Last night’s edition comes via Weekend Update on Saturday Night Live (4:37 of the below clip).
Yup, food poisoning is always worth a chuckle. Nothing like a public health folk out there laughing at all the people barfing and undergoing organ transplants, if they’re not already dead.
But Chipotle, in its fourth makeover since hundreds got sick dating back to Nov. 2015, has decided that Jeffrey Tambor is best to persuade the gullible public that, once again, Chipotle’s food is made with integrity?
According to Austin Carr of Fast Company, it’s Chipotle’s biggest ad campaign yet. And depending on how you count, it’s also its third or fourth major brand rehabilitation experiment in the year and a half since its food-safety incidents first emerged. That speaks to the sizable challenges Chipotle is still facing as it seeks to recover its once-roaring restaurant sales—all while moving the conversation around its brand away from food safety.
But the conversation should all be about food safety.
Chipotle can’t make food safety the central point of its marketing, but it also knows that any initiative to tout its improvements or resell its brand will be viewed through the lens of its food-safety woes. “It’s a big marketing challenge,” Chipotle’s chief development officer, Mark Crumpacker, told me late last summer. “When you’re excited to go out to lunch, you’re not like, ‘Let’s go to the safest place!’”
Go do some more coke, aptly named Crumpacker.
The new web and TV spots, rolled out Monday, feature comedians Jillian Bell, John Mulaney, and Sam Richardson, who are shown in separate ads entering a house-size burrito where Tambor’s voice instructs them to “be real” because, well, “everything is real” inside a Chipotle burrito. The comedians proceed to make comical confessions, and the ads each end with a new Chipotle motto, “As Real As It Gets,” an apparent reference to the company’s recent strides in removing artificial flavors and preservatives from its ingredients.
Chipotle, instead, has initiated a significant number of changes to its food-safety program, but it has been more strategic about informing customers about them. “Our food safety is not something that I expect to drive lots of people into the restaurant, but I do think it might erase some people’s doubts and allow future marketing to be met with less objection,” Crumpacker said at the time.
Is Chipotle at the point yet where new efforts will be greeted with less cynicism? It’ll likely take another quarter before we’ll see if the campaign has an impact on sales. For now, Chipotle will have to depend on Jeffrey Tambor and company to convince shareholders that there’s always money in the burrito stand.
But, hey now: you judge.
Rather than focus on the things that make people barf – which Chipotle should know all about – they are now claiming it is the only national restaurant brand without added colors, flavors or preservatives on its entire menu.
“We never resorted to using added colors or flavors like many other fast food companies do simply because these industrial additives often interfere with the taste of the food. However, commercially available tortillas, whether they are for us or someone else, use dough conditioners and preservatives.”
Chipotle now says it uses only local and organically grown produce as well as meats from animals raised without hormones or non-therapeutic antibiotics. None of the 51 ingredients in the restaurant’s foods have been genetically modified but the company still sells soft drinks that contain GMO-containing ingredients.
The company has even released a visual ingredient statement – allowing customers to see exactly what’s being used to create their Chipotle dishes.
Like many other food safety types, I will continue to avoid. Chipotle’s emphasis on marketing bullshit – 21st century snake-oil — rather than safety shows how much they have jumped the shark.
If Chipotle thinks corn, or any of their other ingredients, isn’t genetically modified, then they’re drinking their own jello.
It’s the super happy holiday version of Food Safety Talk. Don and Ben chat about Christmas movies, gambling as children and other holiday traditions. Making appearances in the guys’ discussion are Twitter and posting great questions of regulators about poor recall notices; cooling and holding cous cous and regulatory interpretations of time as a public health control; norovirus outbreaks at schools; and, Chipotle’s food safety culture.
Links so you can follow along at home:
A shake-up is happening at the at the top of our ever-favorite, Chipotle. Co-chief executive Montgomery Moran is out while the other co-chief Steve Ells, the perfectionist and touch-for-doneness guru remains.
According to the New York Times, the change is food safety-driven.
The food safety crises that have battered the once high-flying Chipotle Mexican Grill over the last year are now taking a toll on its executive suite.
