Steve Ells, founder of Chipotle, joins Guy Roz to advise entrepreneurs facing business challenges. Ells previously appeared on the show in 2017 to share Chipotle's origin story and returned in 2023 to discuss his robot-powered restaurant concept Kernel.

After closing Kernel within a year, Ells pivoted to Counter Service, a sandwich restaurant emphasizing artisanal bread and fresh ingredients. The episode features three callers: Rebecca Smith from Streaky Bay Distillers in remote South Australia, Sri from MatZero making USB-powered heating mats, and John Rarick who revived his family's century-old Italian winery.

The conversations explore differentiation strategies in crowded markets, balancing mission-driven businesses with commercial viability, and adapting to changing consumer preferences in declining industries.

From Robot Kitchens to Artisan Sandwiches

Ells closed Kernel after less than a year because 'it didn't appear to be the rocket ship that Chipotle was' and wanted 'another rocket ship.'

Counter Service differentiates itself with bread containing only four ingredients: flour, water, yeast, and salt, baked fresh daily by artisan partners.

The robot arm at Kernel performed limited functions: 'It picked from a rack the item that was being ordered and put it in the oven. And then when it was done, it took that item out of the oven.'

Ells learned that automation was 'polarizing' - some customers were fascinated while others 'said they want people making their food,' leading to emphasis on human interaction at Counter Service.

Foraging for Differentiation in Crowded Markets

Rebecca Smith's Streaky Bay Distillers operates in remote South Australia among 650 craft distilleries, generating $400,000 revenue this year versus $200,000 last year.

The distillery differentiates through local foraging: 'We collect up mulberries, figs, citrus... quandong, abalone shell, coastal daisy, coastal rosemary' and donates $5 per bottle to motor neurone disease research.

Ells advised focusing on core strengths: 'A company that focuses, that's best in the world at something... might somehow resonate or be more impactful with customers than having... we also have a vodka and we also have a whiskey too.'

The suggestion to target Australian bars in Los Angeles and New York emerged as a potential US market entry strategy, leveraging the authentic Streaky Bay story.

Mission-Driven Products Finding Commercial Success

Sri's MatZero heating mats, originally designed for humanitarian aid, show traction in outdoor, camping, healthcare, and consumer markets with products ranging from $150-350.

The mats use built-in sensors for automatic temperature regulation: 'You can have it on max, but it won't be drawing constant power from your battery source because it will keep you sustained at that temperature.'

Ells suggested targeting outdoor enthusiasts who 'are willing to pay a lot for really good gear' while maintaining the humanitarian mission through give-back programs.

MatZero products have been tested to negative 20 degrees in lab conditions and are currently deployed at Everest Base Camp and in Ukraine conflict zones.

Reviving Family Legacy in Declining Wine Markets

John Rarick rebuilt his family's Abruzzo winery 100 years after his grandfather abandoned it post-World War I due to phylloxera disease, now producing 15,000 cases annually.

The winery faces industry headwinds: 'Wine industry in general, alcoholic beverages, the consumption in the U.S. has really been experiencing a big decline' with competition from cocktails, hard seltzers, and cannabis drinks.

Ells emphasized building individual relationships: 'The way I differentiated and built the business was by developing these one-on-one relationships with our customers... by the time I retired 27 years later, I think we had well over a million customers a day.'

Suggested strategies include partnering with celebrity athletes, hosting chef dinners, and creating educational content about Abruzzo wines since 'nobody knows about Abruzzo wines in the United States.'