Chipotle has a problem as big as its famous overstuffed, lovingly-wrapped burritos.
In the wake of two years of negative headlines – dating back to the E. coli scare of 2015 that forced the company to stop selling pork products for months, and continuing on from incident to incident right through to a norovirus outbreak just last week – Chipotle is facing a massive brand crisis never before seen in the young company’s history, capping more than a decade of rapid expansion, high profitability, and profound customer loyalty with a dramatic fall back to Earth. It is almost Shakespearean that a company that built its entire public image around having fresh, healthy food – “Food with Integrity” was the slogan – would be brought low by a seemingly unstoppable barrage of health scares; no man born of woman could slay Macbeth, and Chipotle serves food made from only the best ingredients. But eventually, Birnam Wood will come to Dunsinane. It always does. Pride goeth etc. etc.
The story of Chipotle, up until the first E. coli outbreak, was one of triumph upon triumph. The chain burst out of Denver, Colorado and built a national empire within a few short years, to the point that Chipotles are as thick on the ground in Manhattan as Starbucks. With a delicious product, a unique aesthetic, and a strong social message that made its target crowd feel good about eating there over more traditional fast food, Chipotle pioneered the fast casual paradigm we’ve come to know and love. Suddenly, Chipotle was awash with cash, publicity, and goodwill, and used that to embark on massive growth, expanding from five-hundred restaurants in 2005 to over two-thousand – with almost five-hundred having opened in the last two years.
Perhaps you have noticed that, at the same time it was expanding its empire by over thirty percent, it was in the throes of a series of illness scares that was reaching a fever pitch. Perhaps you also have noticed that nothing in these outbreaks seemed to slow its expansion, which in fact has only accelerated. And perhaps you are wondering whether the two are related.
Nobody knows exactly where the E. coli and norovirus outbreaks are coming from, because they’re slow acting and hard to trace, but clearly something in Chipotle’s operation isn’t working, be it in-store cleanliness (which is itself an issue) or something deeper in the supply chain. You would think that a company like Chipotle, which has long prided (there’s that word again) itself on its material superiority to more traditional fast food fare, would have made locating and correcting these issues its singular focus, and perhaps slowed expansion while it ferreted them out instead of making its supply chain infinitely more interwoven and complex, thus rendering the problem even harder to pin down. It undercuts the image it wants to put out there, and more importantly, only underlines the fear that eating at Chipotle is a bit of a gamble. Say what you will; if McDonald’s isn’t making you vomit, it’s the better choice, no matter how fresh Chipotle’s ingredients may be. Queso be damned.
It’s hard to pin down, then, what exactly caused the problem, but it’s easy to show how badly the company has botched the fallout. By failing to visibly commit to safety – and by failing to successfully contain these sorts of decidedly off-putting infractions – Chipotle is only reinforcing the perception that it is not safe while continuing to expand at a truly breathless clip. The damage is done, and Chipotle’s brand has been hurt, perhaps irreparably. Which, interestingly, doesn’t seem to have affected its plans much at all.
But it should. Every new headline sends its stock price tumbling, lowering its capitalization, scaring away investors, and reducing its cash-on-hand. While there’s a case to be made the stock was overpriced anyway, there are real financial consequences for failing to act, or at least for failing to be seen as acting, so as to bring these problems to a halt.
Chipotle may well be reasoning that problems like the Boston norovirus incident are isolated and common enough in the foodservice industry as a whole. But while that isn’t incorrect, it’s also not especially helpful at rehabilitating the company’s image and prospects; restaurants may be full, but a collapse in investor confidence would be enough to send the beloved burrito chain into a death spiral, and to date, the company has not adequately reassured investors it has any idea how to address these issues.
Getting super hardcore about employee cleanliness is one thing; communicating publicly, frequently, and in detail about the steps you’re taking every day to improve store sanitation and fix your supply chain problems in every single piece of earned media you have is something else entirely – and it’s not what Chipotle has been doing to date.People are freaked out, and the company has failed to change the story from “Chipotle is potentially unsafe” to “Chipotle is always working to ensure cleanliness and safety.” Successfully navigating to that story would let Chipotle recontextualize its ongoing incidents – and rightly so! – as the sort of things that happen to any foodservice company that sells tens of thousands of meals every day. Foodborne illness is a part of life we can hedge against but never entirely eradicate, and that’s doubly true in fast food.
Chipotle is in a better position than a lot of companies facing tough times; business hasn’t slowed, and the average customer isn’t even terribly worried, which separates it out from companies like United Airlines or Comcast, which are famous mostly for being terrible. There’s still enormous opportunity for it to restore its luster; people want to like Chipotle. I want to. That level of customer generosity is one of its most valuable assets and something it can and must continue to leverage as it moves forward into damage control, coupling strong messaging about the concrete improvements it’s making with free burritos to keep people coming into its restaurants while taking a deliberate, if temporary, hiatus from further expansion to investigate its supply chain.
That’d go a long way towards reassuring people that the famed Mexican Grill takes “food with integrity” seriously, and that all the customer goodwill it has accrued over the years wasn’t wasted on what was ultimately another hungry, uncaring enterprise. From day one, it has been posturing itself as the anti-McDonald’s. Now’s the time to live it.
Originally Posted on HuffPost.