have a vodka, and we also have a whiskey, too. Just from a branding standpoint, maybe that makes some sense, actually.

C (14:45)

It really does, yeah. We had started to wonder whether we were going a little bit off of our original brand.

B (14:53)

Rebecca. In the early days of Chipotle, when I presented the offerings, people said, well, Stevie, you just. You're not offering enough to people. They want more variety. And I said, no, no, no. People can make all different kinds of combinations of the base ingredients. But it was very, very different from the typical fast food approach, was to have limited offerings and all different kinds of things. And so. But it allowed us to focus on just a couple of things and do them better than anybody else. And I see a parallel between your gin making your botanicals and foraging for those ingredients. And I really like that. That resonates with me 100%.

A (15:29)

I think about some of these single malts from Scotland, very remote places. Right. Like Laphroaig. It's somewhere that you can't get to easily, but it's a massive international brand because the place became part of that brand, that story. And your place is Streaky Bay, Right. It's the taste of that abalone shell or the. Whatever salt. What is saltbush? Is it a bush that tastes like salt?

C (15:56)

It's a really prolific bush that grows everywhere in arid climates around Australia. And it's a salty taste, but you can actually cook it. And it was eaten, you know, by traditional Aboriginal people that lived here before.

A (16:13)

I love that. I mean, just the way you're talking about these. These things, like, I mean, literally, could you put a story on the bottle? Could you put a little booklet and just attach it to the neck of the bottle where you read that, you know, you find out what you're doing, what you're tasting. You're tasting the coastline of southern Australia. That's where you get that sense of place.

B (16:37)

And then. And then the handcrafting and the foraging really is.

D (16:41)

Yes.

B (16:41)

Do you import to the United States?

C (16:44)

No, we haven't looked at any kind of.

B (16:47)

Is it. Is it possible. Is that. Is that something that's easily done, or is this. Is this do you think going to be a product for Australia would absolutely

C (16:57)

love to do it? I think it's a very complex thing to do, but, you know, it's achievable. Anything's achievable.

B (17:03)

Well, I just wonder if it's easier to break away from the pack if you came to the United States. I think about a lot of bars and the bartenders doing craft cocktails and then trying to have ingredients that really stand apart from the others. And I can see this gaining traction, and it might be worth exploring the expense and the headache of trying to break into the United States.

A (17:29)

Yeah. Here's my suggestion, Rebecca. I'm sure there are Australian bars in Los Angeles and New York City. Right. Where most Australians probably live, I would think. I just went to a tequila bar in San Francisco. Every bottle is small, artisanal, Mexican brand. They had brands you've never heard of, beautiful bottles. And I wonder whether it'd be worth just going with a suitcase of this stuff to LA and, you know, connecting with some of these bars where Australians hang out. I'm sure there have got to be Australian bars. Like, there are Irish bars and see if they would. You start there just carrying them.

C (18:08)

That's a fantastic idea.

B (18:09)

It at least sounds like a lot of fun. You can go wrong and you got

A (18:15)

a story about Streaky Bay. Now I want to go to Streaky Bay. It looks awesome.

C (18:18)

Yeah. It's very remote and it's very rugged and. But we have empty beaches and it's a really beautiful place.

A (18:26)

Yeah.

B (18:27)

Rebecca, congratulations. What a. What a fantastic brand you have.

C (18:31)

Thank you so much, Steve.

A (18:32)

Rebecca Smith. The brand is Streaky Bay Distillers. Thank you so much for calling in.

C (18:37)

Thanks, guy.

A (18:39)

You know, the thing about things like gin or even tequila, you could say whiskey, too. There is. I mean, what she's doing, there's that element of tasting notes and flavor profiles and things that make it really interesting. It's not just a gin. It is a abalone shell gin. Right. Like that. You know, gin and tonic is great, but an abalone shell gin and tonic sounds even more interesting.

B (19:04)

Yeah. Well. And so as she started, as I heard about the pitch, I was thinking, like, oh, not another spirit. Right. It's like. But her story is so authentic and that she is highly differentiated in the ingredients of this place. You know, a product that speaks to a place is very powerful. And then when you combine that with the hand foraging, I just, I really think it's cool. And then the packaging is cool and it's so anti corporate Also, I think it'll resonate with folks.

