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Chipotle's venture fund has pipeline of sustainable food targets

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Mar 27, 2023
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Illustration: Allie Carl/Axios

Chipotle's venture fund is directing its capital toward the sustainable food supply chain, with two minority investments under its belt already.

Why it matters: Launched last year, the chain's Cultivate Next arm is a vehicle to make sustainable bets as locally sourced food becomes increasingly vital to consumers.

Catch up fast: Last week, Cultivate Next announced investments in Local Line, a food sourcing platform for regional farms, producers, food hubs, and buyers, and Zero Acre Farms, a sustainable oils and fats food company.

  • Terms of the investments were not disclosed. Cultivate Next's fund has $50 million to deploy.

What’s next: Chipotle chief technology officer Curt Garner tells Axios the fund plans to make three to five investments a year, but that isn’t a hard target.

  • “We have a number of companies that we're talking to right now that I expect through the funnel will be funded this year,” he says.

Zoom in: The investment in Local Line was a pre-Series A, Garner says.

  • “Now that they have direct access to be a part of Chipotle’s supply chain, it starts giving them an established repeatable market,” Garner mentions.
  • For Zero Acre Farms, the investment comes off the heels of the company's Series A raised last year.
  • Zero Acre’s mission is to steer people away from vegetable oils, which is a contributor to deforestation and carbon emissions, by using fermentation to create healthy oil fats.
  • Chipotle’s company-operated restaurants can be used as a testing ground for these oils, helping Zero Acre scale, Garner says.
  • “That scale and our investment in helping them scale, both as an investor and as a customer, brings the capability to have this become a de facto product," Garner adds.

What they’re saying: These investments are “aligned with our DNA,” he says.

  • Since its early days, Chipotle has cited buying local food as a top priority.

Of note: The sustainable investments also help Chipotle reach environmental, social, and governance goals, which it will tie to executive compensation.

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