Waaaah: Chipotle still doesn’t get it, whinges about CDC reporting of E. coli outbreaks

Posted on May 6, 2016 by Douglas Powell

According to Reuters, the U.S. Centers for Disease Control and Prevention has pushed back against complaints from Chipotle Mexican Grill that the health agency misinformed the public with its reporting of certain E. coli cases linked to the burrito chain.

The CDC, in a letter to a lawyer representing Chipotle, said it believes its web updates on the outbreaks served to protect and inform the public.

The CDC’s response, which was posted online this week and dated April 15, said its updates provided people who may have become sick after eating at Chipotle restaurants with information they might have needed to be diagnosed and treated for E. coli O26.

In December, Chipotle’s lawyer said in a letter to the CDC that some of the agency’s updates were confusing and unclear and that their release “only acts to create public panic.”

For a supposedly modernly hipster chain, Chipotle is purely old school when it comes to going public: patronizing, paternalistic, pathetic.

Chipotle’s reputation score goes down

Posted on April 27, 2016 by Ben Chapman

Kinda like some of the adult hockey teams I’ve been on, Chipotle’s reputation, according to Bloomberg, has gone from first to worst.

I don’t know the measures, metrics or scale, so this might fall into the ‘charts and graphs with no science’ category. But like the buzz score, the reputation is dropping.

The company’s reputation now ranks below rivals including Moe’s Southwest Grill and Jack in the Box Inc.’s Qdoba, according to a new survey from WD Partners and Nation’s Restaurant News. Last year, Chipotle had the best reputation among Mexican limited-service chains in the U.S.

5 outbreaks in 6 months will do that: Chipotle sales tank in Q1

Posted on April 27, 2016 by Douglas Powell

USA Today reports that Chipotle posted a double-digit sales decline in the first quarter as the fast-casual restaurant chain works to restore its reputation after a spate of food-related illnesses hit its stores last year.

Chipotle was dealt a swift blow when multiple instances of E. coli and norovirus shut down its stores and scared off customers starting last fall. The outbreaks prompted Chipotle, which built its reputation on preparing fresh food directly in stores, to adopt new food-safety policies and move more of its food preparation to a central kitchen, where it’s also testing certain ingredients for diseases.

In the earnings report out Tuesday, Chipotle said food costs accounted for more than 35% of revenue in the quarter ended March 31, driven up by food-testing protocols and increased costs for pre-cut produce. That means for every dollar going into Chipotle’s cash registers, it spent about 35 cents on food costs.

The company has been investing heavily in marketing and promotions to entice customers back to stores. Promotional and marketing expenses totaled $55 million in the quarter, Chief Financial Officer Jack Hartung said on a conference call. The efforts appear to be working. Executives said on the call Tuesday that the company gave away more than 6 million burritos or burrito bowls in February and March. A mobile campaign offering free burritos to make up for the day Chipotle closed stores temporarily in early February to hold an all-staff meeting on food safety had a 67% redemption rate, said co-CEO Steve Ells.

Sales at stores open at least a year fell nearly 30%, and restaurant transactions fell more than 21% as Chipotle reeled from the fallout of the food-safety issues — although transaction volume improved as the quarter went on. While the promotions seem to be resonating with new customers, executives said the company is still working to get its formerly most loyal eaters back in stores.

Chipotle said total sales came to $834.5 million, down 23.4% from $1.1 billion in the year-ago quarter. That was well below analyst expectations for revenue of $863.2 million, according to S&P Global Market Intelligence.

Chipotle shares fell about 5% in after-hours trading on the news.

Stigma is hard to shake: Chipotle edition

Posted on March 17, 2016 by Ben Chapman

“We don’t have a good example of something like this (the frequency and duration of food issues experienced by Chipotle) … and (don’t know) how long it takes to rebuild,”

That’s what I told Matt Krantz of USA Today when he asked when folks would start to trust Chipotle again, and when investors might expect to see profits go up.

I don’t know much about profits, but I did tell him about stigma and how hard it is to shake it. Jack-in-the-Box, over two decades later is still identified with the E. coli outbreak that started them all.

The burrito chain late Tuesday told investors it could lose up to $1 a share “or worse” in the first quarter as the company continues to suffer from a spate of food-safety outbreaks. That’s a big disappointment for investors who expected the company to report an adjusted profit per share of 4 cents a share, according to S&P Global Market Intelligence. Chipotle reported an adjusted profit of $2.17 a share in the fourth quarter of 2015.

A variety of factors are hurting Chipotle’s bottom line. Chipotle faces higher costs during the quarter to increase marketing and promotions – not to mention costs associated with improving its processes to try to prevent future outbreaks. “We also anticipate higher food costs due to additional food safety protocols put into place,” the company said in a statement.

Chipotle hires PR thingies and Marsden to deal with E. coli

Posted on March 16, 2016 by Douglas Powell

Denver-based burrito boss Chipotle has enjoyed multiple years of PR joviality.

In an attempt to further convince the American public that diarrhea burritos are good for them – and healthy — Chipotle has hired Burson-Marsteller to replace previous AOR Edelman over what was cited as “client conflict” over the contract termination.

Burson-Marsteller is a global public relations and communications firm headquartered in New York City. Burson-Marsteller operates 67 wholly owned offices and 71 affiliate offices in 98 countries in six continents.[

At the same time, Chipotle has named Jim Marsden to the newly created position of executive director of food safety. In 2014, he was inducted into the Meat Industry Hall of Fame.

Marsden, who will report directly to company CEO Monty Moran and founder Steve Ells, is tasked with helping the 2,000-restaurant chain achieve Ells’ vision of becoming the leader in food safety in the restaurant industry.

