>> hi. >> good morning. >> tonight on "titans at the table." >> this place is gorgeous, it really is. i'll be chatting with businessman turned environmental activist tom steyer. tom steyer was born and raised in the financial capital of the u.s., new york city, but chose to open his company, farallon, in san francisco. he founded the company with $8 million, and by the time he stepped down he turned the initial investment into $30 billion, making it the fourth-largest hedge fund in the world. his personal fortune is an estimated $2.6 billion.

not content with the golf course, steyer reinvented himself as an activist, funding and starring in a series of public service announcements. >> i'm tom styer. each week, we take a look at the keystone pipeline proposal. >> he believes the pipeline will escalate the production of the controversial canadian oil sands. >> the question here was, is this a chance to change our trajectory in terms of energy? is this a chance to change the way people think about it and the way the policies are shaped around energy? >> we caught up with steyer in the tiny town of mayflower, arkansas, where he was getting a look at the cleanup site from an estimated 5 billion barrel oil spill. >> here is some just off the top

of the water. it's sticky. it's extremely sticky. >> very sticky. >> it smells awful. >> in march 2013, a shallow underground pipeline owned by exxonmobil burst, sending oil running down a mayflower residential street, as can be seen in this video. >> the smell is unbelievable. i mean, look. there's oil. >> the oil flowed down the street through a drainage ditch and emptied into a marshy area. the crews had come from alberta, canada, thousands of miles away. >> what are the booms for? >> they are to soak in the oil. they are supposed to -- >> literally? >> yeah. >> that's what they're for? >> they're supposed to repel water and soak in oil.

>> steyer had come to mayflower to gather ammunition for what may be the biggest fight of his life, trying to stop the keystone pipeline from being built. he worries more leaks like this one in mayflower could happen. the proposed keystone pipeline would stretch from the canadian border across the u.s., and connect to existing pipelines that carry oil to refineries on the gulf. steyer says the oil would be sent directly to the international market. >> it is not going to the united states. what the true argument is, it's going to be more oil not from the middle east, that is true, but doesn't mean it's more oil for the united states. it just means there is more oil not from the middle east in the world market. >> we walked with steyer along the quiet street in mayflower that a few months before was covered in oil. exxonmobil is facing $2.6 million fine for the spill and spent $70 million to clean it up. the company purchased many of the homes on the block. three houses were so badly damaged, exxon knocked them down. most sat empty.

even after an accident like the one in mayflower, defeating keystone could be a long shot for steyer. if you look at the polls, 2/3 of americans do support the keystone pipeline, and that number hasn't budged in the last two years. >> it really hasn't. >> seems like you're in a minority there. >> i think that this is a topic in which people, a, don't really understand what it is and b, it's always presented either we do this or we do nothing. that's absolutely not true. we are not going to run the society without energy. it's just a question of how we think about it. >> but keystone is just part of the problem. steyer says the bigger climate issue is how tar sand oil is recovered from the canadian countryside. 20% is mixed in sandy soil lying just below the surface and is strip mined and spun in centrifuges to separate the oil from the dirt. the remaining 80% is trapped

hundreds of feet below solid rock. steam is injected underground to loosen the oil and it is pumped out. the thick tarlike crude must be mixed with chemicals to make it flow through the pipeline. tar sands require 70% more energy to extract than traditional oil. >> this is a gigantic mining operation in the middle of nowhere. they want to take production by 2025, more than double it. >> and your job is to make sure that never comes out of the ground? >> well, look, from my point of view -- i'm not a scientist. the scientists say it would be devastatingly terrible for the seven billion people on the earth if it does. >> when we return, tom steyer looks outside the box for answers. >> i actually believe that the solution for our energy problem is going to be corporate america. ♪

