It appeared that a publicly traded company like Chipotle was unstoppable and taking the fast causal restaurant industry by storm with its streamlined Mexican cuisine, but much of that success came to a halt with the E. Coli outbreak of July 2015, followed by outbreaks of other viruses in the months that followed. These outbreaks had a negative impact on the sales that they previously experienced, and it seemed like there was no end to the cavalcade of setbacks that headed their way at the time.
Responding to challenges
Despite these setbacks, they made the effort of trying to salvage their reputation among the customer base. In December 2015, Steve Ells, the founder of the company, issued an apology over the customers that had fallen ill while eating at various Chipotle restaurants.[i] Since that time, Chipotle has made other efforts to regain market share among the public.
For instance, they created a loyalty program for the summer called the Chiptopia program. The program relies on the number of visits made by the customer.[ii] The rewards that they could get include free chips and guacamole with their meal. This program essentially offers an incentive for diehard Chipotle lovers to regularly make purchases to receive free food.
Long-term improvements
Even profits for Chipotle have been improving compared to what they were facing last year. The profitability they had for the second quarter showed improvement thanks to the loyalty program they had instated. Chipotle still has a long way to go in regaining the trust of customers who used to dine at their restaurants but progress has been steady and will continue to improve.
What does this mean for other companies that are worried about facing the same dilemmas as Chipotle? When incidents like these occur, the impact on the company can be so great that it might take a while to fully recover from the incident and boost profit share. It does not mean that all is lost, but it is best to have preventative measures in place to avoid the situation.
Preventative measures
Food safety should be the number one priority of any company that wants to avoid the problems that Chipotle encountered. FDA standards need to be taken with the utmost regard and heavily stressed throughout all facets of the company. These standards and regulations need to be implemented when dealing with outside suppliers that provide the ingredients necessary to create these types of products.
Food safety tips
The CDC website also provides food safety tips that can be applied within restaurants. These are the following food safety measures that can be taken.[iii]
- Having employees wash their hands for at least 20 seconds regularly can make quite a dramatic difference in the prevention of passing on foodborne illnesses to customers.
- Fruits and vegetables need to be washed under running water for proper cleaning.
- Avoid washing raw meat to prevent cross-contamination to other kinds of food in the vicinity.
- 140 degrees Fahrenheit is considered a safe temperature for the food that is prepared in the kitchen.
- Different cutting boards need to be used for the types of ingredients used to further prevent cross-contamination.
- Refrigerators need to be kept at a temperature between 32 and 40 degrees Fahrenheit for proper cooling of food.
Moving forward
Other companies can avoid the problems that Chipotle had if they are willing to enforce strict standards on food safety from both an internal and external perspective. Even Chipotle has made improvements in the way that food is handled although the advice provided is meant to serve as a cautionary tale that needs to be studied.
Article sources
[i] Ian Harrison, "Sorry America: Chipotle CEO Offers Fat Newspaper Ad Apology," Eater, December 16, 2015, accessed August 8, 2016, http://www.eater.com/2015/12/16/10310980/chipotle-ceo-apology-steve-ells.
[ii] Sally French, "How to get a ton of free Chipotle this summer," MarketWatch, July 1, 2016, accessed August 8, 2016,
http://www.marketwatch.com/story/how-to-get-a-ton-of-free-chipotle-this-summer-2016-06-27.
[iii] "Food Safety," CDC, accessed August 8, 2016, http://www.cdc.gov/foodsafety/groups/consumers.html.