Chipotle had a lot riding on its long-awaited queso.
After a truly brutal year both legally and financially, the fast casual giant orchestrated a comeback fueled by the smooth, orange gold that is the beloved Tex-Mex cheese dip known as queso. Almost universally adored on the fast food circuit, queso is easy to produce, scale, and eat; plus, Chipotle fans had been pushing for the company to make its own queso for years on social media.
Seems like a pretty surefire way to reclaim Chipotle's fast casual game dominance, right? Well, that's not what happened.
Instead, Chipotle queso is, by most accounts, no bueno. In efforts to maintain its adherence to "real ingredients," Chipotle opted to make its dip from aged Cheddar rather than the requisite Velveeta or jack cheese, and to include four types of peppers and chiles. In theory, this sounds great, but the result seems to be, well, underwhelming to say the least.
This less than flattering feedback has led some financial analysts to conclude that the queso is the cause for a 3.6 percent stock slip on Monday and a further 1.5 percent slip on Tuesday.
"A very negative reaction to the queso launch suggests Chipotle launched a product that is not meeting consumer expectations, and, as a result, missed a potentially significant opportunity to add queso as an incremental add-on," Goldman Sachs analysts wrote in a research note Monday, according to CNN Money.
RECIPE: Perfect QuesoChipotle, for its part, is downplaying the Twitter backlash. "We like the way our queso came out, and plenty of customers agree," Chipotle PR director Chris Arnold told MUNCHIES via e-mail. "There may always be some who aren't wild about it because it's a little different than other quesos, but we knew that going in."
Arnold says that the response was "encouraging" at 350 restaurants in California and Colorado where queso has been tested, and that it made sense to roll it out nationally. The problem, he suggests, might be that consumers are so used to the processed orange stuff that they are destabilized by the taste and texture of a queso sans artificial ingredients. (A couple of MUNCHIES editors gave it a shot, and found it less like queso and a little more like Béchamel sauce, with less silkiness and umami flavor than one might expect from a traditional queso.)
"Much of the criticism of our queso stems from elements that make ours different than others; its texture, for example," he explained. "We decidedly made our queso different than others in that most queso is made with a bunch of artificial ingredients—stabilizers, preservatives and artificial flavors, for example—and that is not something we do. Given the pre-conceived notion many people have about what queso is (and isn't), we knew there would be some who didn't like it based on the simple fact that ours is different, largely because it's not made with artificial ingredients. That's OK. Others love it."
One thing Arnold did not want to discuss was the impact of the queso on the company's stock market valuation. "As to the impact the queso rollout has had on our stock price, that isn't something about which we will speculate," he said.
At its peak, in August 2015, Chipotle stock hovered at around $758 per share. But after more than two years of legal and PR nightmares involving noroviruses, E. Coli, salmonella, bay leaves, a racial discrimination lawsuit and a $7.65 million in sexual Harassment suit, the company did not need another setback. At the time of writing, Chipotle stock is trading at $303.