>> tom steyer claims money didn't motivate him, but he is incredibly good at making it. the investment firm he founded, farallon capital management, has a market value of almost $4 billion, and that has made steyer a very wealthy man. if you didn't really like using money as a benchmark for your success, you still made a lot of it. how did that work? >> for better or worse, i am competitive. >> competitive and diversified. steyer's investment fund, farallon, invests in energy companies. including a canadian operator that transports oil sand. but steyer promised to divest from his kinder martin holdings and pledged to donate money to the victims of wildfires. he looks to the oil industry for answers. >> how do you take the incident that happened in mayflower and

what happened to peoples' lives there, how do you apply that to the work you're doing now against the keystone pipeline? >> let's step back for a moment which is this. i actually believe the solution for our energy problems is going to be corporate america and actually will be private enterprise america. when we get the policy framework right, the people in that sphere will come up with creative, imaginative, innovative solutions that will blow our mind. i mean, if you really look at what's happening in the fossil fuels arena, people are being really creative and innovative. some people hate fracking but fracking is a new technology somebody from the united states came up with as a way of engineering around an old problem. that's exactly what i expect american business to do. >> what you're saying is no, not all corporations are evil, not

all corporations are bad, and in fact it's ok to make money as long as it's towards a similar goal. >> i don't think corporations are evil. what i don't think we should do is rely on corporations for our morality. you know, the truth of the matter is we're a nation of people. and, you know, pretty much i hate to say it, but the law of the land is people who run corporations, their responsibility is to take care of the interest of their stockholder. that's a very limited world view in my opinion and that's not the world view i think is going to get us to the broad answer for society as a whole. so i don't actually feel resentful, i take that as a given. and when someone asks, what's exxon's motivation, my answer is their motivation is their stockholders and their corporate net worth. >> did it make you feel that you needed to do something about what was going on in mayflower? did you feel like you had some responsibility to do something there? >> the truth of the matter is

what we've been trying to do is get the human story out because that is what other americans can understand and relate to, that experience with something that would have reverberation and impact. >> when we come back, using money to change politics. >> big things are happening. thanks to president obama, america is laying the foundation for the way we power tomorrow. >> you've been a supporter of the president. >> i have. and i am. ♪

>> billionaire tom steyer has donated $65 million to establish renewable energy centers at yale and stanford and entered into the political arena, spending

more than $10 million to support various initiatives and candidates opposed to keystone. you've been effective in many of the initiatives that you've targeted and you've called some of those initiatives you've put money into some of the best investments you've ever made. [laughter] is that something you're going to continue to do? >> i don't know if that's what i'll do forever but i think that i definitely will do that in 2014. >> in fact, tom is not the only outspoken liberal in the steyer family. his brother jim teaches civil rights courses at stanford and founded commonsense media, a nonprofit organization. the steyer brothers have been compared to another set of siblings, the koch brothers, who have spent millions backing tea party candidates and conservative products. >> i don't know the koch brothers. >> i didn't think you would. >> i definitely think there has to be differences in the sense

that those guys are doing something that is consistent with their self-interests. and -- >> when you say "self-interests" what do you mean? >> they're basically pushing stuff very good for private enterprise and specifically oil refiners. very consistently, very aggressively, and sometimes very intelligently. i see that as we're on very different trajectory in terms of how we think about it, who we think we're representing, and what we're trying to accomplish. >> the steyers have an agenda, one that leans to the left. he spoke at the democratic convention if 2012. >> big things are happening. thanks to president obama, america is laying the foundation for the way we power tomorrow. >> he and his wife have given more than $11 million to super pac's he founded and hosted a fundraiser with the president at their san francisco home.