A (19:40)

All right, we're going to take a quick break, but we'll be right back with another collar and another round of advice. Stay with us. I'm Guy Raz and you're listening to the advice line right here on how I built this lab. About a year ago, I got these really cool hooded sweatshirts for everyone on how I built this team. And I got them custom embroidered with the show's logo. Whenever I wear it, people are constantly asking, where can I buy that? And well, sorry, you can't get them because I had them custom made. But if you want something just as cool for your team, vistaprint offers everything you need to confidently and effortlessly create branded apparel. Choose from a range of options that fit your style, business and budget because your team deserves the best. Whether you're looking for branded merch for giveaways or for team uniforms, get the best apparel for your business at Vistaprint. You can also get lots of other custom products like drinkware, stickers, notebooks, pens, T shirts. So much more to help you market your business your way. Vistaprint print your possible. Right now, new customers get 20% off with code new20@vistaprint.com. Welcome back to the advice line on how I built this lab. I'm Guy Raz and my guest today is Steve Ells, founder of Chipotle, and we're taking your calls. And Steve, you ready for another call?

B (21:15)

Let's go.

A (21:16)

All right, let's bring in our next caller. Welcome to the advice line. Tell us your name, where you're calling from, and a little bit about your business or your product.

D (21:23)

Hi, I'm Sree Holema, the founder and CEO of MatZero. I'm calling from London. We make low voltage and safe heating mats that warm the person and not the space. A simple yet radical idea to save energy, cut emissions, and bring warmth to where it's needed the most.

A (21:42)

Awesome. Well, thank you for calling in. So, okay, Mat Zero, this is a. Tell me what this is. Describe what we're talking about here.

D (21:49)

Essentially, it's a heated mat, something that you sit on, lie on, sleep on, and it heats up you directly. Our mats are powered by USB C. It can be powered either by battery mains or solar if you're completely off grid.

A (22:04)

And it's the size of a yoga mat, something like that.

D (22:06)

We actually have three different sizes, so our largest, one flagship product is like a yoga mat size, but we have a mini as well, which is around sort of your seat size. I'm Sitting on one right now to stay warm.

A (22:18)

Got it. And I'm assuming this is for. It's just a more efficient way to stay warm when you're camping. Like what? Tell me what the. How did you come up with this idea? What's the story?

D (22:29)

Originally, I grew up internationally. I had parents in the humanitarian sector, and it's there where I really witnessed firsthand the disparity in energy access and saw how people struggled in the winter to stay warm. I moved to the UK to study product design and engineering, and that's where I designed this concept of electrical, safe electrical heating for those scenarios. I also really hated being cold and was totally not acclimatized to the UK weather.

A (22:58)

So the idea was and is if I'm reading the lines for disaster relief like you would, basically instead of handing out blankets or, you know, these would be available to people and they could efficiently heat themselves by lying on these mats.

D (23:14)

Exactly. So instead of using gas or burning whatever they can get their hands on, this is a safe way not only for the people, but for the planet too.

A (23:23)

So, sree, before we bring in Steve, tell us your question.

D (23:28)

So originally intended for the humanitarian sector, our products are showing real traction in the outdoor camping and consumer and even healthcare sectors. All of these make sense, but need focus, time and resource. So when your product genuinely fits multiple markets, how do you decide where to put your focus without losing momentum and drifting away from the reason you built this in the first place?

A (23:54)

And this is a for profit business, right? This is not a non for profit business.

D (23:59)

Yeah, no, we're for profit.

A (24:00)

Okay.

D (24:01)

And so I think this is part of the challenge here as well, is balancing the fact that we are commercially led but have a mission ultimately behind that vision as well. And getting that balance is a tricky one.

A (24:13)

How much does the mat cost?

D (24:15)

So our largest is 295 pounds and our smallest, the mini one, is 109 pounds.

B (24:23)

Okay.

A (24:23)

I think that's probably about $150 to 350, something like that. So they're not cheap, but they're not. But they're not out of range. All right, Steve, Els, want to bring you in here. SRI is making these mats, comes from a family of humanitarian aid workers, but there are different use cases here. And she's trying to figure out how to keep doing what she's doing without drifting from, I guess, from the mission in a sense.

D (24:47)

Yeah, exactly.