Montgomery F. Moran, a co-chief executive who has long presided over the company’s operations, will step down early next year, the company announced Monday morning. It also said it would be changing the board.
“We all agreed that one C.E.O. will serve the company better,” Steve Ells, Chipotle’s founder and other co-chief executive, said in a telephone interview. “The board decided that one C.E.O. would be me, and I’m looking forward to a continued friendship with Monty.” The company declined to make Mr. Moran available for comment.
Shares have fallen more than 30 percent in the last year. Late Monday morning, after the executive change was announced, shares were up about 3 percent, to about $380 a share.
Chipotle is also dealing with an activist investor in William A. Ackman, whose Pershing Square Capital Management disclosed in September that it owned a 9.9 percent stake in Chipotle. Chipotle and Pershing Square have described their interactions as “cordial” and productive. Pershing Square declined to comment on Monday.
Mr. Ells said Mr. Moran’s departure was not at Pershing Square’s behest. But other investors have been clamoring for change.
Last week, Chipotle executives said that in part because of an extensive new food safety program the company had instituted over the last year, the amount of time it took customers to get through the assembly line as their meal was made had increased. Spot checks by executives and the company’s auditing team found used napkins left on tables, smudged windows and doors, and messy condiment stations. Some customers using the Chipotle app to order were told their meal would not be ready for 45 minutes to an hour.
Such issues largely fell under Mr. Moran’s supervision, but will now fall to Mr. Ells, a self-described perfectionist who founded the company in 1993 with a loan from his father.
Chipotle, one of our favorite barfblog topics, is in the news again as CEO Steve Ells appeared on the Today Show to talk woes associated with recovery from 2015’s multiple outbreaks. Ells says the slow recovery is because their service sucks now. I dunno.
I like to get my real and fake news on the Internet and consume digital stuff so I checked out the Newsy video of Ells walking through a Chipotle kitchen (below, exactly as shown).
At 10 seconds the guy who wrote, “We deployed robust, industry leading new food safety procedures in our restaurants including new handling procedures for produce, citrus and meats as well as comprehensive sanitizing protocols” pokes at a piece of meat on the grill, I’m guessing to check for doneness, with his bare hands.
Steve, a good food safety culture starts at the top. Model safe practices for your staff, mix in a thermometer and some gloves.
According to Motley Fool, top execs at Chipotle made more money than lots of other food CEOs.
Even after their compensations were cut in half last year, its co-CEOs Steve Ells and Monty Moran earned nearly $14 million each.
Ells’ and Moran’s compensation packages are particularly egregious in the wake of its food safety crisis, which began last year with an E. coli outbreak at a number of its restaurants in the Pacific Northwest.
To a certain extent, it’s to be expected that a company like Chipotle would have something like this happen at some point in its corporate existence. After all, it’s happened at virtually every other major food company in the United States, be it fast food chains such as McDonalds, Taco Bell, or Jack in the Box or grocery stores such as Wal-Mart, Whole Foods, or Costco.
But what’s important to appreciate is that Chipotle left itself especially vulnerable to food borne illness outbreaks. As Austin Carr points out in an incredibly detailed review of Chiptole’s crisis for Fast Company magazine, while the chain served the equivalent of the population of Philadelphia on a daily basis prior to outbreaks, it had only four people assigned to its quality assurance team, tasked with tracking the quality of ingredients sourced from suppliers.
I have a cousin who has carried on the family tradition and makes a living growing asparagus.
The family biz has gotten into all sorts of asparagus by-products and the farm has a large, devoted crowd of customers.
He proclaims his stuff is GMO-free.
Without going into the nuances of that statement, I said to him a few years ago while visiting, what happens if a super-great genetically engineered asparagus comes out that is beneficial to your farm, your income, and your customers?
He was too busy thinking about the present, and that’s fine.
But consumers’ attitudes can change in a heartbeat – or an outbreak.
Chipotle, the purveyors of all things natural, hormone-free, sustainable, GMO-free, dolphin-free and free from whatever apparently wasn’t free from the bacteria and viruses that make people sick.