>> you've been a supporter of the president. >> i have. and i am. >> well, initially in his first term, he was quite big on climate change, and he was quite forceful in talking about climate change. are you disappointed? >> i think the president's record through the epa on a regulatory fashion on energy and climate is really good. i think that he really understands this issue. messing this up, you wouldn't see today but in 20 years would be superobvious. and i think they have that perspective. >> tom, do you have any ambitions of running for office? >> i've always said that i would do virtually anything to make our agenda come true. and that is true. but i've also tried to be clear that this is not a intelligent, strategic, well thought out self-interested effort to promote myself. so i would say if there came a

time i thought that was really important to do, i wouldn't shy away from it because i felt like i was going to get the bejesus kicked out of me. >> you looked like a little bit like a political candidate there at the mayflower diner. though he says he has no plans for higher office, steyer stopped to have lunch with some of the victims of the mayflower oil spill while he was in arkansas, and he listened intently like a good politician. what did you learn in the last few years on your quest to get the pipeline? >> i haven't spent all my time on the pipeline. i spent some time on the pipeline. i think i've gotten a chance to be exposed to more parts of american society than i had been when i was exclusively a professional investor, so i met a bunch of people who -- >> you may not have met those women? >> i'd never have met. never have met. and i spent time with them.

it isn't like where you just say hello, how are you, and have 15 seconds. so, you know, selfishly, i think that's been really fun and that it's been very good for me. >> steyer's anti-keystone campaign hit a bump in the road recently. in late january, the state department released a environmental review stating the keystone pipeline is unlikely to impact oil sand production. if the state report comes out and says look, it's going to happen anyway -- >> is that a good thing? no. there's no way. >> in your view it's not a good thing environmentally, but some would say it would allow the president to say ok, then i will go ahead and approve the keystone pipeline. >> good. >> and then what happens to you? >> personally, i'll still get up in the morning and eat breakfast. i will feel as if a huge mistake has been made. >> i guess my -- if it gets approved, is there still a fight here at all?

>> i don't know. i've had people talk to me about that. and they've explained to me different ways you can fight. >> you don't want to look towards that point? >> i honestly don't, because i feel like we're committed to the idea of making the case right now. this makes no sense. and it's a chance actually for the president to be a global leader in a way that is incredibly relevant and incredibly historically significant. to me i look at it and go like, someone is giving you on a platter this incredible opportunity which entirely lines up with your understanding of the world and your understanding of who you want to be in the context of that world. why is that complicated? >> when we return, tom steyer's paradise. running this huge ranch, how is it different than running a hedge fund, a $20 billion hedge fund? ♪

>> the northern california coast is one of the most picturesque places in the united states, so no wonder this is where billionaire tom steyer spends his time. a few miles inland from the pacific is the 1,800 acre ranch steyer and his wife kathryn taylor bought in 2002. only an hour outside of san francisco, it's a world away. buying this ranch, was it your idea or your wife's idea? >> i think you can only blame my wife for that one. originally we bought it because the land had been so misused, you could dump stuff here if you paid them a fee. there had been a d.e.a. raid. they had people -- >> why? >> i think they were growing dope. >> oh.

running this huge ranch, how is it different than running a hedge fund, a $20 billion hedge fund? >> i'll tell you how it's the same and how it's incredibly different. it's the same in the sense that you think this looks like an asset, but it's actually dramatically changed by the people who run it. and that's exactly like every organization i've been in, which is, having great people particularly at the top is unbelievably significant and powerful. and that's where the comparison ends. >> how much have you had to put into this? >> i try never to ask that question. because, you know, we've done -- we've rebuilt every building, kathryn really felt as if raising grass-fed cattle was something that would be a good thing to do and a fun thing to do. >> tomkat ranch has a staff of 15, including scientists studying ecologically friendly ways to raise cattle. >> you basically move the

animals from place to place, and that's actually how the big ungulates -- the big herds of animals have moved across the plains of the earth. i think at this point what we would think of is real success is if it it turns out scientifically that we're right, that the way we're grazing the different animals causes the land to soak up twice as much carbon as normal. >> steyer has always bucked against conventional wisdom. he and his wife chose to settle here on the west coast near their alma mater stanford university, and thousands of miles from wall street. >> i intentionally chose not to live in new york city which is the center of investment in the united states. i never felt as if i was really part of that community, even though i had lots of friends in it. but you know the old saying, the person who has the most toys when they die wins. that's insane, right? why would that be true?

