Strategies For Handling Restaurant Food Poisoning Outbreaks

The spotlights and microscopes are on Chipotle’s response to outbreaks of E. coli, salmonella and norovirus that continue to make national headlines. Early outbreaks led to the closing of affected stores, cleaning and employee training, and reopening. Continuing outbreaks have led to the company’s stock falling from highs over $700 per share to $400 over a three month period. Pundits question Chipotle’s long term survival. So what’s a company to do?

Forbes published a piece titled Chipotle Vs. Costco: A Tale Of Two E. Coli Outbreaks authored by a Washington D.C. public affairs firm lawyer who compares the outcomes of the two company’s approaches. Initial E.Coli outbreaks at the two companies occurred at about the same time. Whereas the Costco outbreak was over in a matter of a couple of weeks, Chipotle struggled over a period of months. The piece notes that Costco’s outbreak was limited to a single California supplier and dealt with accordingly. While acknowledging Chipotle’s healthy, locally sourced foods with non-GMO and antibiotic free meat initiatives, the author notes Chipotle uses many of the same suppliers as other large-scale companies like McDonald’s uses for the bulk of its food products. The primary message is to solve problems quickly to avoid a drop in stock prices and limit lawsuits from injured parties. While no one can fault these goals, the significant differences in the two companies businesses and supplier base calls the comparison into question.

Left: Food Safety News image of E.Coli tainted Costco chicken salad
Right: CDC Map E.Coli outbreaks from Costco chicken salad.

The U.S. FDA investigation at Costco quickly identified the source of E. coli coming from vegetables in chicken salad from a single supplier and produced at a single location. Contrast that with the Chipotle website update which noted that in over 2,500 food, restaurant surfaces and equipment tests in affected stores, no E. coli was found. Additionally, none of the employees in affected stores tested positive for E. coli. Unlike Costco, national chain restaurants like Chipotle get their supplies from different sources; there’s no sense in shipping burrito wraps from California to Virginia when quality local sources exist. Restaurants simply don’t have the demand for one item that a Costco does, especially with scores of items and customer choice options on the menu. Chipotle’s fresh produce, meat, dairy, baked goods and meats require replacement almost daily. With much more limited space than a company like Costco, inventories at Chipotle are likely much smaller with significantly higher turnover. Despite criticism, Chipotle’s response seems to be in line with scientific evidence.

Despite the company’s battering, Chipotle announced they will close all stores from 11:00 AM to 3:00 PM on February 8, 2016 to review the new food safety procedures that have been put into place and review lessons learned from 2015 outbreaks in an All-Team Meeting. The company’s website announced the following

Chipotle’s enhanced food safety program is the product of a comprehensive reassessment of its food safety practices conducted with industry leading experts that included a farm-to-fork assessment of each ingredient Chipotle uses with an eye toward establishing the highest standards for safety. The program’s many components include:

• High-resolution DNA-based testing of many ingredients designed to ensure the quality and safety of ingredients before they are shipped to restaurants -- a testing program that far exceeds requirements of state and federal regulatory agencies, as well as industry standards.
• Changes to food prep and food handling practices, including washing and cutting of some produce items (such as tomatoes and romaine lettuce) and shredding cheese in central kitchens, blanching of some produce items (including avocados, onions and limes) in its restaurants, and new protocols for marinating chicken and steak.
• Enhanced internal training to ensure that all employees thoroughly understand the company’s high standards for food safety and food handling.
• Paid sick leave helping to ensure that ill employees have no incentive to work while ill.

 

For any company, the list of food safety practices above shows an admirable commitment to quality healthy foods without sacrificing safety. And like Costco, Chipotle’s commitment to employees is lauded in some circles as an example for other restaurants to follow. These practices will serve Chipotle, their employees and suppliers, and most importantly their customers well. That being said, the jury is still out regarding Chipotle’s ability to recover. In the past few days the company’s stock has risen over $50 in the past two weeks, one good sign.

 

 

In the end, consumers will determine if Chipotle’s approach works. Starbucks closed its U.S. stores nationwide on February 26, 2008 to retrain its baristas and regain their “Starbucks Experience”. Their stock has tripled since that time. Chipotle is making a statement with their action: we are not going to rush into “fixes” based on incomplete data or careful, strategic consideration to make sure we get it right, and we are willing to put our financial resources and future behind our plan which includes food choices health-conscious consumers are seeking. Time will determine if Chipotle succeeds despite naysayers and negative analyst sentiments.