Chipotle Mexican Grill (NYSE: CMG) wants to take its American burritos back to their ancestral birthplace
Chipotle Mexican Grill (NYSE: CMG) is a popular choice in the US when it comes to Mexico-inspired, fast-casual fare like tacos and burrito bowls. The restaurant chain, however, was actually founded in Denver, and it has no real connection to its namesake country other than the fact that part of Colorado once belonged to Mexico. That’s about to change, though, with Chipotle announcing this week the somewhat ironic plans to expand south of the border.
The move prompted some on social media to joke that it was similar to a Panda Express setting up shop in Beijing. The ancient land of the Aztecs is a culinary destination in its own right and certainly doesn’t require a foreigner to come and tell it how to make a better quesadilla. Imagine Domino’s Pizza (NASDAQ: DPZ) trying to open in Italy. That actually did happen once, and it failed miserably. Taco Bell—now owned by Yum Brands (NYSE: YUM)—tried twice to open in Mexico, only to give up both times.
Chipotle, for its part, thinks Mexican eaters will resonate with its reputation for clean ingredients, and it says the Mexico digs—set to begin opening in early 2026—will help it explore other markets in the region. The real special sauce is the partnership with Mexican multi-brand restaurant operator Alsea (Bolsa Mexicana: ALSEA), which was successful in bringing the Tex-Mex favorite Chili’s to the country and growing its presence there to 73 locales.
“Through this development agreement, we will continue to leverage our vast knowledge of the Mexican consumer and restaurant industry expertise to bring our customers the best food experiences and brands from around the world,” said Alsea CEO Armando Torrado. The company—which operates or sub-franchises nearly 5,000 restaurants for fast food giants like Domino’s, Starbucks (NASDAQ: SBUX), Burger King (NYSE: QSR) and TGI Fridays in countries including Argentina, Chile, Colombia, Mexico, Portugal and Spain—is known for its consolidated supply chains, and exponential growth on both sides of the Atlantic.
A gateway expansion
Chipotle signed its first international development agreement in 2023 with Alshaya Group to operate locations in the Middle East, and it also has restaurants in Canada, the UK, France and Germany. And while it’s signaled an ongoing commitment to continued expansion abroad, the Mexico deal may have more of an upside for Alsea, which—if things go well—could nab rights to bring the brand to other markets that might find more novelty in the cuisine.
Despite solid sales growth in the last quarter, Mexico City-based Alsea has seen its shares decline 44% in peso terms over the past year amid concerns about its high debt levels and broader macroeconomic worries about a slowdown in consumer spending. Jefferies acknowledged risks including a weakening Mexican peso, but the investment bank still put a buy rating on shares in a recent report and said they could rise as much as 20% from current levels because of the company’s growth potential and profitability measures.
Making American burritos a thing in Mexico is probably going to be a tough sell for a number of reasons that range from recessionary fears to a potential backlash over US tariffs, but if anyone can do it, it’s certainly Alsea. The real prize to be had, meanwhile, may lie even further south, and this initial push may just be a stepping stone.
