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THE WALL STREET JOURNAL:

After graduating from the Culinary Institute of America, Steve Ells dreamt of opening a fine-dining restaurant but – like many first-time entrepreneurs – lacked start-up funds. His solution in 1993 was to open Chipotle Mexican Grill, an easy-to-operate joint that could be the “cash cow” for his upscale establishment. But the idea took off, and the Denver-based eatery with its foil-wrapped burritos soon won loyal customers and big backers such as McDonald’s Corp. In 2006, the company went public, and now has over 900 locations, 24,000 employees, $1.3 billion in annual revenue and a focus on naturally raised ingredients. Mr. Ells, 43 years old, remains Chipotle’s chairman and co-chief executive. He still hasn’t opened his fancy restaurant.

Edited interview excerpts follow:

Q. Let’s hear about your early days.

A. Having never taken a business class, the economics of restaurants scared me. I opened Chipotle with the idea that I could step away from it and use it to support my full-scale restaurant. There were very few moving parts. We served just a few things, burritos and tacos, and it was put together very simply with plywood. It had a very funky, raw look to it. Of course it also had a low investment cost. And so what resulted was this restaurant that was, in fact, quite replicable.

Q. As a classically trained chef, you didn’t set out to open a fast-food chain. Have you stayed because of the success, or did your passion change?

A. One of the pivotal moments for me was realizing that our “food with integrity” approach at Chipotle was satisfying my passion. That’s about bringing the best quality, sustainably raised ingredients to everyone: chicken without antibiotics; beef without hormones. These ingredients were only available in high-end restaurants, not mainstream places. Today, we buy more naturally raised meat than any other restaurant company in the world. I don’t know if I would ever have that kind of impact with one full-scale restaurant.

Q. What inspired the focus on natural ingredients?

A. About 10 years ago, I was reading an article in Ed Behr’s “The Art of Eating” about the Niman Ranch farmers up in Iowa, who were raising pork outdoors or in deeply bedded barns, and had a very special protocol about raising animals humanely, feeding them a vegetarian diet and not giving them growth hormones. I sent for a sample and made carnitas with it – and they were significantly better.

Most pork comes from factory farms or confinement hog operations. I toured these places, and I knew I didn’t want my success or Chipotle’s to be based on the exploitation I saw. Not only the brutal treatment of the animals but the disregard to the environment, to the displacement of the family farmer and to the working conditions.

Q. All of the pork and chicken used in Chiptole restaurants is naturally raised; 60% of the beef is. How does that affect your overhead?

A. Our food costs are about 31.5% of sales – this is significantly higher than most fast-food restaurants – but you can taste the difference. That’s why customers are loyal. They’re not asking for free-range meat or organic beans. Ultimately, if you give people great-tasting food, they’ll come back. Our economic model allows us to invest a disproportionate amount in our food costs. We have a very efficient system: customers go through a single line, the people who serve you are the ones who make the food, and our menu board is not cluttered.