B (24:48)

Yeah, yeah. I think it's fascinating and I love that there's a real purpose behind what you do, but at the same time There needs to be an economic model to make this a reality for those in need. And so this tie in with this potential outdoorsy camping kind of a product might make sense. I'm a skier, and so over the years, it started with heated boots, and then it became heated socks and heated gloves. Now I have a heated vest, all battery operated with rechargeable batteries. They're incredibly effective. They're expensive. I mean, they're really expensive. People pay a lot. And so I think there's this really interesting way to market your product to the outdoor enthusiast who is willing to pay a lot for really good gear. But there are also a lot of outdoor companies that give back to the community, so they'll give back a percentage of their revenue to different causes, which is super cool. And so I see this as a perfect fit you can market to the enthusiast. They're certainly willing to buy your product. And you let them know that not only are they getting something really great, but it's giving back to your cause. I think that's a great tie in.

D (26:18)

It's good you say that because we've actually got mats at Everest Base Camp at the moment, keeping that exact audience warm.

A (26:26)

That's great. I agree with Steve on this. I mean, you have. There are so many use cases here. You know, camping. Imagine slipping this into a sleeping bag or a tent. I mean, people are already sleeping on these sort of inflatable, you know, mattresses in tents, those little ones. Ice fishing, mountain guides.

D (26:46)

Exactly. It's endless, isn't it?

A (26:47)

Hunters who are hunting in the winter, even disaster preparedness kits. I'm in California. Everyone's got an earthquake kit.

B (26:54)

I think people will find all kinds of uses. I mean, I can imagine outdoor sporting events, you know, having the small one where you sit on one of these mats and that would make a huge difference. Exactly.

A (27:06)

So there are all kinds of use cases. And I think that the. It's not one or the other. It's not about, oh, I should only do this. I think that you gotta, you know, this. You gotta build a sustainable business. So you need to get into those places where people are going to spend the money on them. And then over time, you can have some creative program where you give them away, or maybe you bake that in, where for every 10 sold or 100 sold or 50 sold, we give one away. Because once you achieve scale, then you can do two businesses. You can have the mission sort of nonprofit side, and you've got the for profit side where people are actually love this thing and are Using it for all their fun outdoor activities.

B (27:50)

That's great. I love this idea. How will production occur? Do you have facilities now that can scale this?

D (27:58)

Yeah, absolutely. We've chosen specific manufacturers. Everything's contracted that they can scale with us. So from originally making samples through to tens and thousands of units and all the production is actually based in Europe as well.

A (28:12)

And presumably, I mean, these get pretty warm, right? Like you can. I mean, let's say you're ice fishing in Minnesota, you know, and it's like minus 10 and you're in a tent with one of these things. It's going to keep you warm.

D (28:25)

Yeah, absolutely. We've done lab testing to negative 20 here in the UK and sort of like climate control chambers, but on the ground we've had units and we have units in Ukraine and that gets to negative 20 quite easily. So we've had the real world analab testing in those really harsh conditions. Same with Everest and along the Himalayan regions. Yeah. You get extremely cold temperatures.

B (28:49)

It's amazing. That's really cool. As a user of battery operated socks and gloves and things, I like to make sure that I extend the life. And so I always adjust it not so that I feel the warmth, but that I don't get cold. And there's a difference there, Right. If you turn it on to a temperature where you're actually feeling warm, it drains it pretty quickly. But you can adjust it so you don't get cold and it lasts a little bit longer.

D (29:17)

Well, actually, there's no need to do that with our mats because we have built in sensors. They automatically regulate yourself so you can have it on max, but it won't be drawing constant power from your battery source because it will keep you sustained at that temperature through the feedback system.

A (29:33)

That's cool.

B (29:34)

Amazing, amazing technology.

A (29:36)

And I mean, it seems like there's also an opportunity to partner with some of these expeditions. You say you're already at Everest Base Camp. I mean, I would look out for like polar expeditions also or like Antarctic expeditions, and see if you can partner with some of these people who are really posting about their travels and their adventures in blogs and in social media. Because that's just another cool thing to be part of, right? To be affiliated with. Yeah, it's awesome. Matt Zero is the name of the brand. Congratulations, Sree. Good luck with it. Thanks for calling in.

D (30:11)

Been a pleasure. Thank you.

