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    How to Prevent Another Chipotle

  • What went wrong at the fast-casual leader, and how foodservice operators committed to fresh and local ingredients can ensure it doesn’t happen to them.

    flickr / Aranami
    Since suffering E. coli and norovirus outbreaks last year, Chipotle hasn’t had the long lines it had become known for as one of the most popular U.S. fast casuals.

    Since opening its first restaurant in Denver in 1993, Chipotle Mexican Grill has redefined the world of limited-service dining. Its “Food With Integrity” focus ushered in a new wave of consumer demand for foods deemed fresher and more wholesome—even if equally as calorie-dense—than the ingredients at the fast-food giants it battled for market share. And the brand is widely credited as one of the most influential trailblazers of the fast-casual dining segment.

    But a series of foodborne illnesses linked to various Chipotle stores has raised fundamental questions about the company’s supply chain, in-house training, and culture around food safety. After all, of what benefit are ingredients like organic veggies, responsibly raised pork, or antibiotic-free chicken if they aren’t safe for consumption?

    Chipotle’s outbreaks have led many to believe that the brand’s focus on wholesome, simple ingredients belies a slew of operational challenges associated with its labyrinth supply chain of small farms and suppliers. Now, many are left wondering: Is it possible to scale a brand built around fresh, locally sourced foods?

    “It stands to reason that, regardless of industry or company, the more you proliferate suppliers, the harder it is to maintain quality,” says Jeffrey Karrenbauer, president of supply chain consultancy Insight Inc. “Obviously there’s this great marketing appeal—freshness, local, organic—and you and I and the public don’t tend to see that message and think, ‘They’ve got a big management challenge.’ There, the marketers may have won the challenge too quickly.” 

    As Chipotle looks to rebound with investments in a

    range of new safety measures, diners and safety experts alike are questioning just how things got so bad at a brand built on the integrity of its ingredients.

    In addition to serving as a case study for other operators, experts say the various outbreaks linked to Chipotle raise underlying questions about the viability of its model and the number of fast-casual concepts that have similarly constructed their identities around fresh and locally sourced ingredients.

    Russell Walker, clinical associate professor at the Kellogg School of Management at Northwestern University, couldn’t help but think about Chipotle as he waited in line during a recent visit to a Chicago-area fast-casual pizza concept.

    “I thought, ‘If I ran this chain, this experience at Chipotle should be a major wake-up call,’” he says.

    As part of its new food safety measures, Chipotle announced it would relocate the preparation of some ingredients to central kitchens, which Walker sees as a sign that Chipotle’s highly localized sourcing model might not function well on a national scale.

    “To what extent can highly localized sourcing be scaled? Chipotle is basically saying it can’t be scaled. They’re going to take that over and centralize it,” he says. “If you are running one of these Chipotle-like businesses, I think you’re going to find the procedures are very unwieldy.”

    Walker thinks Chipotle’s reaction may even undermine its core concept. By blanching, chopping, and sealing some ingredients like tomatoes in central locations before sending them off to stores, Chipotle has begun to resemble the national distribution models of the massive restaurant chains it originally sought to repudiate, he says.

    “I’ve got to believe that’s going to impact the taste,” Walker says. “That’s to me suggesting that Chipotle didn’t feel comfortable administering a procedure at all of their sites. And that’s a big move with big implications.”

    Many have hypothesized that Chipotle’s rocketing growth could have played a role in its food-safety crises. In little more than two decades, the storied chain grew to nearly 2,000 locations. Walker, who studies operational risks, says such rapid growth may have caused the company to lose some control of operations at the store level.

    Of course, many other restaurants have weathered storms of foodborne illnesses. But Chipotle’s woes stand out for both the scale and variety of the problems.

    There was the incident where hundreds of Chipotle customers contracted norovirus in Simi Valley, California, in August, and then the one where dozens more were afflicted with the same virus after eating at a Boston location in the fall. Nearly 50 customers contracted salmonella in September in an outbreak traced back to tomatoes at 17 Chipotle stores in Minnesota.

    And in possibly the biggest blow of all, the company voluntarily closed 43 restaurants in Washington and Oregon in early November after dozens of customers became ill with E. coli. By late January, federal officials said the outbreak stretched coast to coast across 11 states. A separate strain of E. coli was traced back to Chipotle restaurants in Kansas, North Dakota, and Oklahoma.

    In all, nearly 500 people were sickened after eating at various Chipotles, Food Safety News reported.

    “I don’t know if anybody knows exactly what went wrong. Given the fact that they had multiple foodborne illness outbreaks in such a short timeframe, a lot went wrong,” says Francine Shaw, president of Food Safety Training Solutions. “I think more than likely the crux of the issue is that at least on some level, there was a lack of training across the board. Because it wasn’t at just one location.”

    While foodborne illness outbreaks linked to restaurants are sometimes tracked to specific suppliers, Shaw says, the geographic spread of Chipotle outbreaks (along with its localized supply chain) implies that its issues had festered at the store level.

    She found the spread of norovirus especially egregious given how easy it is to combat.

    “That’s training people not to come to work when they’re sick, to wash their hands. Those are just the very basics,” Shaw says. “I think Chipotle got so focused with the ‘Food With Integrity’ campaign that they lost track of food safety in general.”