Chipotle Announces Pizza Chain Expansion

The company is taking advantage of a fast-growing fast casual dining market.

Chipotle is hoping to help expand the Pizzeria Locale chain beyond Colorado.
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Twenty years ago, the concept of combining "chipotle" and "pizza" might have sounded like a Mexican-Italian fusion disaster. But now that "Chipotle" is more synonymous with restaurant success than the chili pepper for which it is named, it sounds more like a smart business move.

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That's what the company is hoping as it invests in the expansion of a Colorado-based pizza chain, Pizzeria Locale. Chipotle announced Wednesday morning that it is "exploring options" for two new Denver locations beyond the restaurant's first location, also in Denver. The chain is based on an original Pizzeria Locale, opened in Boulder, Colo., in 2011 by two local restaurateurs. Chipotle has invested in Denver's first Pizzeria Locale location and has the option of majority ownership, according to Denver Business Journal.

The concept of Pizzeria Locale is similar to that of Chipotle, allowing customers to choose their toppings and watch pizza assembly in what the company calls an "interactive service line," though the menu will also feature 14 preselected combinations. Rounding out the offerings will be salads, sides, and red and white Italian wine on tap.

The restaurant will also try to maintain the speed of Chipotle's burrito assembly, with an oven that will bake pizzas in less than two minutes, according to the press release.

This is not Chipotle's first foray beyond the burrito. In 2011, Chipotle opened its first ShopHouse Southeast Asian Kitchen, in Washington, D.C. The restaurant now has six locations in California and the D.C. metro area.

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If Chipotle's success is any indicator, Pizzeria Locale could have huge growth potential. Twenty years after the opening of its first location, the restaurant has more than 1,400 locations, according to its 2012 annual report. In addition, the fast casual restaurant industry, which includes restaurants such as Chipotle, Panera and Qdoba, is experiencing strong growth. According to market research firm NPD, fast casual restaurants saw traffic grow by 9 percent in the year ending in May 2013, while the number of visitors to full-service restaurants remained stagnant over that period.

But don't expect a Pizzeria Locale on every corner just yet; Chipotle's CEO stresses that the burrito chain will remain at the center of the company's growth for now.

"While both Pizzeria Locale and ShopHouse are exciting concepts, it's important to remember that our growth will continue to be driven for the foreseeable future by expanding the Chipotle brand within the U.S.," says Steve Ells, Chipotle's founder, CEO and chairman.

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