And when food folks go out on an adjective adventure to make a buck, they sometimes get burned by the realities of biology.
And the bigger the bragging, the bigger the burn.
So it’s no surprise that the depth of the damage from Chipotle Mexican Grill’s food safety issues showed up in yet another quarterly earnings report Tuesday in which net income fell 95% and missed estimates compared to the same quarter in its high-flying days a year ago.
The Denver-based company reported third-quarter net income of $7.8 million, a dramatic fall from $144.9 million a year ago. Per-share earnings totaled 27 cents, compared with $4.59 a year ago. That was well short of the $1.60 estimated by analysts polled by S&P Global Market Intelligence.
Revenue sank 14.8% year-over-year to $1 billion during the quarter despite even though the fast-casual dining chain opened 54 new restaurants with only one closing.
To me, the amazing thing is that people still spend $1 billion a year at calorie-laden faux Mexican food.
Shares of Chipotle fell 2% in after-hours trading to $397.56. The stock has fallen about 38% in the last 12 months.
Chipotle restaurants are clearly struggling from the food safety issue that sickened customers last year and forced the temporary closure of some restaurants. Comparable restaurant sales — or sales of restaurants that have been opened at least a year — tumbled 21.9%. Comparable restaurant sales are estimated to fall again “in the low single-digits” in the fourth quarter, it said.
The company’s management is more optimistic for 2017, partly due to the lower base of comparison. Comparable restaurant sales will increase “in the high single digits,” it estimated Monday. And the company will open 195 to 210 new restaurants next year, after opening more than 220 this year. Per-share earnings next year will be $10, it estimated.
“We are earning back our customers’ trust, and our research demonstrates that people are feeling better about our brand, and the quality of our food,” Steve Ells, founder, chairman and co-CEO of Chipotle, said in a statement.
YouGov BrandIndex, a firm that tracks a brand’s reputation, regularly asks this survey question: Is Chipotle high or low quality? Before all the bad food outbreaks, Chipotle scored a very healthy 25 (on a scale of -100 to +100) for quality. It plunged to -5 by February. It has recovered to 9 recently, but that’s still far from where it was.
Translation: Customers don’t see Chipotle as the golden brand it was before the E. coli outbreak.
Be careful, cuz.
Fast Company has a series of articles about the rise and fall and … of Chipotle.
The protagonists in this opera involving a lot of barf and a dabble of cocaine, are former professor Mansour Samadpour of IEH Laboratories in Seattle, and Jim Marsden, a meat guy and former professor at Kansas State University.
I was a colleague of Marsden, worked for IEH for three months, and can fully agree with this statement regarding the merits of either’s approach to food safety at Chipotle: “If you’re in a courtroom and you listen to both sides of the argument, it’s hard to say that anyone is 100% correct. It’s all wrapped up in a lot of academic infighting and politics.”
Marsden and Mansour both know a lot of science. They know shit about consumers. History is filled with great hockey players who go on to be lousy coaches, or scientists who stray from their base of expertise and make fools of themselves. But that’s for Chipotle to figure out.
For a company that’s supposed to be supplying ethical ingredients (whatever that means) for over-priced shit, they seem to have picked the wrong argument.
What’s it going to take for customers to barf less?
Mark Crumpacker, the chief creative officer and marketing lead at Chipotle, said “It’s great to be back” upon returning to the restaurant chain after a three-month leave of absence involving foodborne outbreaks, plummeting share value, and cocaine.
Since returning, Crumpacker’s team has launched a new ad campaign, in partnership with Austin-based agency GSD&M, highlighting the “royal treatment” Chipotle gives its ingredients.
“Obviously our marketing is built on this idea of fresh, high-quality ingredients,” Crumpacker says. “So [the food-safety issues were] sort of like the ultimate insult to that position.”
Because there is nothing in fresh, high-quality ingredients that says safe: Adjectives are the language of hucksters (these are the greatest make-you-fat burritos, ever. They’re really great).
