Bigger the brag, bigger the burn: Chipotle Q3 income tanks as food safety issues take toll

I have a cousin who has carried on the family tradition and makes a living growing asparagus.

chipotle-ad-2In Ontario.

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.

chipotle-diarrhea“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.

Not quite.

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.


NAACP members sue California hotel over ‘humiliating’ norovirus outbreak

NAACP members are suing an international hotel chain over a norovirus outbreak that sickened 127 people — everyone who ate the salmon — at the NAACP’s annual California conference at the upscale Hotel Sofitel in Redwood City in 2014.

Civil rights attorney John Burris listens as Alice A. Huffman, President of the California  NAACP, talks about her experience with the staff at the Hotel Sofitel at the law offices of John Burris in Oakland Calif., on Tuesday, Oct. 25, 2016. Civil rights attorney John Burris announces the filing of a lawsuit against Sofitel Corporation on behalf of 127 NAACP members including Alice Huffman. (Laura A. Oda/Bay Area News Group)

Civil rights attorney John Burris listens as Alice A. Huffman, President of the California NAACP, talks about her experience with the staff at the Hotel Sofitel at the law offices of John Burris in Oakland Calif., on Tuesday, Oct. 25, 2016. Civil rights attorney John Burris announces the filing of a lawsuit against Sofitel Corporation on behalf of 127 NAACP members including Alice Huffman. (Laura A. Oda/Bay Area News Group)

Civil rights attorney John Burris, one of the conference attendees who didn’t eat the fish, filed the lawsuit on Tuesday, on the two-year anniversary of the Oct. 25, 2014 gala of around 300 black dignitaries, community leaders and youth. Attendants described brunch the next morning as a “humiliating” “horror scene” with NAACP members age 5 to 80 getting violently ill in the hotel lobby while hotel staff ignored them and provided no aid.

A spokesperson for Sofitel Corporation could not be reached for comment on Tuesday.

California NAACP President and conference organizer Alice Huffman said the members were treated “like dogs” by hotel staff.

“I get very sad when I think about what happened to our people and then I get very annoyed at the hotel and the indifference that they showed us,” said Huffman, who said she had enough problems with the hotel before the conference to make her wonder if race was an issue.

Former Oakland Mayor Elihu Harris, who said he was in a coma for two days after being struck by the virus, was among more than three dozen attendees who were hospitalized.

Norovirus outbreak sickens dozens linked to ‘party place’ in Hong Kong

Something was lost in translation, so I asked my friend from China, what’s a party place?

She told me it was a gathering spot that can cater to large events — 2-3,000 people — and called it an infection centre.
stephen_colbert_asian_friendAn ideal place to circulate Norovirus.

Health officials with Centre for Health Protection (CHP) of the Department of Health (DH) announced the investigation of a norovirus outbreak that has sickened at least two dozen in a party place in Sham Shui Po.

The 24 patients, including 13 children (six boys and seven girls) and 11 adults (three men and eight women) aged from 1 to 39, have presented with fever, vomiting and diarrhea since October 1. Among them, 18 sought medical attention while five of them have been discharged after hospitalization. All patients are now in a stable condition.

The stool specimen of one child tested positive for norovirus upon laboratory testing by the hospital concerned. Investigations are continuing.

In addition, health officials are investigating two outbreaks of acute gastroenteritis (AGE) in two kindergartens in Tai Po and Tin Shui Wai. An etiology has not been determined.

The outbreak at the kindergarten in Tai Po involves eight males and 13 females, comprising 18 pupils aged 3 to 5 and three staff members. They have presented with vomiting, diarrhea and fever since September 29. Fourteen of them sought medical attention and none required hospitalization.

The outbreak at the kindergarten in Tin Shui Wai involved eight boys and 13 girls aged between 2 and 5. They have presented with diarrhea and vomiting since October 3. Eleven pupils sought medical attention while one of them required hospitalization.

All three facilities have been visited by health officials and received advice concerning  proper and thorough disinfection, disposal of vomitus, and personal and environmental hygiene. The three places have been put under medical surveillance.

Check if there’s paper towels in the kids’ bathrooms: Evidence-based interventions of Norovirus outbreaks in China

In resource-limited settings where laboratory capacity is limited and response strategy is non-specific, delayed or inappropriate intervention against outbreaks of Norovirus (NoV) are common. Here we report interventions of two norovirus outbreaks, which highlight the importance of evidence-based modeling and assessment to identify infection sources and formulate effective response strategies.


Spatiotemporal scanning, mathematical and random walk modeling predicted the modes of transmission in the two incidents, which were supported by laboratory results and intervention outcomes.


Simulation results indicated that contaminated water was 14 to 500 fold more infectious than infected individuals. Asymptomatic individuals were not effective transmitters. School closure for up to a week still could not contain the outbreak unless the duration was extended to 10 or more days. The total attack rates (TARs) for waterborne NoV outbreaks reported in China (n = 3, median = 4.37) were significantly (p < 0.05) lower than worldwide (n = 14, median = 41.34). The low TARs are likely due to the high number of the affected population.