A (30:13)

Super cool. Yeah, thank you. So, Steve, you ski with all of that stuff and I'm thinking, like, how cold do you get? I mean, you know, the technology of

B (30:24)

I Don't get cold.

A (30:26)

But the jackets that are made today and the clothing is so good, the quality is so high now. But you're wearing like battery powered socks.

B (30:36)

Well, so, yeah, my feet do get cold. But the vest is an interesting one. So you know when you're active and you're in the sun and it's the middle of the day, you don't have the vest on. But as soon as it starts to get cloudy or you're in the shade and you're sitting on a chairlift and it stops and it's 15 minutes, like, you start to get.

A (30:56)

Oh.

B (30:56)

Then you turn it on and you turn it on and it really helps you. It's really cool. This is a great business. I like Sri's idea and again, that it has something virtuous about it that she's giving to humanitarian efforts is, I think, a real plus.

A (31:16)

Yeah. And it can make camping even better. Right. Like, I get freezing cold in a tent. So there you go.

B (31:22)

Sure.

A (31:23)

All right, we're going to take another quick break, but we'll be right back with another collar. Stay with us. Hi, I'm Guy Roz, and you're listening to the advice line right here on How I built this Lab. Welcome back to the advice line on How I built this Lab. I'm Guy Raz, and today I'm taking your calls with Steve Ells, founder of Chipotle. And let's bring in our next caller. Please tell us your name, where you're calling from, and just a little bit about your business.

E (32:01)

Hi, I'm John Rarick. I'm calling from Philadelphia, Pennsylvania, but I spend most of my time in Abruzzo, Italy, where I'm the owner of Cantina di Rosina, an organic vineyard and winery in southern Abruzzo.

A (32:13)

Awesome. Thanks for calling in, John. Okay, so you own a winery in Italy. Tell me a little bit about, tell me about the story.

E (32:21)

So my mother's family were major producers in the 1800s and early 1900s in southern Abri of fine wines. And then World War I comes along and Italy gets pretty beat up. And when my grandfather returns from World War I, nothing's growing. There's a disease that has hit most of Europe's vines called Floroxa, a bug that affected many of the vineyards. So they literally just packed up and abandoned the entire business and came to New York and Philadelphia and chose other occupations and raised a family. Then 100 years later to the date, I went back and bought back the house and the vineyards and replanted everything.

A (33:09)

Wow. Wow, amazing. And so now you're producing wine on that original site. How much wine are you producing a year?

E (33:15)

Yeah, so our first year we produced 500 cases of both red and. And I kept it small the first year on purpose so that when we brought it here to the States, I could really, you know, use it to develop the brand, get into restaurants, get into retail, specifically in the Northeast, where there's a high concentration not only of Italian Americans, but also a brutsy American. Got it. So the wine was well received there. This year we're producing 15,000 cases.

A (33:45)

Oh, wow.

E (33:45)

So we're really amping it up because about 80% of our volume is in the U.S. and the opportunity clearly lies in the U.S. u.S. For us.

A (33:52)

Yeah. And wine, alcohol is heavily regulated state by state. So do you. Are you distributing it all over the United States right now?

E (34:01)

Currently we're in New York, Pennsylvania, New Jersey and Florida. And I've got a growth plan mapped out over the next five years so that we can manage that. Because with growth also comes in addition of salesforce that I have to put in the field. And also I need to be there to oversee it because I'm not a winemaker by trade. I was smart enough to know I needed to bring in a team of professional agronomists, winemakers in Italy to help make sure that everything was running. My background is really in sales and marketing, so I'm back and forth quite often, but that's really where I'll be putting most of my focus.

A (34:35)

Got it. Okay. And before we bring in Steve, tell us your question for us.

E (34:39)

You know, no surprise. I think everybody knows that the wine industry in general, alcoholic beverages, the consumption in the US has really been experiencing a big decline. We're also seeing a lot of competition from new places like cocktails, hard seltzers, and even now we're seeing cannabis infused drinks coming to market. Right. So all this new competition, and Gen Z in particular, is just drinking much less. So how do I market to a generation of wine consumers to really start to cultivate that next generation that'll allow us to continue to thrive while we wait for the pendulum to swing back in our direction?

