Chipotle Mexican Grill is going through a seriously rough public-relations patch of late due to a rash of food-borne illnesses linked to some of the chain's 2,000 stores, in a situation that holds important lessons about the changing nature and risks in today's food supply chain. Here are the key details of Chipotle's woes, as reported by the Washington Post:
Last month, Chipotle closed 43 restaurants in Washington and Oregon after health authorities linked an E. coli outbreak to six restaurants in the area. The announcement came as a shock to adoring fans of the fast food company—especially those living in the Pacific Northwest—but it was actually meant to help quell worries about food safety. After all, the company was going overboard, voluntarily shuttering dozens of restaurants when only a few had been implicated. The move, Chipotle insisted, came "out of an abundance of caution." Everything was going to be all right.
Except that it wasn't.
In the 31 days since, illnesses linked to the chain have been reported in seven more states, including Illinois, Pennsylvania, and Maryland, suggesting the problem was neither isolated nor a fluke. What's more, the avalanche of unfortunate news has yet to subside: On Monday, 30 students at Boston College fell ill after eating at a local Chipotle, leading the company to close yet another restaurant; On Tuesday, the number grew to at least 80 students. While Boston health officials believe the food-borne illness is norovirus—not E. Coli—and is isolated to a single location, they won't know for sure until test results are available in a few days.
Chipotle's response has been swift. The company, which has now closed dozens of restaurants around the country, is working to clean and sanitize its operations. It has also hired food safety consultants to improve its standards and assured its customers that it is doing everything it can to contain the outbreak. Just last week, it announced that it has revamped its food safety procedures by updated its supply chain and introducing DNA testing of its produce.
But the damage has been done.
POV: When Fresher Food Means Higher Risks
Chipotle's difficulties hold important lessons for supply chain leaders and CxOs in the food industry.
The chain is known for sourcing ingredients locally in the interest of freshness, a practice reflective of the overall "farm to table" movement in restaurants and grocery stores. "Fresh foods are becoming a huge component of grocery," says Constellation Research VP and principal analyst Guy Courtin. "What the unintended consequences of that will be is a much more stringent need to monitor the food supply."
"Because we're sourcing from smaller places—local farms—and we're probably sourcing from more of these places to get the volume we need, all of a sudden are we now potentially exposing our food supply chain to more of these outbreaks, or food-borne illnesses?" he adds. "It doesn't mean this can't happen when you source it from Kraft Foods, but I do think it's a perspective we need to be attuned to because of this movement toward freshness."
Compounding the issue is the fact that fresher food by nature is less processed or not processed at all. But one reason food is processed is to preserve it and make it safer from bacteria and other dangers, Courtin notes.
The freshness movement is also disproportionally important with regard to the branding and driving more revenue. "I might only source 10 percent of my stuff from a local farm, but if I'm pushing that freshness message to consumers as to why they'd want to come to my grocery store or my restaurant, one little hiccup like this, and all of a sudden everything else falls on its face."
Reprints
Reprints can be purchased through Constellation Research, Inc. To request official reprints in PDF format, please contact Sales.