We found that school closure alone could not contain Norovirus outbreaks. Overlooked personal hygiene may serve as a hotbed for infectious disease transmission. Our results reveal that evidence-based investigations can facilitate timely interventions of Norovirus transmission.

BioMed Central Public Health

Tianmu Chen, Haogao Gu, Ross Ka-Kit Leung, Ruchun Liu, Qiuping Chen, Ying Wu and Yaman Li

DOI: 10.1186/s12889-016-3716-3

Norovirus GII.4 a new strain

A norovirus recombinant GII.P4_NewOrleans_2009/GII.4_Sydney_2012 was first detected in Victoria, Australia, in August 2015 at low frequency, and then re-emerged in June 2016, having undergone genetic changes.

norovirus-qmraAnalysis of 14 years’ surveillance data from Victoria suggests a typical delay of two to seven months between first detection of a new variant and occurrence of a subsequent epidemic linked to that variant. We consider that the current recombinant strain has the potential to become a pandemic variant.

A norovirus intervariant GII.4 recombinant in Victoria, Australia, June 2016: The next epidemic variant?

Euro Surveill. 2016;21(39):pii=30353. DOI:

L Bruggink, M Catton, J Marshall

Norovirus strikes hundreds at obstacle race in France

In June 2015, near Nice in the Alpes-Maritimes department, an acute gastroenteritis (AG) outbreak occurred among participants of an obstacle race. An investigation in 2 phases was conducted to identify the source of infection and document the extent of the outbreak.

tough_mudder_16-340x227During phase 1, a message on Facebook asked the racers to report by email any symptoms. In phase 2, a retrospective study was conducted through an interactive questionnaire for all participants. Cross-sectional descriptive studies were conducted, completed by an analytical study of the potential risks factors. Microbiological and environmental investigations were conducted in order to identify the responsible agent. An analysis of antidiarrhoeal drugs reimbursements was conducted with data from the French national health insurance to confirm the epidemiological investigation.

During phase 1, on 8229 registered participants, at least 1001 adults reported an AG, which was resolved in 48H.

In phase 2, the risks factors of AG identified were due to: younger participants, first hour of departure time and ingestion of mud. Twenty stool specimens traced were negative for bacteriological research. Only 4 stool specimens were sent to the CNR of enteric viruses. They were all positive for Norovirus genogroup1 and genotype 2 (GI.2), strain of human origin.

Indicator bacteria were negative in the drinking water and positive in the muddy water. Outbreak origin was due to human transmission: a norovirus possibly introduced by stools or vomiting from one or more persons infected, transmitted through contaminated muddy water.

For the future, recommendations for the organisation of such events should be proposed. The risks related to these races should be assessed to guide health authorities and to guide organizers in their awareness of potential risks factors.

Investigation of an outbreak of acute gastroenteritis among participants of an Obstacle Adventure Race Alpes-Maritimes

S Giron, C Six

23 years late, Chipotle gets food safety religion (or so they lecture)

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.

dp-sorenne-becThat’s on top of the 16 hours I put in for Coach 1 in Australia, and recertification every two years.

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).

Chipotle founder and Co-CEO stepped in front of a camera in a bid to win over weary diners that still aren’t hankering for the chain’s once-popular tacos and burritos.

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.”

chipotleadContrite is not the word I would use.

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.


Blame Australia: 3 new noroviruses cause gastro outbreaks across Australia

University of New South Wales scientists have identified three new strains of highly contagious norovirus that are responsible for a major new epidemic of viral gastroenteritis that has affected hundreds of thousands of Australians over winter.

keep-calm-and-blame-it-on-australiaScores of outbreaks of nausea, vomiting and diarrhea have occurred in Sydney, the Hunter region and the ACT, mainly in closed settings including aged care facilities, hospitals, childcare centres and cruise ships. More cases are expected.

In 2012, Professor Peter White and his team in the UNSW Faculty of Science discovered a new strain of norovirus named Sydney 2012, which caused a worldwide pandemic of gastro, including major outbreaks in Australia.

This strain dominated cases of norovirus infection until this year, when it declined from 75 per cent of cases to 18 per cent of cases in Australia. Similar trends have also been seen in the US and New Zealand.

“Now that Sydney 2012 has declined, three new strains of norovirus have emerged as a new major health concern,” says Professor White.

“They are responsible for a big increase in the number of gastro cases in Australia in the past two months, and this new spate of infection is likely to continue to cause a wave of sick leave that will affect businesses and schools already reeling from the effects of the current influenza epidemic.”

UNSW PhD student and molecular virologist Jennifer Lun worked out the genetic typing of the new viral strains.

“I was surprised to find three new viruses, rather than a single one,” she says.

“Two of the viruses are hybrid strains that evolved from the previous pandemic Sydney 2012 strain, while the other new strain is likely to have come from Asia. It occurred to me immediately that there was a potential for them to cause an increase in outbreaks this winter, because people have not been exposed to them before.”

norovirus-2Each year, norovirus infects about two million Australians and kills about 220,000 people worldwide. The nausea, vomiting and diarrhoea usually last for two to three days.

