Chipotle is quickly finding out that it can’t offer “food with integrity” if it doesn’t offer “food with safety.” Its brand is imperiled by the ongoing E. coli crisis at a handful of its locations across the country, and the emergent question is not whether Chipotle has turned the corner but rather how much worse can it get?
The company’s restaurant traffic and share prices have both taken a big hit, and that’s only in areas that are quantifiable. In fact, while it got a later start, Chipotle’s reputation crisis is unfolding on a somewhat parallel track with Volkswagen’s Dieselgate debacle.
For now, there are two strong dynamics driving Chipotle’s still-developing crisis. The first is that Chipotle is still scrambling to contain the damage to the brand and to the chain’s customers—all while the US Centers for Disease Control and Prevention investigates another E. coli outbreak affecting 52 diners across North Dakota, Kansas and Oklahoma as well as 140 diners in Boston who came down with a gastrointestinal norovirus.
CEO Steve Ells published an open letter in national print advertisements, has appeared on television, done print interviews, apologized on Chipotle’s website and vowed that the chain, now, will become the absolute leader in food safety. Among other things, Chipotle will take more processing steps in the restaurant to kill off any latent bacterial threats and will rely less on local suppliers, many of whom can’t comply with sophisticated testing.
"Nothing is more important to me than serving my guests food that is safe” -Chipotle founder Steve Ells https://t.co/JmP72mL631
— Chipotle (@ChipotleTweets) December 16, 2015
“They’re trying to be a big chain acting small,” former McDonald’s CMO Larry Light told CNBC. “Given its size, [Chipotle has] got to become more like a typical fast-food chain.”
But the Ells’ handling of the PR crisis isn’t being well reviewed. For one thing, as Bloomberg notes, Ells didn’t address on a Today Show appearance on December 10 why a company that had challenged quality standards with such gusto hadn’t taken on safety standards as well. And even as he didn’t proactively address such obvious questions, Ells seems to have pivoted too easily and quickly from the still-unfolding crisis to Chipotle’s sudden new determination to become the industry leader in food safety.
“To hear Ells tell it,” reports Bloomberg, “the company is witnessing an outbreak of excitement” by suppliers and employees about coming up with and enforcing abrupt new safety standards—not experiencing horror at how bad things had to get in the first place.
In any event, the second important dynamic is that even if Chipotle somehow can quickly arrest further outbreaks with these steps and others, the question remains whether it will be able to reverse the substantial damage to its brand.
Already, there’s an understandable amount of Schadenfreude being enjoyed by executives and employees of quick-serve restaurant brands that Chipotle has attacked for enabling “factory farming” in its animated videos about the “utterly unsustainable world of industrial agriculture.”
“Smugness and happy talk about sustainability aren’t working any more,” snarked a headline on Bloomberg.
Among other reasons, as a Wall Street Journal editorial pointed out, one reason chains such as McDonald’s have used economies of scale is to deliver safer food at a lower price. In its zeal to tout the “food integrity” from local sourcing of many of its raw materials, Chipotle has given up on both the low prices as well as the notion that making its food safe is more important than ensuring it comes from the farm down the road. Still, at peak season, maybe only 10 percent of Chipotle’s produce supplies are locally sourced, and the chain relies greatly on massive national suppliers.
But as Light pointed out to CNBC, changing its approach could put the brand’s reputation at risk, too.
And what about the Chipotle customer?
“I trusted they were providing me with ‘food with integrity,'” one of the victims of E. coli poisoning told Bloomberg. “We fell for their branding.” He reported that at least one restaurant in Portland, Ore., where he lives, put up a note that said, “Don’t panic … order should be restored to the universe in the very near future.” He told Bloomberg, “That felt so snarky. People could die from this, and they were so smug.”
Following is the text of Steve Ells’ letter posted on Chipotle’s website:
As a chef, nothing is more important to me than serving my guests food that is safe, delicious, and wholesome. From the beginning, all of our food safety programs have met or exceeded industry standards. But recent incidents, an E. coli outbreak that sickened 52 people and a norovirus outbreak that sickened approximately 140 people at a single Chipotle restaurant in Boston, have shown us that we need to do better, much better.
The fact that anyone has become ill eating at Chipotle is completely unacceptable to me and I am deeply sorry. As a result, we are committed to becoming known as the leader in food safety, just as we are known for using the very best ingredients in a fast food setting. I want to share with our customers specifics about some of the significant steps we are taking to be sure all of the food we serve is as safe as it can be.
To achieve our goal of establishing leadership in food safety, we collaborated with preeminent food safety experts to design a comprehensive food safety program that dramatically reduces risk on our farms, throughout the supply chain, and in our restaurants. The process began with a farm-to-fork risk assessment of every ingredient and all of our restaurant protocols and procedures.
Throughout our supply chain, we are implementing high-resolution sampling and testing of many of our ingredients to prevent contaminants, including E. coli, from getting into our restaurants. Testing of this kind is unprecedented in the restaurant industry because of the large number of samples tested. We are also working with our supplier partners to further enhance their food safety programs.
We have also designed many improvements within our restaurants to ensure our food is as safe as possible. This includes the introduction of additional microbiological kill steps to eliminate microbial risk. Additionally, we are rolling out new sanitation procedures in our restaurants and implementing additional food safety training for all of our restaurant employees. More information about these changes is available at chipotle.com/foodsafety.
In the end, it may not be possible for anyone to completely eliminate all risk with regard to food (or from any environment where people congregate), but we are confident that we can achieve near zero risk. Chipotle is an incredibly focused company. Our menu has remained virtually unchanged for the last 22 years and we only have 64 ingredients in our food. Rest assured that we have looked at each of these ingredients, where they come from and how they can be made even safer. I believe our restaurants are safer today than they have ever been.
The last 22 years have been an incredible journey and we are not going to shy away from this new challenge. I’d like to take this opportunity to apologize on behalf of all of us at Chipotle, and to thank our loyal customers who have stood by us through this difficult time.
Founder, Chairman, and Co-CEO