and the idea that if you make -- i remember when i first started farallon, i was talking to someone about an investment situation, and there was someone trying to take control of the company and i said, that guy is an idiot. and the person i was talking to said, he's worth a lot more money than you are, tom. i don't think he could be so stupid. i started thinking, am i dumber than everybody who is richer than me? and i think no. and i'm not smarter than everybody i'm richer than. >> is that why you left wall street? >> i just didn't think -- i didn't think it would be a great place, and i don't think my wife thought it would be a great place to have little kids. and you know, if you like the outdoors, we're sitting in pescadero, california, in the outdoors, and it would be hard to re-create. >> steyer tries to get out to his ranch a few times a week. in addition to raising grass-fed cattle, the ranch plays host to local school children who come

to visit dorothy, the 300-pound pig. >> the normal rule is don't name it if you want to eat it, right? but this really is the equivalent of a petting zoo. we could go inside the -- >> the kids come here? >> or go inside and feed them and do that stuff. here comes dorothy. >> there she is. >> let me ask you a question. do you have an apple for her? >> do we have an apple? >> no. if we were smart, that's what she's interested in, not us. look at her walk. >> tom steyer seems to have moved comfortably from ceo to his new role as environmental caretaker, but it remains to be seen if his passion and deep pockets are enough to conquer keystone. >> i think my parents had a strong sense of participating in their community, which is all i really think i'm doing. ♪ >> with the right ingredients

speed, quality, leadership -- chipotle has reinvented the fast food business. >> i believed that we could change fast food culture. >> serving food with integrity has produced big profit. and those competitors are following suit. changing the way america eats. >> we are really passionate about feeding our customers really great food.

>> food evangelists, maybe. company on a mission? definitely. 20 years ago, after graduating from the culinary institute of america, steve ells had a dream. >> the reason i opened chipotle was to generate cash so i could afford to open my full-scale restaurant. so with a very modest investment, i had $80,000 or so >> from your dad? >> with money from dad and inspiration from california taquerias, ells opened his first chipotle in denver in 1993, serving up tacos and burritos. >> we didn't have very much money. the idea was to use materials that were inexpensive, plywood and barn metal and pipes for table bases and stools, things like that. at the end of the day, i had this built environment that i think, unintentionally, really said a lot about the brand and the food that we were serving.

>> things went so well that his dream of opening a fine dining establishment with white table cloths was pushed aside. >> it did much, much better than i had expected. i thought, wow, i should probably have one more of these, then i will get onto my full- scale restaurant. the second restaurant did much better than the first. >> within five years, ells had opened 16 chipotles and attracted the attention of mcdonald's. in 1998, the world's biggest fast food chain began investing in chipotle. over the next seven years, mcdonald's put $350 million into the company, becoming a majority stakeholder. >> it was a great way to really jumpstart chipotle. >> without mcdonald's, they never would've become a big company, in my view. they immediately got the benefit of a huge company's systems, processes, real estate expertise, a whole bunch of stuff. >> what we found is that we have very different cultures.

>> those different cultures and mcdonald's decision to focus on its core business led to a parting of the ways. mcdonald's spun off chipotle in 2006, making more than $670 million on the deal, nearly doubling its original investment. the day chipotle went public, it had more than 500 locations. the stock went wild, doubling in one day, the second-best restaurant ipo of all time. today the company is worth about $12 billion as the stock has more than tripled in the past 5 years. ells is the driving force. >> we really broke all the fast food rules. we ordered fresh, whole ingredients. we prepared everything in the restaurant according to classic cooking techniques, and then we served all the food in this interactive format, so the customers get to pick and choose exactly what they want. >> it's a format where customers are lining up, eager for food

