Chipotle

How bacteria are killing Chipotle’s brand promise

By Tina Irgang

Every once in a while, we all get to see a highly visible, extremely popular brand go up in flames. It seemed to happen a lot this year (think VW or, to a lesser extent, Subway), but none of those previous implosions moved to the top of our social media queues quite like the Chipotle food safety scandal.

What had seemed to start as a regional issue in the Pacific Northwest quickly spiraled into national news, as Chipotle patrons in nine states became exposed to E.coli bacteria. And then it got worse, as more than 140 students at Boston College reported getting sick – apparently as the result of a norovirus contamination also traced back to Chipotle.

This would be a problem for anyone, but it’s especially bad for Chipotle, whose very brand promise is in question, as The Washington Post’s Wonkblog notes: “The food scare jeopardizes Chipotle’s reputation as a purveyor of high-quality food, which has, at least until now, helped propel the brand into a model for the rest of the industry.”

Earlier this year, environmental news site EcoWatch was one of many who cited Chipotle as apparently irrefutable proof that sustainable sourcing can be made profitable on a large scale. The article also notes that Chipotle received positive publicity for its decision to remove pork from many of its restaurants because suppliers weren’t complying with certain humane guidelines.

But now, Chipotle’s well-publicized responsible sourcing, arguably one of its biggest competitive advantages, is in question. “Chipotle’s reputation is perhaps more at risk than most in the fast-food industry because the chain has promised that it adheres to more-rigorous standards for procuring and serving its food,” another Wonkblog post notes. “Now, industry experts warn it could face a permanent red mark even if the latest spate of setbacks proves temporary.”

As Chipotle’s stock and sales have plummeted, how has the company’s leadership fared? It’s a mixed bag, to hear Fortune tell it. Monty Moran and Steve Ells, the company’s co-CEOs, have taken rather different approaches. Moran seemed to blame the Centers for Disease Control and Prevention and the media for the situation: “It’s been fueled by the sort of unusual and even unorthodox way the CDC has chosen to announce cases related to the original outbreak in the Northwest,” Fortune quotes.

Ells, on the other hand, went on the Today show and apologized, promising to put policies in place that would make Chipotle “the safest place to eat.” Fortune notes: “That statement is a high-stakes gamble that will make any future food-safety problems far worse than past ones. But it’s the right way to go. And the stock jumped 5 percent.”

Here’s the thing: MarketWatch points out that hundreds of people were sickened by Chipotle E.coli and salmonella outbreaks as far back as last summer, but the outbreak received little notice beyond local media reports. When pressed about those outbreaks, Chipotle called the incidents small in number and isolated, MarketWatch reports.

By now, Chipotle’s problems are neither.

Tina Irgang is the production editor for SmartCEO. Contact her at tina@smartceo.com.