After Chipotle Outbreaks, Will 'Food With Integrity' Still Resonate?
Chipotle Mexican Grill is struggling to convince its customers it's a safe place to eat, after several outbreaks of foodborne illnesses have sickened hundreds of its customers. But no one thinks the task is going to be easy.
"This is a fairly significant problem for Chipotle," Timothy Calkins, clinical professor of marketing at Northwestern University's Kellogg School of Management, tells us. While customers are often quick to forgive companies for transgressions, that may not be the case this time, he says.
"The difficult thing for Chipotle is that, it's not that there was one incident. There have been a number of different incidents," he says. "And the problem with that is that it creates an overall perception, and it raises questions about safety."
The once-high-flying restaurant chain has been hit with two separate outbreaks of E. coli over the past three months. The larger one sickened 52 people in October, mostly in Washington and Oregon, according to the Centers for Disease Control and Prevention. A separate outbreak in November sickened five people in Kansas, North Dakota and Oklahoma, the agency said.
In December, scores of students at Boston College fell ill after eating at a nearby Chipotle, an outbreak the company said was due to a norovirus, which causes vomiting, nausea and diarrhea.
And in August, a salmonella outbreak in Minnesota sickened 64 people who had eaten at Chipotle. The state's Department of Health later linked the illness to tomatoes served at the chain.
Founded in Colorado more than two decades ago, Chipotle has enjoyed rapid growth by positioning itself as a healthy, fresh alternative to traditional fast-food chains, a company that serves "food with integrity."
"To eat at Chipotle was sort of the ethically and ecologically right thing to do, which resonated with a great deal of customers," says Andrew Alvarez, an analyst at IBISWorld, a market research firm.
The multiple outbreaks of foodborne illnesses have struck at the very heart of that image, says John Stanton, professor of food marketing at St. Joseph's University in Philadelphia.
"They've kind of positioned themselves as a special company that caters to the fresh and delicious product, etc., and they've let people down. And when you let people down, they take that pretty seriously," Stanton tells us.
The bad publicity has taken a toll on the bottom line at the company, which has warned that its sales fell in the last quarter of 2015. Once a darling of Wall Street, Chipotle's stock fell 30 percent last year, and the company says its sales have fallen by as much as 11 percent.
Chipotle has responded by promising to become an "industry leader in food safety." A press release promised more stringent testing of produce, better training of employees and "continuous improvements throughout its supply chain, using data from test results to enhance the ability to measure the performance of its vendors and suppliers."
The company's founder and CEO, Steve Ells, also apologized for the outbreaks in a Dec. 10 interview on NBC's Today show:
"It was a very unfortunate incident, and I'm deeply sorry this has happened, but the procedures we're putting in place today are so above industry norms that we are going to be the safest place to eat."
But a message of contrition could be hard to sell to customers, Stanton says.
"I mean, my first question, as soon as they said that, was why didn't they do that originally? I mean, they obviously weren't doing all they could to make their products safe, and they're now paying a price for it," he says.
Northwestern's Calkins says companies can eventually recover from public relations disasters such as this one. Chipotle first has to discover the source of the recent outbreaks, he says.
Once it does, Calkins says, "they need to get out there and get people feeling good. They've got to invest a lot in advertising, so that when people think about Chipotle, they're not thinking about food safety. They're thinking about that great brand, and the food they love so much."
Calkins says other companies, such as Toyota, have come back from big public relations disasters, so it is possible. But he says it will take time for Chipotle to crawl out of the hole it has stumbled into.