Diving overview:
Chipotle has made minority investments in artificial intelligence supply chain platform Lumachain and fast-casual concept Brassica as part of its $100 million Cultivate Next venture fund, the company announced in a press release Tuesday. Lumachain is an Australian-based company that tracks the origin, location, and condition of food from farm to fork, “enabling waste reduction and efficiency improvements.” Brassica is a six-unit Mediterranean chain based in Ohio. Chipotle will launch Cultivate Next in 2022 with the goal of not only helping it reach 7,000 units in North America, but also making early investments in companies that align with its sustainability focus. The fund’s investments include GreenField Robotics, Hyphen, Local Line, Meati Foods, Nitricity, Vebu, and Zero Acre Farms.
Dive Insight:
Chipotle’s investment in Lumachain is consistent with past investments in artificial intelligence and automation. Lumachain uses “Computer Vision AI” to monitor the operations of food production factories and improve the quality, efficiency, and safety of those factories.
With Chipotle’s investments in robotics companies Hyphen and Vev, the brand has begun experimenting with an automated make line and a robotic avocado processing machine, respectively. The company began testing the technology in stores in September.
The investment in fast-casual chain Brassica marks the fund’s first investment in a restaurant concept. Chipotle has tried other concepts in the past, including Farmesa Fresh Eatery, which closed in April after about a year of testing. Brassica is similar to Chipotle in its design. The brand offers front-line ordering and customization. The menu includes falafel, pita bread, antibiotic-free meats, roasted vegetables, seasoned fries, vegan tahini, chocolate chip cookies, freshly squeezed mint pink lemonade, and more.
Nate Lawton, Chipotle’s chief business development officer, said in a statement that the funding will allow Brassica to scale, open additional stores and enter new markets. The Mediterranean brand was founded in 2015 and has slowly expanded. The company opened its second store in Cleveland late last year, and its sixth store overall.
Chipotle, which dominates Mexico’s fast-casual world, may be feeling the pressure from Hippo. Cava went public last year and has become one of the leading restaurant success stories of 2024 due to increased sales and strong new openings. By focusing on emerging fast-casual brands, Chipotle could protect itself from competition outside its immediate market segment.
