This is the second major E.coli outbreak that has plagued Chipotle in just 2 months, with several other food contamination cases in the last 6 months. Chipotle’s position highlights are larger issue with sourcing of local produce and the incidence of bacteria and other microbes being present. Chipotle’s reaction should be applauded though we will see if they will be able to shift back towards local ingredient sourcing once the problems are identified and addressed.
Julie Jargon (12/16/2015)–Chipotle Mexican Grill Inc. has touted its use of local ingredients and fresh produce to help differentiate it in a crowded fast-food market. Now a string of disease outbreaks is forcing the once-scrappy upstart to act more like the big chains it long has derided.
Chipotle expects to lower its use of locally sourced ingredients and is centralizing the preparation of some vegetables as it seeks to shore up food safety following an E. coli outbreak that sickened 52 people in nine states and a norovirus episode in Boston. The burrito chain hopes the steps can help it regain consumers who have shunned its outlets, eroding sales.
Health officials haven’t been able to identify the source of the E. coli outbreak but say produce was the probable cause.
At an investor conference in New York last week, Steve Ells, founder and co-chief executive of Chipotle, described the chain’s new practice of dicing, sanitizing and hermetically sealing tomatoes, cilantro and lettuce in a central kitchen where they are tested for microbes and then shipped to restaurants.
Mr. Ells said the extra steps don’t change the quality of the ingredients and that whole avocados and jalapeños will continue to be brought into the restaurants. The new techniques minimize the number of people and surfaces coming into contact with the ingredients.
“You could bring fresh cilantro right out of the field into the restaurant and wash it there. I don’t think that would be any better than washing the cilantro in the commissary,” Mr. Ells told investors. “And if dried properly and then sealed in the bags, it’s a delicious product.”
Chipotle said it has long used pre-washed cilantro in its restaurants.
Mr. Ells apologized for the outbreaks on NBC’s “Today” show last week and said Chipotle is trying to make sure they don’t happen again. “I’m sorry for the people who got sick. They are having a tough time, and I feel terrible about that,” he said.
Chipotle had moved away from centralized produce preparation for taste reasons. For many years, the Denver company chopped and washed tomatoes in a Chicago kitchen and shipped them to restaurants in bags. Last year, it began chopping them at its restaurants in dicing machines, because executives said they tasted better when prepared on-site.
“They are still the same tomatoes, they are simply cut, washed and packaged before they get to our restaurants,” Chipotle spokesman Chris Arnold said. “Any difference in taste would be slight, if even perceptible,”
“Produce is the leading vehicle of single-source food-borne outbreaks in the U.S. Even if the contaminant was something else, like a spice, they still need to get it right with produce,” said Michael Doyle, director of the Center for Food Safety at the University of Georgia.
Chipotle has experienced five disease outbreaks since July, including a salmonella outbreak involving tomatoes that sickened 64 people in Minnesota.
The company has warned its fourth-quarter earnings would fall well below analyst forecasts and its same-store sales would drop 8% to 11% because of the incidents.
It isn’t clear which restaurants may be benefiting as Chipotle loses customers. A spokeswoman for restaurant-consulting firm Technomic Inc. said direct Chipotle competitors such as Qdoba Mexican Grill or Moe’s Southwest Grill may benefit, but upscale burger chains like Smashburger that offer fresh, made-to-order foods also tend to attract similar customers and may get a sales lift.
Melissa Arnoff, a senior vice president at crisis-management firm Levick, said Chipotle’s safer practices might actually create a new problem for the company by turning off customers who like watching their food being prepared in front of them. “Hermetically sealed tomatoes are 180-degrees from the image they want to portray,” she said.
“Our commitments to better ingredients—including meat raised without antibiotics, pasture-raised dairy, and local and organically grown produce—have not changed. None of the plans and programs we are putting in place call for diminishing the quality of ingredients we use,” Mr. Arnold said.
Though there is no evidence that Chipotle’s multistate E. coli outbreak originated with a local supplier—and it likely didn’t, given that people from Oregon to New York got sick—, some smaller farmers Chipotle has long praised may be unable to keep supplying the chain if they can’t implement the kind of sophisticated pathogen testing it now is requiring.
Chipotle, which has nearly 2,000 restaurants, has talked up its local growers ever since it began the sourcing program in 2008. By 2010, the company said it was buying more than 50% of at least one ingredient locally throughout the country, although it initially referred to “local” ingredients as those sourced from within about 200 miles of its restaurants and now defines as local those grown within 350 miles.
Until last week, Chipotle hadn’t disclosed the percentage of its produce that is locally grown, but Mr. Ells told investors that the total amount of locally grown produce Chipotle buys in a given year amounts to just about 10%—a figure that is likely to decrease, Mr. Arnold said.
The spate of disease outbreaks marks something of a comeuppance for a company that has satirized so-called factory farms in its marketing, criticizing their mechanized growing practices, as well as fast-food chains for using preservatives. In October, Chipotle produced a fake commercial in which a customer walks into a fictitious restaurant chain named “Cheapotle,” where she finds a slew of artificial ingredients going into her food.
Choosing how to communicate its food-safety changes poses a dilemma for the company that wants to assure customers that its food is safe without alienating those who share its “food with integrity” ideals.
Executives recently told investors that they will wait until the Centers for Disease Control and Prevention declares an end to the E. coli outbreak before launching an ad campaign about Chipotle’s food-safety steps.
Until that happens, once-loyal customer Sergio Pereira won’t return.
“With all the food poisonings there, I haven’t been to a Chipotle in the last three months and I won’t let anyone in my family go, either,” said Mr. Pereira, the 54-year-old president of Quill.com, a division of Staples Inc. He added that if Chipotle told customers they are sanitizing produce off-site, it would help give him the confidence to return, but that he still wants to know more.
“The company needs to rebuild trust and they need to tell people that they’ve made very concrete changes,” he said.
(via The Wall Street Journal @Yahoo! News)