“Norovirus is highly infectious and can spread through aerosol particles when people vomit,” says Professor White, of the UNSW School of Biotechnology and Molecular Sciences.

“During the past 20 years there have been six global epidemics of norovirus, in 1996, 2002, 2004, 2006, 2009 and 2012. Only time will tell how widely these three new strains will spread.”

The research on the new strains was carried out in collaboration with researchers at the Prince of Wales Hospital, Westmead Hospital, Canberra Hospital, the NSW Public Health Unit and medical testing service Douglass Hanly Moir.

Professor White established the Australian and New Zealand Norovirus Surveillance Network of testing laboratories in 2006, which has links with two similar organisations in Europe and North America to form a global surveillance network.

Probe launched after second ill pensioner dies after Scots staff send her on 450 mile taxi ride home

As Scotland grapples with 150 children sick from Norovirus at two schools, it has emerged that a second ill pensioner has died after being sent home hundreds of miles in a taxi from a Scottish hotel.

norovirus-elderly-womanThe Herald Scotland reports the Loch Achray Hotel in Callander, Stirlingshire, sent ill 79-year-old Norma Francis home on a 350-mile taxi journey to her home in Gnosall, Stafford, after showing symptoms of gastric illness. 

Norma fell unconscious during the journey and later died in hospital after paramedics were unable to waken her. 

Three weeks after Norma died on April 6, the hotel sent guest Carol Whymark, 70, and her husband, 73, home to Suffolk 450 miles in a taxi after it was suspected she was suffering from norovirus. 

The pensioner died of a heart attack in hospital the next day. 

Her daughter Sharone says the family have instructed lawyers to investigate Carol’s stay at the hotel, booked through Lochs and Glens Holidays Limited. 
Sharone, 47, said: “I just think it is terrible that this could have happened once, let alone twice. It’s disgusting. 

“I’ve lost my mum, my dad lost his wife and my daughter her nanny. I’m disgusted and this needs investigating. 

“I’m still numb really. I still feel angry.” 

Carol, who was on a coach tour of Scotland, woke up feeling unwell at the hotel on April 28. 

Her daughter said staff told husband Desmond that his wife had norovirus and offered him rubber gloves to clean the room and left food and water outside. 

The family claim no appropriate medical advice was given and the hotel simply offered a taxi home. 

A post mortem revealed she did not have norovirus in her system and died of the heart attack. 

Sharone said: “Mum said she didn’t feel 100 per cent – but there was no evidence of vomiting or loose stools. There was no medical attention at all. 

“They said to my dad there was a 90 per cent chance he will catch the virus. 

“Half an hour later they said she was fit to travel nine hours home. It’s so wrong. 
“When they came and said they would pay for a taxi, she said, ‘Yes, let’s go home’. 

“The poor lady who passed away three weeks before, she actually did have norovirus. 

“But my mum didn’t have it. 

“The hotel thought she had norovirus because the other lady did. 

Tragically Chipotle: Freebies, settlements, falling stock and drones

It’s about having a voice.

Chipotle can hire all the food safety bigshots it likes, but it has no story, no narrative, to get past its five outbreaks in six months; and no amount of freebies are going to fix that.

kenny-diarrheaChipotle news is playing on the background of Mr. Robot. That’s prophetic.

Google parent company Alphabet is teaming up with Chipotle to test drone delivery for Virginia Tech students, according to a report from Bloomberg. The pilot program marks a turning point for Alphabet’s Project Wing division, giving the team ample room to experiment with airborne burrito deliveries in one of the first commercial programs of its kind to be greenlit by the US Federal Aviation Authority. The drones, which will be hybrid aircraft that can both fly and hover in place, will make deliveries coordinated by a Chipotle food truck on campus.

The news Chipotle probably wanted highlighted was that it has reportedly quietly settled nearly 100 claims over the last six months out of court, probably so the company won’t remind the public that they were so recently plagued by rampant food poisoning. The terms of the settlements are all confidential, but the claims were all filed by people whose ailments were verified by medical professionals. An attorney representing some of the plaintiffs called Chipotle’s move “textbook appropriate,” adding, “They’ve taken responsibility.”

“In 25 years of doing foodborne illness cases, I’ve never had a client ask for coupons for the restaurant they had gotten sick at,” said William Marler, an attorney with Seattle-based Marler Clark who represented 97 Chipotle customers. “In fact, some (clients) had gone back to the restaurant and they would call me and say, ‘Do you think it’s bad that I went back and got a burrito?’”

The company’s stock traded at $430.70 on Friday, down 1.3 percent, and lower than its 52-week high of $757 last October.

“They have a following of especially 20-somethings that other restaurants don’t have,” Marler said. “It’s a little odd, but it probably says something positive about Chipotle.

No, it says there’s a generation so much dumber than its parents.

But who am I to debunk an American myth.

Ironical that this video about American mythology was shot outside Melbourne. Chipotle blamed its E. coli outbreaks on Australian beef. Chipotle: local, fresh hypocrites.