Crumpacker was central in helping the Mexican fast-casual chain foster a glossy aura around its brand, which became synonymous with fresh ingredients and an ethical value set.
Like Keith Richards and Eric Clapton, I so much enjoyed their work when they were high.
The story also says Chiptole hired Burson-Marsteller, the crisis-management PR firm the bottom-feeders of PR hacks that has supported Chipotle since the outbreaks (for a cost, paid for by all you yuppies).
Anyone who hires B-M is corporate mainstream, not some hippies selling ethical burritos, whatever that means.
Austin Carr of Fast Company asks in another story, is it now safe to eat at Chipotle?
Was it ever safe to eat at Chipotle given their gross negligence of microbial food safety issues and vast embrace of marketing hucksterism.
Co-CEO Steve Ells says, “Justifiably, people really question our trust. You lose that trust. For how long? We’re working really, really hard to get that trust back.”
Multiple industry experts tell me that Chipotle did not take food safety seriously enough or invest sufficient resources into quality assurance (QA). “When this [outbreak] first broke, the leadership at Chipotle, and I include Steve and [co-CEO] Monty [Moran], were completely sideswiped and didn’t know what the hell they were doing,” says one source familiar with Chipotle’s food-safety measures. “They had not really considered food safety at the level that they should have.”
The question is not how bad Chipotle fucked up and how a chain of such size and profits bamboozle the American public, the question is who will be next? And will anyone pay attention when some voice in the forest says in 2007, these Chipotle types are not focused on food safety?
Before its E. coli incidents, a slew of sources tell me that the food safety and QA team overseeing the company’s entire supply chain included just four people, a low number for a chain of Chipotle’s scale and complexity. The company also split its safety teams, which some suggest created arbitrary divisions of responsibility within the organization. Heidi Wederquist, then Chipotle’s director of QA and food safety, oversaw supply-chain issues, but had little visibility into restaurant operations. Conversely, Tim Spong, who knew Moran in college and served as outside counsel for Chipotle before joining the company, managed safety, security, and risk at the restaurant level. “There is no way a team that small could properly manage all the food coming into that system,” says one former analyst at the company, who now works for a chain much smaller than Chipotle but with a QA team that’s twice its size. Chipotle spokesperson Chris Arnold disputes the visibility claims but confirms the rest, adding that the team was “strengthened” with additional hires after February 2016 and that the two groups have now been merged under Spong’s leadership. (Additionally, Jason Von Rohr, Chipotle’s executive director of supply chain, who was responsible for sourcing all of Chipotle’s ingredients, departed shortly after the E. coli outbreaks. Multiple sources indicate he had been planning to leave Chipotle and his departure was not a result of the outbreaks. He has since joined Amazon.)
Thanks for the org.chart.
All those people who paid a premium to barf thank you for the org.chart.
Originally, Chipotle followed the guidance of food-safety scientist Mansour Samadpour, who runs the Seattle-based consultancy IEH Laboratories. He’d initially focused the company’s food-safety program on a mix of supply-chain testing and what are called “interventions” or “kill steps,” which work to eliminate pathogens from ingredients. For example, he introduced blanching produce to Chipotle, a kill step whereby Chipotle workers put lemons, limes, onions, avocados, and jalapeños into 185-degree water for five seconds before preparing them for customers.
When Chipotle hired James Marsden in February 2016 to be its director of food safety, he shifted the company to adopt more of these interventions, while winding down Samadpour’s testing system. He expanded the company’s blanching system, for example, to include bell peppers.
One of Marsden’s first acts was to create an ordered list of the riskiest ingredients on the restaurant’s menu. At the top of his list? Chipotle’s beef. Though there likely wasn’t one smoking gun that caused the outbreaks, in terms of particular ingredients, sources indicate Chipotle had narrowed its investigation to a select few items, including onions, cilantro, and beef. Cross-contamination was likely, but because the company’s E. coli outbreaks were limited to around 60 infected people, some food-safety sources suggest it was more than likely Chipotle’s beef was the original culprit that carried the E. coli, since it is a cooked item (unlike, say, cilantro), which may have reduced how widespread the outbreak could have been.
