By Gavriel Shohet, RTN staff writer - 11.1.2024
Chipotle Mexican Grill is taking a significant step towards enhancing its supply chain transparency and efficiency with a minority investment in Lumachain, an AI-powered supply chain platform. The investment, made through Chipotle’s $100 million Cultivate Next venture fund, established in 2022 to support strategically aligned companies, highlights the company’s commitment to leveraging technology for operational improvement and growth.
Lumachain, founded in 2019 by Jamila Gordon, a former CIO of Qantas Airways, isn’t just another supply chain tracking solution. It utilizes computer vision-based AI to go beyond simply tracking the origin and location of items. Lumachain’s technology captures real-time data on the condition of items throughout the supply chain, providing a comprehensive view from farm to table. This granular level of detail allows for proactive identification of potential issues, such as spoilage or damage, enabling quicker intervention and reducing waste.
The company’s origin story is rooted in a real-world problem. During a dinner conversation with friends in the meat processing industry, Gordon learned about the industry’s decades-long struggle to trace individual cuts of meat back to their source animal. Recognizing the potential of AI to solve this challenge, Gordon, drawing on her experience building complex tracking systems for Qantas Airways, decided to tackle this problem head-on.
Lumachain’s approach leverages computer vision and AI to analyze images of products at various stages of the supply chain. This allows the platform to identify individual items, track their movement, and assess their condition, providing a level of transparency and traceability that was previously unattainable. The company’s early success in the meat processing industry, where it has secured partnerships with major players, demonstrates the effectiveness of its technology.
This investment aligns with Chipotle’s ongoing efforts to enhance its supply chain operations. The company has already implemented RFID technology across its supply chain to automate inventory tracking and is working with Oracle to develop a “supplier visibility” project for comprehensive supply chain insights. The addition of Lumachain’s AI-powered platform further strengthens Chipotle’s ability to monitor and optimize its supply chain, potentially leading to reduced waste, improved food safety, and increased efficiency.
Beyond its supply chain focus, Chipotle is also exploring other avenues for innovation. The company is currently testing an automated avocado processing machine, dubbed the Autocado, and an automated makeline for assembling bowls and salads in two California restaurants. These initiatives, along with the Lumachain investment, demonstrate Chipotle’s dedication to leveraging technology to address key challenges in the restaurant industry, such as rising labor costs, increasing demand for digital ordering, and maintaining consistency and quality at scale.
The investment in Lumachain also comes as Chipotle searches for a new CEO following Brian Niccol’s departure to lead Starbucks. This move, along with the company’s recent investment in Brassica, a fast-casual Mediterranean restaurant chain, suggests that Chipotle is actively exploring new avenues for growth and innovation, even amidst a leadership transition.
Chipotle’s stock performance, with shares rising 2.7% over the past three months and 30% since the start of the year, indicates investor confidence in its long-term strategy. By embracing automation, enhancing supply chain visibility, and exploring new culinary concepts, Chipotle aims to solidify its position as a leader in the fast-casual restaurant industry and position itself for continued growth and success.