A (35:15)

Yeah. All right, important question, a big question. Steve Ellis, I want to bring you in before we answer the question. Do you have any questions yourself for John?

B (35:24)

So one thing I think is interesting, there's an interesting parallel, and that is you are marketing something now that doesn't have as much demand as it once did. But with Chipotle, there really wasn't a Demand for what we were offering. What we were offering was very different from typical fast food. The price point was much higher. I mean, back in 1993, think about fast food menus. Taco Bell's menu was categorized by 59, 79 and 99 cent items. McDonald's had a dollar menu. Things were bundled and named by number. You ordered a number one, and if you wanted to make it big, you said supersize it. And then along comes Chipotle. I mean, we had to really teach people that they had choices and they had to work with the servers behind the counter to get their item. I mean, even something as basic as where to go when they walked in the restaurant. I mean, remember in a fast food restaurant, the first thing you did was walk to the cash register. We asked people to walk first to the food offerings. And so we had to lead customers one by one. The way I differentiated and built the business was by developing these one on one relationships with our customers. And by the time I retired 27 years later, I think we had well over a million customers a day. So you'd think about, do you really build individual relationships with individual customers? And the answer is sort of yes you do. If you're going to differentiate your product or your offering, I think it starts with one on one personal relationships. And then customers do the speaking for you and help to differentiate your offering or your product.

A (37:30)

John, I have a question for you. Do you do a newsletter at all? Have you done anything like that?

E (37:35)

We do and we capture email addresses on our site.

A (37:39)

Great.

E (37:39)

So we have an opt in list and we'll do a monthly newsletter. And I try to make it very personal so that people see our journey. Because I'm people tell me I have a story that's a little unusual.

A (37:52)

Yeah, let me offer a suggestion around that. So I think the story is interesting, very interesting family story and compelling. When it comes to your newsletter, I think what's critical, and this is something that I think a lot of people make a mistake around newsletters is that they don't. They think more about using it as a branding opportunity rather than really great content or information. So we do a newsletter for this show and I don't use it to promote the show, of course I want people to listen to it, but I really want it to be a resource for ideas, strategies, et cetera, et cetera. And I think if you use the newsletter in that way, it could really, you want it to be something people read. You know, people know Tuscany, they know Sicily, nobody knows about Abruzzo. Wines in the United States. I mean, some people do, but most people don't. Right. And so that, that, that there's a story to tell there. What do I eat this with? What, what are some interesting cooking tips? How should I taste these things? That's, that's the first thing. The second thing is, you're right, it's a hard time. I'm in the Bay Area, I'm in Sonoma county all the time. Small wineries are closing or consolidating and it's unclear if it's a long term trend or something temporary. Right. And the hope, of course, is that it's, that it's temporary. But you're also seeing some interesting trends with certain kinds of celebrities, particularly athletes. I would also think this is just a shot in the dark idea, but I would think about trying to send, identify select players on NBA teams, NFL teams, and send them some of this wine and see if you get a response. You know, I mean, you're looking at what LeBron James is doing with wine and a lot of really influential basketball players are even buying their own wineries. But I think that could be an interesting thing to try out, especially when you're talking about something different, which is Abruzzo is different. Right. It's a, for a lot of people, it's a discovery. And that's where I think you have the opportunity.

E (39:50)

Those are great suggestions. Thank you, guy.

A (39:52)

Yeah. Steve, any final thoughts or advice for John?

B (39:55)

Yeah, I like that the idea of finding people you can partner with to help promote the brand. Obvious is partnering with restaurants, well known chefs, to feature your wine, maybe inviting them out to the property, hosting them for dinners and events, and helping them understand your story and they can in turn share your story with their diners. You know, I often notice that when there is a story behind the wine, and especially a personality and maybe a family legacy, people tend to perk up. I think wine tends to be a very sort of personal experience for folks. And I think that avoiding traditional kinds of marketing probably makes it more authentic and more desirable.