Or, familiarity breeds contempt, and Marsden would be most familiar with beef.
Likewise, the company, which briefly moved the preparation and sanitation of lettuce to its central kitchens after the outbreaks, has since returned heads of romaine to its stores. How can it do this without risking another outbreak? For the lettuce at least, Chris Arnold, the Chipotle spokesperson, says the company has introduced a new “multi-step washing process” to reduce the risk of pathogens. Marsden boasted to me how Chipotle’s lettuce is safer now because it implemented what’s called “harvest testing,” meaning that it is tested in the field before being shipped to suppliers. But this is a baseline standard in the industry; the company was already doing harvest testing before the crisis.
And those bugs are hard to wash off.
A bunch of us figured out on-farm food safety 20 years ago, to prevent, as much as possible, bugs getting on things like lettuce.
No mention of that.
But lettuce ain’t beef.
Marsden has also unveiled his own testing system, to replace the solution initially implemented by Samadpour, the outside consultant from IEH Laboratories (who has since stopped working with Chipotle). This new system centers on “routinely” verifying the efficacy of Chipotle’s intervention requirements. Rather than having suppliers take and test more frequent samples of raw beef, for example, they can now test at far fewer intervals because the meat is precooked; they’re primarily doing this to ensure that kill steps, such as the sous-vide process of cooking steak, are working properly.
The company has suggested that it is now “doing more testing than we have ever done,” as Arnold tells me. Upfront, this new testing system requires resource-intensive validation studies, to ensure that the entire system is functioning correctly. But after these studies are performed, the company’s food will undergo substantially less food testing than it was under Samadpour. As with Samadpour’s testing program, there are complicated pros and cons to Marsden’s system, but as one neutral food-safety observer says, “If you’re in a courtroom and you listen to both sides of the argument, it’s hard to say that anyone is 100% correct. It’s all wrapped up in a lot of academic infighting and politics.”
This infighting is not purely academic. According to four sources familiar with the situation, Heidi Wederquist, Chipotle’s director of QA and food safety, disagreed with the direction of the company’s program. She has since departed Chipotle to join Samadpour’s IEH Laboratories. Her second in command, Chipotle’s former QA manager, followed her to IEH as well. (Arnold says he cannot comment on the reason for Wederquist’s departure. Wederquist did not respond to multiple requests for comment on this matter.)
Following the outbreaks, Steve Ells, Chipotle’s founder and co-CEO, indicated to the public that the company would soon be 10 to 15 years ahead of the restaurant industry in terms of food safety.
More unsubstantiated bragging.
The program Marsden developed, centered on interventions, is a strong system, industry experts say, but it’s not exactly revolutionary. Kill steps are common in the restaurant industry, as is the type of testing Marsden adopted. If anything, this new food-safety system has raised questions about how fresh Chipotle’s food remains today.
The efficacy of Chipotle’s food-safety system is still left, to an extent, up to its crew workers, who are expected to properly wash items such as its lettuce; properly blanch much of its produce; properly handle and cook raw chicken; and properly follow in-restaurant hygiene protocols, such as hand washing, temperature logs, and other food audits. These 60,000 crew workers make an average of $10 an hour and the average Chipotle restaurant sees its headcount turn over at least once a year.
I just registered for an Ice Hockey Australia Level 2 coaching course.
The course is rarely offered, and there’s only a couple of level 2 coaches in Queensland. It will take 25 hours of training to complete.
It’s similar to the Intermediate Level Coach status I had in Canada back in 2001, which was required to coach a rep or travel team.
It’s a lot of time, sitting in a classroom, and on the ice.
I view it as my church, my community service.
So when Chipotle makes a big deal saying all of its managers will be trained in food safety the ServSafe way, I shrug, and ask, why weren’t they before?
How far was Chipotle’s head up its own moralistic ass that it paid more attention to food porn – like hormones and GE foods – than to food safety, the things that make people barf?
