While its food safety issues have yet to be officially resolved, and may never be, Chipotle boldly asserts it will reboot its staff along with new safety protocols to win back customers after the recent outbreak of E. coli and a norovirus that sickened more than 500 customers and briefly closed 53 stores in nine states in late 2015.
While some of the measures -- at least on the scale that the burrito king says it is implementing -- may be unprecedented, one has to ask: Why wasn’t management doing this all along? Why did the inherent risks of sourcing ingredients and their marketing value outweigh food safety?
The answer to that, of course, is: Because they didn’t have to, until now.
Will it be enough?
We’ll get the answer to that question as Chiptole charts its hoped-for recovery, which it outlined for investors last week in Orlando, Florida. There, founder and co-chief executive, Steve Ells, pretty much admitted there’s been room for improvement on safety. He said the company wants to be seen as “in front of food safety as we are in sourcing our ingredients.”
At the center of their refreshed food safety practices are two distinct measures:
At one point during the investor conference, Ells declared “Chipotle is as safe as ever” in its efforts to reduce the risk of foodborne illnesses to “near-zero.” But later he acknowledged the ‘bar’ keeps rising.
“We’re continuing to roll things out,” Ells said. “I don’t think we’ll ever be finished. We’re always looking for opportunities to become safer.”
To help prove his point, Chipotle is briefly closing its stores on Monday, Feb. 8, for several hours to link up via satellite as many of its 60,000 employees as possible. There executives will spell out why customers should give it another chance.
“I’m sure that event will get covered (in the media),” Ells said. It will be a very public type of meeting.”
Enabling the media and perhaps the public to listen in would be a bold public relations tactic. But it’s not without some risk.
What happens if an employee asks a question executives would rather take privately? What happens if there is another outbreak? Coaching thousands of employees ahead of time can only prepare them to a certain degree.
Scientists and other experts at the Centers for Disease Control and Prevention (CDC) in Atlanta have been investigating the e.coli outbreak since its inception. While the norovirus incident was attributed to a sick employee, the causes of the e.coli outbreak are still proving difficult to pin down.
Company executives signaled in December it would wait for an “all-clear” from the probe. But with it still underway, any such green light may never come. That leaves the company with no choice than to forge ahead on its own, especially in light of how its stock price fell back from a record high and sales plummeted.
The last outbreak was reported Nov. 27.
Late Friday, the CDC responded to this writer’s request for any updates and stated: “Foodborne disease outbreak investigations can take varying amounts of time. There have not been any recently reported illnesses in either outbreak (e.coli or norovirus), and that gives us some information to indicate that the outbreak may be nearing an end, however the investigation is still ongoing.”
Matthew Wise, who leads the CDC response team, told the Wall Street Journal he was surprised to hear Chipotle say that it’s close to calling an end to the outbreak. “This is one of those outbreaks that has been a real challenge,” he told the Journal. “We can’t cross anything off the list.”
Will the source of the outbreak ever be identified? According to Dr. William Schaffner, an infectious-diseases specialist at Vanderbilt University Medical Center, probably not.
As TriplePundit reported on Jan. 5, a food industry blogger asserted that Chipotle might be the victim of a deliberate bid to tarnish the growing natural food movement. But no evidence has surfaced to substantiate the claim.
Guiding the management team along the way has been Dr. Mansour Samadpour, a Seattle-based food safety consultant. Ells and his colleagues tapped into Samadpour’s apparent high-standing during the investor presentation to buttress their safety overhaul. Whether that means anything to customers who aren’t eating at Chipotle now remains to be seen.
In early December, he told Food Safety News: “I was asked to design a more robust food safety program to ensure the highest level of safety and the best quality of all meals served at Chipotle.”
Some customers at Chipotle restaurants not affected by the outbreak may continue to eat there as if nothing happened. Several customers surveyed at a store in Leesburg, Virginia, last week (photo) and who said they were aware of the outbreaks opined that Chipotle now, probably, is safer than before because of the steps it is taking.
In the ever-expanding space more food retailers are striving to carve a niche in, Chipotle’s response could become a defining case study for how to transparently marry food safety with nutrition and corporate responsibility, all while enduring a significant crisis.
In addition to the satellite meeting, Chiptotle executives told investors they will execute marketing campaigns including traditional advertising and direct mail. Part of that campaign will be a “detailed story of what happened” and “what we’ve done about it to make sure it doesn’t happen again.”
There are at least two other challenges facing the company.
First, the U.S. Attorney’s Office for the Central District of California, in conjunction with the Food and Drug Administration’s (FDA) Office of Criminal Investigations, slapped the company a subpoena January 6 in a federal probe concerning the outbreak of norovirus cases at the firm’s restaurants in California. Chipotle was asked to produce a “broad range of documents.”
Neither the FDA nor the U.S. Attorney’s office have said anything since announcing the probe other than to explain “When foodborne illness outbreaks occur, the FDA works closely with other federal and state agencies and other health officials to identify the source, ensure that companies are removing foods from the marketplace, and communicate with the public.”
Second, a shareholder named Susie Ong filed a class-action civil lawsuit against the company in U.S. District Court in New York, according to Law360. It claims investors were not informed that Chipotle’s “quality controls were inadequate to safeguard consumer and employee health.”
Chipotle’s stock price has been as high as $758.61 per share over the past year. It dropped more than 40 percent in early January and recovered to $475.94 before the Martin Luther King holiday weekend.
Adding up all of these challenges, as Chief Financial Officer Jack Hartung acknowledged at the presentation, “We’re not going to the efficient business model that everyone has come to know … Our margins are going to suffer … The most important thing we can do to get our margins back is bring our customers back in.”
Co-CEO Ellis said: “I have confidence we are going to win our customers back and will emerge a much stronger company,” Ells said at the investor conference. Go here for a recording of the conference by Wall Street Webcasting.
Image credit: Jim Pierobon
Clean energy advocate, strategic marketer and story teller with 15+ years supervisory experience and a proven track record achieving strategic and program objectives for energy, utility, technology and other clients in their marketplaces and policy arenas while engaging their priority stakeholders and target audiences. I'm always on the lookout for innovative policies, people, technologies and businesses that are demonstrating how sustainability can be both healthy and profitable. Catch my blog posts at TheEnergyFix.com. I've also written for The New York Times, Houston Chronicle, The Huffington Post and TheEnergyCollective.com.