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Moe's Southwest Grill calls Chipotle's new cheese dip a 'queso imposter'

  • Moe's Southwest Grill took aim at Chipotle after the chain began selling queso dip at its test kitchen in New York City.
  • Chipotle has long avoided serving queso at its chains because of its "food with integrity" pledge, which promises that its menu items will not contain artificial flavors, colors or preservatives.
  • Moe's is offering diners who tasted its rival's cheese dip a free cup of its queso with any purchase at its Avenue of the Americas location on July 13.
Moe's Southwest Grill Famous Queso.
Source: Moe's Southwest Grill
Moe's Southwest Grill Famous Queso.

Moe's Southwest Grill is feeling saucy.

The fast casual Mexican chain called out Chipotle Mexican Grill after Chipotle began selling a queso dip at its test kitchen restaurant in New York City on Monday.

"These queso impersonators are claiming to serve the perfection that is smooth and delectable queso, attempting to fool consumers across the nation," the company said in a statement Wednesday.

Chipotle has long avoided serving queso at its chains because of its "food with integrity" pledge, which promises that its menu items will not contain artificial flavors, colors or preservatives. In a since deleted video, Chipotle said that queso is "made with artificial stabilizers to keep its shiny liquid form."

"Chipotle management has noted that queso has been the most requested item not currently on the Chipotle menu," Jeffrey Bernstein, a Barclays analyst, wrote in a research note Tuesday. "CEO [Steve] Ells noted in an internal memo to employees yesterday that 'all of our competitors sell queso, and we know some customers don't come to Chipotle because we don't offer it'."

Chipotle's queso is currently only available at its test kitchen in New York.

"We'll certainly share more if we opt to expand the test to other restaurants or markets," Chris Arnold, Chipotle's spokesman, told via email CNBC.

Many who have tasted Chipotle's Texas-style queso, which contains no added flavors, colors, gums or other industrial additives, called the dip "grainy" and noted that it doesn't offer an Instagram-worthy "cheese pull." However, many applauded it for its smokey taste.

"When we caught wind that there were poser cups of queso on the loose, we decided to act fast," Bruce Schroder, president of Moe's Southwest Grill, told CNBC.

Moe's seized the moment to poke at its rival by offering diners who tasted Chipotle's cheese dip a free cup of its queso with any purchase at its Avenue of the Americas location on July 13.

"While Chipotle will always have its diehards, creating some new excitement around the menu is really important to increase the appeal to the 'casual fan' and to create some new buzz," David Henkes, principal at Technomic, told CNBC via email. "I do think this will create a bump for them, but at this point it's really just catching them up to what many of their competitors already offer."

Barclay's Bernstein said that Chipotle's queso test could be, at best, an overdue innovation that could generate interest among new and lapsed customers and, at worst, an act of desperation that indicates that the chain is still facing challenges in revitalizing its brand.

"The question remains whether these new menu items will prove successful long-term," he said.

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