Great, you’re going to require training. Anyone ask if the training is any good? Third-party audits? Nice soundbite but they’re just a paycheck. Handwashing every thirty minutes? McDonald’s have been doing that for decades (you’d think Chipotle would have picked that up when they were partnered with McDonald’s, but no, there was food porn to peddle).
The Chipotle announcement reads like a moralistic lecture, and that no one had discovered food safety before.
A year after the outbreaks, Chipotle is now getting into standard PR – which it should have done months ago (Chipotle, your communication advisors absolutely suck). The full page ad, the video, the push for food safety.
Guacamole, for instance, now takes advantages of the cleansing properties of the lemon and lime juices in the recipe. Before getting mixed, the chopped tomatoes, onions and jalapeños are laid on top of avocados and drizzled with citrus juices in one last effort to ensure food safety.
Some scientists may question such tactics, saying they have been supplanted by newer methods. But Dr. James Marsden, Chipotle’s new executive director of food safety, who had recently retired from teaching at Kansas State University (and the father of the actor James Marsden, best known as Cyclops in the “X Men” film series) said he was confident in them.
“We’re doing research and are going to publish papers on what we’re doing, so people can see for themselves that it works,” he said.
That’s all good, but they’re still moralistic assholes who expect people to pay a premium for their food sermons (journos, contact me for Marsden stories).
In a video that the Mexican burrito chain unveiled on Wednesday, a contrite Ells admits that last year, the fast-casual restaurant chain “failed to live up to our own food safety standards, and in so doing, we let our customers down. At that time, I made a promise to all of our customers that we would elevate our food safety program.”
Looking to revalue Chipotle’s share price is more accurate.
Chipotle initially blamed the Centers for Disease Control and Australian beef for its woes. Today, it blamed social media.
“No one has ever had this kind of a food safety crisis in the era of social media,” Mr. Ells said.
I could list hundreds, beginning with E. coli O157 in spinach in 2006, you arrogant poser.
“Jack In The Box,” — a burger chain where more than 700 people got sick in 1993 after eating E. coli contaminated meat — “never had to deal with Facebook and Twitter,” he said.
When I coach, I’m always telling kids, and adults, stop blaming the refs, go score a goal, stop whinging.
What is fresh? Australian beef in the U.S.?
Is this guy stealing from Trump’s playbook?
It’s slogans and hucksterism.
Which Americans seem to go for.
And Mr. Ells, since you seem content on lecturing Americans about food safety, while blaming others, here’s a history lesson.
In the Fall of 1994, Intel computer chips became scrutinized by the computer geeks, and then the public.
Intel had delayed responding to allegations, and Wall Street analysts at the time said it was the result of a corporate culture accustomed to handling technical issues rather than addressing customers’ hopes and fears.
On Monday, Nov. 12, 1994, the International Business Machines Corp. abruptly announced that its own researchers had determined that the Pentium flaw would lead to division errors much more frequently than Intel said. IBM said it was suspending shipments of personal computers containing the Pentium chip
Mr. Grove was stunned. The head of IBM’s PC division, Richard Thoman, had given no advance warning. A fax from Thoman arrived at Intel’s HQ on Monday morning after the IBM announcement, saying he had been unable to find Grove’s number during the weekend. Mr. Grove, whose number is listed, called directory assistance twice to ask for his own number to ensure he was listed.
After the IBM announcement, the number of calls to Santa Clara overwhelmed the capacity of AT&T’s West Coast long-distance telephone switching centres, blocking calls. Intel stock fell 6.5 per cent
Only then, Mr. Grove said, did he begin to realize that an engineer’s approach was inappropriate for a consumer problem.
Intel took out full-page ads, apologized, and did better.
That was in months, not a year.
Mr. Ells, you can claim you’re in uncharted territory, that no one has experienced the woes like you have, that fresh is a meaningful term.
But it’s just a repeat.
Customers may expect you to have the humility to admit such failings when driven by the hubris of your own beliefs.
But hey, anyone who can get Americans to believe that 1,000 calorie burritos are healthy can do anything you damn well please.
And customers will bow down.
Investors. I wouldn’t touch it. But I said that in 2007.