When Brand is the Bottleneck

Recently, a collegue and I went to lunch at Pancheros, a 14-year old burrito chain started in Iowa City, IA. I’ve spoken about the power of lunch before as well as the lunch experience. Always enlightening. This time was no exception.

I’m a big fan of Chipotle, they’ve taken the Subway model and transferred it to Burritos. In the process, created the fastest growing resturant segment and an engaging write-up in Trading Up: The New American Luxury.

Rather, I thought it was Subway, until I stepped into Pancheros.

The process at both Pancheros and Chipotle are identical; start with the burrito, then rice, beans, meat selection, salsa, sour cream, guacamole, and greens.

The difference is at the start; Chipotle has pre-pressed burritos that are steamed for each order, Panchero’s creates each burrito fresh from a ball of dough for each order.

According to Pancheros website, freshly-pressed burritos were introduced in 1998 – as Pancheros’ differentiator I suspect, for that was about the time I discovered Chipotle.

Bad idea.

This was the Panchero’s order-taker’s process I observed:

  1. Take burrito order.
  2. Turn around, press ball of dough into burrito.
  3. Throw freshly-pressed burrito on grill.
  4. Turn around, take next order.
  5. Repeat step 2.
  6. Flip over first burrito.
  7. Grab first burrito and re-ask first customer what they ordered.

Compare this against Chipotle’s order process:

  1. Take burrito order.
  2. Grab pre-pressed burrito and steam.

As I discussed in my 5 Organizational Tips from Academia entry, the infrastructure is often the bottleneck to greater capacity. Panchero’s capacity is being limited by their fresh-pressing.

If you have both in your neighborhood, pick a nice day and stop by both. I predict the Chipotle will have a line out the door and the Panchero’s might have 10 people in queue.

What should Panchero’s do? I recommend taking a cue from Baja Sol Tortilla Grill and differentiate on offering and freshness.

2 thoughts on “When Brand is the Bottleneck

  1. Maybe, in your behavioral research you forgot to take into
    account that many people decide where they go to eat on taste
    as well. For me that is the main reason I frequent a restuarant.
    The service being number two on the decision making process. I
    know that as you watch over time Panchero’s will do win the hearts
    of many because they take the time to make everything fresh.
    It that fresh taste of that tortilla that brings back the millions
    of customers that love Panchero’s, I know that is why I fell in
    love with their product. They take the time to give you a better
    and healthier product. Another distinguishing thing is they trim
    the fats off their meats, I know Chipotle doesn’t. Not just
    that they also make fresh salsas and guacomole everyday! I live
    in Omaha and both concepts came here this year, I know that
    Panchero’s is doing really well and is packed every Friday and
    Saturday. So come down to my neck of the woods and you will
    see that clearly Panchero’s is a healthier and better produc,
    that alone will win the hearts of many of those who care about
    what they fuel their body’s with. email me back and I will
    personally take you to the Panchero’s I frequent and I will buy
    you a borrito.

  2. I can imagine seeing Chipotle and Panchero’s compete directly would be very eye opening. A few hundred miles north, we’re not as fortunate.

    Nick – keep us posted on how things shake out in Omaha and thanks for the burrito offer.

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