A (40:50)

Yeah, for sure. You know, John, I just went to a wine dinner at a wonderful restaurant hosted by the winemaker. It was for, it was a friend of mine, but he invited, you know, the top sort of members of the club, which I'm sure you've got members of the club. And it was very special because he brought out wines that they don't sell, you know, and, and wines that are still in the process of being aged. And it was really fascinating to have that experience so I'm sure there are things like that that you are thinking about doing or doing, but it's really. You want to, right now, really lean into that group, the people who are going to be subscribers to the club. That's recurring revenue. You know that. And I think building it out to get young people to drink, it is a different challenge. But that will happen over time, especially as you figure out ways to tell the story. Using social media, of course, even TikTok. I mean, you know, book talk, right. People thought people were done reading books. All of a sudden, book talk happens, and a whole new slew of writers have become extremely successful. So I think there are some interesting ways to try and do it. Traditionally, people say, oh, well, wine isn't accessible, and young people feel intimidated by that. I don't think that's true. I think young people want an experience. They want a story. And if it's about tasting abruzzo, you know, the terroir, the soil, the air, the salinity, whatever it is, that does work, it's not gonna work right away with everybody, but it's gonna work with enough people where you start to build brand awareness.

E (42:19)

Well, thank you. We're gonna focus then on what I'm hearing from both of you is build an emotional connection with that audience and really just keep at it.

A (42:27)

Yeah, 100%, I think so. John Rarica. The brand is called Cantina di Rosina. Good luck. Thanks for calling in, man.

B (42:33)

John, good luck.

E (42:33)

Thanks so much.

B (42:35)

What a great story. And I would not be afraid that just because the current trend shows that there's less consumption, I would not be afraid to get into that business. If you're passionate about it and you have this sort of legacy connection, I think that makes for a great story. And plus, I think he really enjoys it. He really enjoys the lifestyle. So 100%, you know, that's part of it.

A (43:01)

And look, there are all of these, you know, they're challenges, right? And headwinds in the industry and with alcohol in general. But at the end of the day, it's about people around table, you know, just being together. And wine is often part of that.

B (43:14)

Exactly.

A (43:15)

Steve, before I let you go, one question that I ask all of our guests who've been on, which is if you could go back to, you know, when you were young and starting Chipotle out and you could give yourself advice now that, you know everything, you know, what do you think would have been helpful?

B (43:30)

So, you know, I was so maniacally focused on the business. I was there from morning to night. You know, at least the first year without taking days off. I mean, the only days I had off were the days we closed, Christmas, Thanksgiving. I would have tried to live a more balanced life. I think I was a little insular also. Right. I was just so focused. And I argued that that was contributing to the success of the business. And I think, well, maybe I missed something. Maybe it could have been even bigger had I been more balanced. Anyway, that's just sort of like personal reflection. Now I think I have a more balanced life. I still work hard, but I also take more time for friends and family and reflection.

A (44:21)

Yeah, it's great advice. It's hard to do when you're building something, but you're right. I mean, it is critical.

B (44:26)

Exactly.

A (44:28)

That is Steve Ells. He's the founder of Chipotle. Steve, thanks so much for coming back on the show.

B (44:34)

Always a pleasure to be on. Thanks for having me.

A (44:37)

And by the way, if you haven't heard our original Chipotle episode, you've got to go check it out. It's really a fascinating story and here's one of my favorite moments from that episode.

B (44:48)

Over a one month period, 52 people got sick with E. Coli.

A (44:53)

Were you freaking out?

B (44:55)

Well, freak, I don't know if freaking out is the right, the right way to describe it. I mean, it was just, it was all encompassing. I mean, it was like, it was really intense. You know, you wouldn't wish this on anybody. You know, that anyone would get sick from the food that you serve them is really a tough thing.

A (45:18)

Hey, thanks so much for listening to the show this week. And by the way, please make sure to check out my newsletter. You can sign up for it for free@guyraz.com or on substack. And of course, if you are working on a business and you'd like to be on this show, send us a one minute message that tells us a little bit about your business and the question or issues that you're currently facing because we would love to try and help you solve them. You can send us a voice memo@hibtid.wondery.com or call us at 1-800-433-1298. Leave a message there and make sure to tell us how to reach you. And we'll put all of this information in the podcast description as well. This episode was produced by Chris Massini with music composed by Ramtin Arablu. It was edited by John Isabella. Our audio engineer was Robert Rodriguez. Our production staff also includes Alex Chung, Katharine Seifer, Casey Herman, Kerry Thompson, Noor Gill, Rommel Wood, Sam Paulson, Neva Grant and Elaine Coates. I'm Guy Raz, and you've been listening to How I Built this.