How to Prevent Another Chipotle

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 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.
flickr / Aranami

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.”

Chipotle (which declined to comment for this article) earns big points with customers by playing up its unique supply chain that can oftentimes be traced to local farms. But just because pork or produce is raised nearby doesn’t mean it’s safe, Shaw says. Smaller farms and suppliers may not have access to the same resources as the biggest players, such as the ability to regularly conduct microbiological tests on products.

And a vast network of suppliers makes it operationally challenging for the restaurant company to keep tabs on all the different products coming in from so many places. Plus, any brand that relies heavily on fresh produce has to be cautious of inherent risks because contaminants are not killed off in the cooking process the way they are in meat products.

To safely rely on such a deep roster of suppliers would require aggressive levels of spot testing at farms, warehouses, and restaurants, Shaw says.

“Perception is reality, and people perceive fresh food to be safe food. But that’s not necessarily the case. Fresh means no chemicals, no preservatives, and that the food isn’t processed. And with that comes a certain amount of risk,” she says. “Chipotle receives products from a mass number of suppliers. If you’re receiving food from only a few suppliers, it’s much easier to manage. If you’re receiving food from over 100 suppliers, it’s much more difficult to manage.”

Chipotle first opened in 1993, the same year as one of the nation’s most notorious outbreaks of foodborne illnesses. That year, E. coli struck Jack in the Box customers in the Western U.S., leaving four children dead, dozens with permanent brain and kidney damage, and hundreds more ill.

“That was the year E. coli came down the red carpet,” says Jeff Nelken, a food safety coach. He points to that event as being a turning point for several foodservice companies and how they handled food-safety preparation.

For Chipotle, along with moving some of the food preparation to centralized kitchens, the company has responded to the outbreaks with a number of actions. That included a temporary closure at all its stores on February 8 to train and update employees on progress.

Founder, chairman, and co-CEO Steve Ells committed to spending up to $10 million to help smaller suppliers meet its new safety standards, which include DNA testing of all ingredients before they go to stores. The brand introduced new sanitation procedures for restaurants, including new microbiological kill steps, and announced new incentives for workers tied to food-safety metrics. Then, in March, the company hired James Marsden, a professor from Kansas State University, as food safety “czar.”

Nelken says Chipotle must work to build a culture of food safety that spans from the farm to the store. Suppliers must receive specific instructions that cover everything from fertilizers to transportation and storage of products. And every employee must know and follow strict procedures surrounding sanitation and food handling.

In addition to regular lab tests for ingredients and store audits, he suggests that stores begin sending executives copies of all local health department inspection records, which can serve as valuable red flags for any problems that might be brewing.

“It’s never going to be perfect, because we have human beings involved,” Nelken says. “It’s a business that relies on values, training, supervision, and, of course, cross-checking to make sure you’re monitoring and verifying systems you put into place. It’s almost like constant surveillance.”

Building that culture should be easier now, though. Food safety is a natural fit with Chipotle’s focus on integrity, experts interviewed for this story say. And its recent scares should give everyone from the front line to the C-suite an incentive to implement lasting change.

“There isn’t anyone in the company that doesn’t realize this was a major blunder and can’t happen again. So I think for them, they’ll have a better shot to use this internally as a rallying cry,” says Aaron Allen, CEO of global restaurant consulting firm Aaron Allen & Associates. “I think who is going to have a harder time is the rest of the industry and their staffs.”

With the stresses of running a restaurant, it’s easy to take safety for granted. Allen likens food-safety investments to the fire department—nobody wants to pay for it until catastrophe strikes. “I don’t think I’ve ever seen an organization say as a reminder, ‘Our first obligation is food safety,’” Allen says. “I mean, the airlines have that down; they put safety above comfort and all else.”

Aside from training and procedures, restaurants can lean more on technology in the case of a foodborne illness, says Angela Fernandez, vice president of retail grocery and foodservice at GS1 US, the domestic member of the international GS1 standards organization, which decades ago united merchants and suppliers under the Universal Product Code, or UPC.

GS1 is among several groups working to infuse traceability across the food supply chain, allowing restaurants, suppliers, and government regulators to quickly target the culprit in the supply chain during an outbreak. “Should a specific product come into question, I can now pinpoint exactly where that product was sourced from,” she says, “and also the specific lot and batch.”

The Product Traceability Initiative was launched in 2007, a year after the Food and Drug Administration recalled all baby spinach because of an unidentified E. coli outbreak. By scanning crates of lettuce or boxes of meat every step of the way, traceability measures allow restaurants to know what’s in their stores, when it was delivered, where it came from, and who previously handled it—powerful information when trying to work backward and find the source of an illness.

“So when you think about certain restaurants that may go through five cases of diced tomatoes a day, that product is long gone when you come knocking on the door three weeks later,” Fernandez says.

But she says the information is more than just a safety net amid a crisis. With heightened consumer interest in the origin of food products, she says, some participating restaurants are leveraging their traceability efforts, highlighting the sources of their ingredients in their marketing to customers.

“You do have operators who are using this just to power their business system so they have more intelligence about what’s going where and where it came from,” Fernandez says. “You’ve also got some very progressive operators taking all that data they’ve collected and putting it in customers’ hands.”