The crap Americans eat: Jimmy Johns and Chipotle, together at last

Posted on March 15, 2016 by Douglas Powell

It was a food safety juxtaposition in Scottsdale, Arizona I couldn’t help but photograph.

Jimmy Johns and its sprout-laden subs, Chipotle and its mystery E. coli and Salmonella and Norovirus.

Jimmy Johns was empty; Chipotle, not so much.

If Chipotle Mexican Grill can convince Americans that a 1,000 calorie diarrhea burrito is healthy, and that their co-CEOs deserve $13 million each, they can pretty much do what they want.

Smells like teen spirit: Chipotle whoring itself with freebies

Posted on March 13, 2016 by Douglas Powell

Rise of the marketers.

In 1990, I was working as a journalist – today it would be a content
providerer – at a computer magazine.

I had my genetics degree, I’d built some journalism skills, I got to write about the science behind the sales.

It was a good fit for a youngster trying to find his way in the world with a wife, kid and another on the way.

About six months in, I realized I was a widget – all the money was in sales, gladhanding and BS (change the abbreviation appropriately).

I moved on.

Twenty-five years later I took a gig and tried to use evidence to convince Chobani how best to rejuvenate their market after numerous recalls.

Silly, naïve me.

Chipotle is going down the same path.

While the PR-thingies are congratulating themselves that most media coverage emphasizes the co-CEOs took a $13 million pay cut, they still took home $13 million to flog some cultural appropriation of Mexican food. And sicken about 600 people.

Here’s the latest from a barfblog.com contributor.

chipotle-freebies-pdf

Market microbial food safety instead. The only barfing the kids should be doing at prom is from too much booze, not diarrhea burritos.

Food safety starts at the top; Chipotle co-CEOs only get $13 million each for 2015

Posted on March 12, 2016 by Ben Chapman

Chipotle by the numbers:

Over 490 illnesses linked to 6 outbreaks in 6 months.

Stock down 40%

1 fired manager and 1 fired food handler

Almost 2000 sites closed for 4 hours to change their food safety culture

3 Billerica Chipotle employees with norovirus

And, according to Reuters, the co-CEO’s 2015 compensation cut over 50% to about $13 million

Chipotle Mexican Grill Inc’s (CMG.N) co-chief executive officers’ total compensation more than halved in 2015, a year when the one-time Wall Street darling lost flavor following a series of food-borne illnesses linked to its restaurants.

Founder and co-Chief Executive Steve Ells’ total compensation fell 52 percent to $13.8 million, from a year earlier, according to a regulatory filing on Friday.

Co-CEO Monty Moran’s total compensation fell about 51 percent to $13.6 million.

‘They’re barfing again at Chipotle’ Company did the right thing in closing outlet with sick staffers

Posted on March 11, 2016 by Douglas Powell

Chipotle Mexican Grill Inc received praise for its handling of potential Norovirus infections at a Boston-area restaurant, as sick employees stayed home and the burrito chain quickly cleaned the restaurant.

Shares of Chipotle fell as much as 6.1 percent early, then gained back some ground after the head of the Billerica, Massachusetts public health department said the restaurant was cleaned and would reopen on Thursday. The stock closed down 3.4 percent at $506.63.

Reuters caught up with me at the Brisbane airport as me and the fam were about to leave for a 3-week tour of North America.

The closure of the Chipotle in the Boston suburb was seen as a partial test of a new food safety system rolled out after a series of illnesses hit the fresh burrito chain last year.

That workers stayed home in particular was a good sign, said Doug Powell, publisher of the food safety site barfblog.com. “It is an indication that the system is working,” he said. But customers may focus only on the sickness, not the company response. For burrito fans, “It’s just – ooh, they’re barfing at Chipotle again,” Powell said.

The company response was not a test of new measures to ensure ingredients are safe and avoid E.coli, he added.

John Patriquin /Staff Photographer; Tuesday, 1/25/11. Danny Leon (on right) and Julia Calder (center) serve customers at Chipotle restaurant in South Portland.

Chipotle food scares last year include two E.coli outbreaks linked to its restaurants that sickened more than 50 people in 10 states, as well as separate outbreaks of norovirus, a highly contagious virus known as the “winter vomiting bug”, in Massachusetts and California that involved more than 350 diners.

Three employees are suspected to have norovirus in Billerica, the town’s Board of Health said. Earlier in the day, local Public Health Director Richard Berube told reporters that one of the three had been confirmed to have the virus.

Berube said Chipotle has been “very proactive” and remaining staff at the burrito restaurant would be screened for norovirus, he added.

Berube, the company and the Massachusetts Department of Public Health all said no customers were known to be sick.

“They did the right thing,” said Howard Penney, who covers the chain for Hedgeye Risk Management. However, he argued that Chipotle was still a “broken company” and that it would take years to return to its peak performance.

Chipotle spokesman Chris Arnold said the company closed the restaurant after employees called in sick.

No one wants to be the next Chipotle, including Chipotle: Outlet closes because of Norovirus

Posted on March 9, 2016 by Douglas Powell

In keeping with the theme coined by the Huffington Post — all the ‘next Chipotles’ want to make sure they’re not the next Chipotle — a Chipotle restaurant in Billerica, Mass. has temporarily closed after one of its workers was diagnosed with Norovirus.

WHDH reports that one of the store’s workers has a confirmed case of Norovirus, according to the town’s health department. The remaining two workers are suspected of having the virus.

The are no reports of any customers becoming ill. The city’s health department says the restaurant voluntarily shut down on Tuesday.

The closing comes after the company’s Brighton store closed for several days after more than 150 people who ate there were diagnosed with the same virus.
7News Boston WHDH-TV

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