Chipotle: Is Fresh Really Better?

Chipotle restaurant may still be asking the question, is fresher better? As one of the first fast-casual establishments in the Mexican market, Chipotle had grown to 16 locations in Colorado by 1998. In 2006, the chain had grown to nearly 500 locations before McDonald’s divested itself.

The restaurant was founded on July 13, 1993, by Steve Ells. By 2015 It had a net income of $475.6 million and more than 45,000 people on staff in more than 2000 locations by 2015.

Chipotle announced the relocation of their corporate headquarters in May of 2018 ending a 25-year relationship with Denver. Newport Beach, California is the new location for the restaurant’s base of operations.

The menu at Chipotle’s consists of four burrito bowls, tacos, and salads. Product pricing is based on the options of chicken, pork, carnitas, steak, tofu-based, or vegetarian. Toppings are offered free of charge, and this includes rice, beans, queso, four types of salsa, cheese, and sour cream.

In 2007, when asked about expanding the menu, a spokesperson said, it is essential to keep the menu focused. This is important because when a business concentrates on just creating a few items, they can ensure that they would have a better product.

Food Recovery Network has expressed health-related concerns over the high sodium content found in a full serving.

Chipotle began to test market pork and chicken chorizo in June 2015. The new spicey sausage is in selected locations the Kansas City area.

An earlier version was tested in Denver and New York City. However, many people thought that it looked too greasy.

In September 2017, the chorizo was discontinued but returned for a limited time the following year.

In 1999, Ells, while looking for ways to improve the taste of the carnitas, began to source from open range pork suppliers, this increased both the price and sales of the carnitas burrito.

Chipotle stop using genetically modified corn and soybeans in 2015, claiming to be the first restaurant nationwide to cook GMO-free.

The former food safety professor of Kansas State University accused Chipotle in 2008, of confusing the public by using such terms as naturally raised meats, organic ingredients, and locally-sourced in an attempt to acquaint those terms with food safety.

In fact, in March and April 2008, the County Health and Human Services Agency traced an outbreak of hepatitis in San Diego County to a single Chipotle restaurant located in La Mesa. The epidemiologists discovered 22 customers infected with the virus.

Some describe food poisoning outbreaks as a part of Chipotle’s trademark.

Chipotle’s History of Outbreaks

In 2008, agency traced an outbreak of hepatitis-A to a single Chipotle restaurant located in La Mesa. In the same year, and there were also implications of a norovirus outbreak in Kent, Ohio.

There was the investigation in 2009 that found that the chicken was sometimes served undercooked. They also determined the lettuce that had been cross-contaminated with raw or undercooked chicken was the vector for the outbreaks at that time.

There was also an e-Coli outbreak as well as a norovirus outbreak in 2015 in several Seattle, Washington and Simi Valley, California locations. More than 80 customers and 18 employees reported becoming sick from the foodborne outbreak. Reports continued to be filed even as late as April 2017.

The food safety issues have not driven away customers, the day after the Ohio location closed due to an outbreak, Chipotle found great success with its National Free Guac Day Promotion.

Chipotle said it used 200,000 more than average avocados that day, which adds up to almost 700,000 avocados used to meet consumer demand.

The stocks seem to outpace what is happening in the field; management has the company running in a great direction.  Stephen Anderson wrote, “we model continued margin expansion, renewed unit growth, and share buybacks in 2019.”

As of now, Chipotle restaurant seems to be flourishing with its new management, which uses a strong business model.

Written by Leon Murray
Edited by Cathy Milne-Ware

Sources:

CNBC: Chipotle outbreak cause still unknown as local health department reports more than 700 possible cases
The New York Times: Chipotle Takes a Page, and a C.E.O., From Taco Bell
Food Recovery Network: Q&A with OCC Food Raiders

All Images Courtesy of Trinity View – Used With Permission