that hasn't been sitting under heat lamps, but instead is quickly made in front of them. >> if anything, they created that fast casual category. i look at them as more of a trailblazer, as a first mover. >> fast casual eateries including panera bread and mexican food chain qdoba promise a higher quality of food and atmosphere than fast food restaurants. fast casual is the fastest growing category in the restaurant business, boosting sales 13% in the u.s. in 2012. compared to sales growth of less than half that in fast food chains including yum! brand's taco bell and mcdonald's. all well-known brands, but chipotle takes it further. >> they have been able to brand themselves as a company that you can identify with based on your values. >> this is steve. steve is a classically trained chef. he is also the ceo of chipotle. >> those values highlight locally sourced, natural organic food whenever possible, and an

awareness about how animals are raised. >> you didn't start out that way. >> no, i was starting out by buying fresh food. but you learn that maybe fresh is not enough anymore, that you really need to understand the provenance and the methods by which farmers and ranchers raise food. >> steve had an idea. he visited the industrial hog farms where most pigs are raised. the pigs were kept indoors all the time. >> my introduction to the way most of the pigs are raised, i'd say 99% of them, and i learned about this maybe 12 years ago -- when i saw that, it was really shocking to me. it is a model that i think is based on a lot of exploitation. pigs are crammed into confinement factories, if you will. >> you were upset by that. >> most people who see that would be upset. >> so upsetting that chipotle decided it would no longer use pigs or cows raised on industrial farms.

today, the pork is raised on open fields at the niman ranch pork company. chipotle buys more naturally raised meat than any other restaurant company in the world. the cilantro is organically grown and the chain uses lettuce, peppers, and oregano from local farms around the country. this food with integrity comes from ells who has taken a hands- on approach in every part of the business, from design of the tables and chairs to food preparation. and hands-on when it comes to picking managers, marketing, and customer service. it is a philosophy preached by chipotle's management team. >> anytime we get customer feedback that is less than wonderful -- >> don't tell me you call them. >> well, we do. if we get an e-mail from a customer, we call them or write them back.

>> a handful of chipotle's senior managers are longtime friends of steve ells. >> we were calling it the chipotle mafia. >> there are a lot of people who make up the senior management team. two i happen to have gone to school with. >> those two are co-ceo monty moran and chief marketing officer mark crumpacker. then there's another high school pal, joe stupp, who runs chipotle's social media. bruce gueswel designs the chairs you see in every chipotle and the wall art. his wife went to school with steve ells and the others. >> did you have any idea when you were in high school that you would be doing this together? >> steve wasn't even going to be a chef at that point. he was studying art history or something. so, no, this is all very strange. >> i'm going to have chili corn salsa with sweet white corn, garlic, onions -- delicious. >> not strange to ells, who was fascinated by food at an early age. >> welcome to "the french chef," i'm julia child.

>> is it true that you did watch julia child and "the galloping gourmet" when you were younger? >> it's true. i loved those shows. as a kid in grade school i would watch their shows and then go in the kitchen and try to make stuff. >> and chipotle has been making stuff for the last 20 years. industry watchers say the company continues to gain traction thanks to a key advantage. >> what's unique about chipotle? >> fundamentally, it's the founder. really good entrepreneurs all have great passion and it's real. this is a guy who lives it. >> when we come back, the guy who lives it goes face to face with employees. >> this is denise, our empowering leader. ♪ >> companies talk about the

importance of having a people culture. this company means it. it's 9:00 a.m. on a monday morning and the co-ceo's of an approximately $12 billion company are making a surprise visit to this chipotle. their mission, to interview every employee who works here. last year, ells and moran made 220 visits to personally check in on chipotles around the country in search for what they call the next restaurateur. it's a title that goes to an elite manager who has shown an ability to work with people and promote from within the ranks. >> do you know what a restaurateur is?

>> it's someone with high standards. you make me so nervous because you asked that question. >> for the next seven hours, ells and moran talk to the team. their goal is to put employees at ease while checking in on what's going on at the restaurant. >> so how was your team when you arrived? >> i had to get rid of most of them and build a brand-new team. >> is it fun to work here? >> it doesn't sound very convincing. >> is denise an empowering leader? >> definitely. >> what makes you say that? >> she is constantly on top of everybody. she is constantly teaching. >> what attracted you to chipotle? why did you decide to be here? >> i love cooking. that's my passion.

