Chipotle Blew It.

Chipotle blew it.

Full disclosure: I am a huge fan of Chipotle. I appreciate that their food (as fast food goes) is reasonably healthy and at least makes the effort to nod to organic and non-GMO ingredients. I also love the consistent quality of the food at Chipotle. A veggie fajita salad is exactly the same in New York as it is in London as it is in Toronto—and after spending more than a year in a veritable food dessert in Denmark, my first Chipotle salad in London was a true treat. Chipotle service, on the other hand, varies. Workers in the UK are pleasant and in Canada too, workers in New York are pretty consistently brusque and miserable, and in Southern California Chipotle workers are much more generous with their servings of guacamole than anywhere else.

Until about a month ago, I ate at Chipotle about once a week, on average. I have the “burrito button” on my Apple Watch, and the Chipotle app on my iPhone. I am definitely a fan. Which is exactly why I am so very disappointed by watching a company that I truly admire slowly crash and burn.

For those of you who may not be up to speed, Chipotle closed 43 restaurants in the Pacific Northwest this past October over concerns about E.Coli. First off, let me be clear: E.Coli. happens… too frequently. This might be because the U.S. has flimsy oversight of food security, but that’s a whole other article. But here’s where the problem started for Chipotle. To their credit, they closed the restaurants, and I am sure that some executive or internal PR person thought it wise to demonstrate (through the media) that “out of an abundance of caution” Chipotle was being proactive by responsibly overreacting to what, at the time, seemed to be a small issue. Most restaurants wouldn’t dare close a single outlet for fear of tarnishing their reputation. I mean, seriously, does anyone think that any other chain—Red Lobster, Olive Garden, TGIFriday’s—has never had this problem?

Unfortunately, by being responsible, Chipotle was also wrong.

The Narrative Problem
By trying to use the news as a PR vehicle, Chipotle almost immediately lost control of the narrative. Now, rather than controlling the story, the story began—almost instantly—to control Chipotle. The message came across loud and clear: 43 restaurants closed. BOOM. That’s it. In the mind of the consumer, the only question is: Why… why did those restaurants close? The answer was too convenient: E.Coli. BOOM AGAIN! Chipotle made the grievous error of linking their brand to E.Coli. That is, in the minds of most busy consumers, they don’t care much about the whole story, all they need to know is that there is a problem with Chipotle and E.Coli, and… well, that’s all they really want to know. So the message is clear: Stay away from Chipotle until we know why or what the problem is.

Again, this isn’t a problem unique to Chipotle, but most companies have crisis response teams in place. Chipotle may have a crisis response team, but that team was either completely out of their league, asleep at the switch, or on vacation. As the inverted PR machine began to work against Chipotle, the damage began to spread. And then, even worse, as cases of other E.Coli. and norovirus contaminated Chipotle meals began to spread to other states, the crisis management team seemed to truly out to lunch (or maybe sickened by E.Coli. themselves?)

The “Update on Food Safety” page on the Chipotle website was (and continues to be) consistently lagging in its updates and clarity. It is also too verbose and shrouded in mystery, which only perpetuates fear and uncertainty. Even for Chipotle fanboys like me, I wouldn’t set foot into a Chipotle, because as Judge Judy says, “if something doesn’t make sense, it’s because it’s a lie.” And someone is either lying or incredibly stupid at Chipotle. The Update on Food Safety on the Chipotle site stokes this concern and notes that with regard to the E.Coli scare in the states other than Oregon and Washington: “Despite these reports being later than the original, these are not believed to be a separate incident as all cases, including the originals in the Pacific Northwest, occurred between October 13 and November 10.”  So now, in the mind of the consumer who is already thinking Chipotle = E.Coli., they are now left to wonder: if it’s not an isolated incident, and there were several cases in the Pacific Northwest and a few in the East… what exactly is causing this?

The Chicken Solution
Chipotle has yet to fess up and say exactly what has caused the E.Coli. outbreak, and if they don’t do it fast, they might as well figure out a way to shutter up their business and close down. The fact of the matter that despite a feeble effort to keep the public informed, that Chipotle is no longer in control of the narrative of this story. A letter from the Chipotle founder, Steve Ells, posted nearly two months after the start of this debacle, doesn’t cut it either. In order to regain public trust and resuscitate their brand equity (and owner’s equity), what Chipotle needs to do is simple: pin it on a single ingredient or process. Saying something as simple as “it was the chicken” (or whatever ingredient.) Would clearly outline one thing in the minds of consumers: Chipotle = E.Coli. = Chicken. DONE. The solution for most consumers would be to avoid chicken at Chipotle, and slowly, Chipotle would begin to bounce back—or at least, have some hope of bouncing back from this episode.

Unfortunately, Chipotle leadership has failed to do this, instead opting to talk in abstract terms about food safety and central processing. I don’t know how to put this any more directly, but THAT’S NOT HELPING! Again, in the consumer’s mind, the only thing these discussions yield is more fear and raise more questions.

I can’t help but wonder, does the fact that Chipotle is engaging in a major food handling overhaul mean that, maybe, the restaurants weren’t clean to begin with? Are all the ingredients tainted? Maybe food wasn’t being handled well for years? After reading Chipotle propaganda about food safety, my brain doesn’t go anywhere good, and I am still left wondering: what the hell caused all this? With the bigger and more important question looming: what do “they” know and aren’t telling me? Because clearly, if they are spending millions to reset their entire operation, they must have discovered something wrong along the way.

I know you are thinking: yeah, but wouldn’t blaming it on the Chicken, eviscerate sales for Chipotle? The answer to that is no: Chipotle has had a very public shortage of pork (carnitas) for over a year, because the supplier was not up to Chipotle standard. Customers weathered this, and Chipotle turned a potentially negative sales killer into a positive PR move. The pork shortage didn’t hurt sales and didn’t hurt customer confidence. In fact, it helped to bolster customer confidence… until now. Now, every ingredient is suspect because Chipotle has given their clients no other option but to believe it is the processes and procedures that caused these outbreaks of E.Coli. and norovirus, and not any one ingredient.

The Bounceback
Chipotle, I truly (and sadly) believe, is finished, unless they can bounce back from this episode, and given their current strategy (or lack of strategy), I don’t believe that they on the proper trajectory to do so. Meanwhile, their stock is hemorrhaging value and corporate equity is evaporating at a rate nearly as fast as their brand equity. Stockholders aren’t going to sit by idly and watch their investment in this once-darling company, evaporate. The crisis solution for Chipotle is threefold:

  1. Get control of the narrative. Overhaul the Chipotle website and update it hourly for the foreseeable future with the latest and clearest information possible. Since this outbreak, not a single television commercial has aired for Chipotle. There should be an immediate advertising campaign to address the issue and regain the public trust. Silence in this case is deadly.
  2. Be clear about which ingredients or exactly which procedures caused this outbreak. Until this is clarified and addressed, Chipotle is playing with fire.
  3. Pay it forward. Open the doors and give it away. Regain the public trust by giving away a free lunch to anyone willing to take it. That will remind loyal customers about how tasty Chipotle food is, and will give Chipotle management a metric to measure the estimated duration of the potential rebound.

What are your thoughts about Chipotle and their recent struggles?

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.