>> over the years, i knew that chipotle had all kinds of potential, but the concept was never really reaching its full potential, and i needed to have a program that would enable us to attract better people. >> when steve approached me to join chipotle, originally it was because he was intrigued by the kind of culture we had at my law firm. there were a lot of people who are really into what they were doing and steve saw that and challenged me over the years to bring that kind of culture to chipotle. >> the hero in their system is the store manager that manages to promote the most people who are qualified. it is essential to their growth model. >> today, the chain has more than 1,400 restaurants in the u.s., adding new stores at a 13% clip in each of the last four

years. the number of locations has almost doubled. chipotle may open as many as 180 more new u.s. restaurants by the end of this year. internationally, chipotle began expanding 5 years ago and now has 5 restaurants in canada, 7 in europe, with more under construction. but growth of locations isn't enough to appease investors. some say chipotle's shares have gotten ahead of themselves. >> this is a mature company trading at 40 times earnings, four times sales, and it's trading at 40% or 50% over any of its peers. when you're looking at the s&p 500 and you're looking at the multiple and its competitors, this is trading like an internet stock. and there is no reason it should be. >> other critics have included hedge fund manager david einhorn

of greenlight capital who cited growing competition, saying taco bell was about to eat chipotle for lunch. bond fund manager jeff gundlach of doubleline has also advised shorting chipotle's stock, telling investors, a gourmet burrito is an oxymoron. all you need to compete with its core business is a taco truck. >> some of the folks that are shorting chipotle stocks, one of the things they're worried about is labor costs for the company. you smile. do you worry about increasing labor costs? >> not in particular. i think anything that happens on the labor cost front is something that we have no disadvantage and some advantages over any competitor out there. do i worry about labor cost? no. the best way to make sure that our labor costs are healthy is to make sure that our teams are the very best teams that they can be. >> he can say what he would like. you can get on and google minimum wage hikes. it is coming for everyone. when it hits mcdonald's, they are trading at 15 times

earnings. when it hits chipotle, the margins are going to get hit and they are trading at 40 times earnings. it's a totally different conversation. >> so you will short the stock, but you are not necessarily shorting the company. >> correct. >> i would go back 20 years ago to when i was starting chipotle in the first place. if i had thought about making money instead of creating a great restaurant experience, i would have thought, oh, i need to buy cheaper ingredients. i need to buy things that are highly processed and easy for an inexperienced, low-performing team to consistently produce. >> chipotle has run into some problems in its effort to build top teams. in 2010, an audit by federal investigators found undocumented workers at chipotle leading to hundreds of firings. the company says it now has programs in place to ensure all workers are legally in the u.s. >> our turnover has normalized now. i think for a while it was

increased as a result of some of the concerns that arose from the investigation with regard to immigration. but it has leveled off now. >> i love, love, love this company. i worked retail for five or six companies, i have never had a company push people the way you push us. >> the team is really coming together. they know that you really care about them. you set yourself up for great success. >> coming up, chipotle's success may lie in its untraditional methods. >> we don't do the same advertising everybody else does. ♪ >> just another rock festival?

not exactly. it's the annual cultivate festival, part of chipotle's unconventional approach to marketing that includes cooking demos. >> the nitrogen doesn't have any calories or flavor, it's just a coolant. >> eating, drinking and education. in between the free burritos, there are booths that promote sustainable agriculture and highlight the dangers of industrial farming. chipotle's philosophy, food with integrity, in the form of an all-day party. mark crumpacker created cultivate and is in charge of chipotle's advertising and media. >> we don't do the same kind of

advertising everybody else does. if we were a typical fast food company, all of our advertising would be about the new menu item that is available for a limited time only. since we don't that, we have all these other ways to tell our story. >> another way chipotle is telling its story is with a mini drama series. >> we are in l.a. shooting a web series that we've created called "farmed and dangerous." it's about a likeable but misguided group of people whose job it is to spin the most egregious aspects of industrialized agriculture so it looks good for consumers. >> chipotle plans to air "farmed and dangerous" online and hopes the series will be shown on cable or broadcast tv. no deals yet. >> i hope it develops an audience who likes it for its entertainment value. >> consumers already found entertaining chipotle's one and only national tv ad.

a two-minute animated film about a farmer who decides to let his pigs out of little pens to roam free. meant to contrast the drawbacks of industrial farming with the concept of going back to the land. the mini flick first went viral, getting more than 4 million hits, then went to movie theaters before ever hitting the airwaves. >> mark was really brilliant in the way he wanted to communicate the importance of food with integrity in a way that is not preachy, that people really could understand, and not just the facts about ingredients but the emotional component to why it is so important to buy sustainably raised foods. >> these days, chipotle is selling more than food. scroll the company website and you'll see organic hoodies, canvas totes, and baby tees for sale. >> is part of the strategy to also become a lifestyle brand? >> our customers made us a lifestyle brand. people would make their own chipotle t-shirts.

>> really? >> sure, yeah. they are very loyal people, so for us it was really just a matter of helping that out. >> you spend one third of your sales on ingredients and very little on marketing compared to everybody else. can you keep that equation going? >> i think the most important marketing we do today, in the past, and in the future, will always be what you experience when you come into these restaurants. do you love what you eat? >> when the lines aren't 20 minutes long, they will up their marketing. >> chipotle is now spending less on marketing as a percentage of sales and it has no plans to roll out a big tv campaign. >> face deep in a baconator from wendy's. >> in stark contrast to its competitors, chipotle's main menu has hardly changed since the first store opened 20 years ago. >> one of the things that makes chipotle financially successful is our focus. our simple menu, and the fact that we don't constantly add new

menu items and therefore we don't have to spend lots of advertising dollars around each one of those menu items. we don't have to try to teach our crews how to prepare new menu items, which would mean dumbing everything down. >> chipotle has basically a couple of things -- burritos and tacos and bowls and salads, i guess, too. but it is the combinations people can make, there are so many combinations of flavors that i don't think it is about a new menu item. >> do you feel pressure to do anything like a breakfast? >> we signed a lease and opened a restaurant in the dulles airport, and part of the lease stipulation is that we be open during breakfast. we have since opened another airport location at baltimore airport, and we have a new frittata that we dice up the same size as our chicken or steak, and that is part of the breakfast burrito or bowl or tacos. and it's delicious. >> do you plan to expand that? >> we will see how it goes.

right now we are just going to continue, but it is always a possibility. >> one new item that is on the menu, sofritas. chipotle added its first new item in june. in an effort to expand its customer base, chipotle began serving the vegan filling made with tofu in its california stores, a test run for a national rollout. >> certainly there are a lot of vegans or vegetarians who are asking for this sort of thing. what we notice is that people who are buying sofritas now, about half of them are vegetarians or vegans and the other half are people who normally eat meat. >> how far can you take this model? >> i think many different kinds of cuisines can fit into the chipotle format. >> first up, shophouse. >> it is based on the flavors and ingredients of southeast asia. you have exciting thai curry,

vietnamese meatballs, a traditional thai preparation. >> there is one shophouse in d.c., another in hollywood. six more are on the way by 2014. >> could you see it for italian food, for indian food? >> any kind of cuisine would fit into the model. that's why i think it is the new fast food model. >> five years from now, 10 years from now, do you want to be steve ells, the person leveraging this model, this new fast food model that you have created? >> what is exciting is that it is not going to be about steve ells creating anything. it is going to be about an extraordinary team. >> we have read that you wanted to open a chipotle, get a bunch of cash and open up a fine dining establishment. do you still dream about doing that? >> i do, and every week we open up three new fine dining chipotle restaurants in a neighborhood near you. >> this is it?

>> i think this is it. ♪

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