Chipotle’s Food Safety Issues Strike Again

On December 10, 2015, in response to the series of foodborne illness outbreaks plaguing the restaurant, Chipotle’s then-CEO and founder, Steve Ellis, appeared on the Today Show, stating, “It has caused us to put in place practices that our epidemiologist expert says will put us 10 to 15 years ahead of industry norms, and I believe this will be the safest restaurant to eat at. This was a very unfortunate incident and I’m deeply sorry this happened, but the procedures we’re putting in place today are so above industry norms that we are going to be the safest place to eat.”

As a result of the 2015 incident, the fast casual restaurant chain increased the number of inspections by both internal teams and independent auditors. Chipotle also launched new handling procedures for meats, produce and citrus, and instituted new comprehensive sanitizing protocols.

Regardless, problems have arisen again. The latest episode came to the public’s attention on Monday, July 30, when the Mexican fast casual chain closed a location in Powell, Ohio, following online reports from over 250 individuals who claimed they’d contracted food poisoning there. Since that time, health officials have stated 647 people self-reported gastrointestinal symptoms after eating at the Chipotle in question between July 26 and July 30.

On August 16, Ohio-based Delaware District Health District issued a statement, noting although food samples taken from the chain had tested negative for bacteria, stool samples collected from the victims and tested by the CDC came up positive for the bacteria Clostridium perfringens. C. perfringens, one of the most common causes of food poisoning in the United States, attacks the gastrointestinal tract. It often occurs when food is prepared in large quantities and left at an unsafe temperature for a long period before being served, which is believed to be the case at the Ohio location.

Since that time, two victims of the Ohio incident have filed lawsuits against Chipotle. Plaintiffs Filip Syzller and Clayton Jones ate chicken tacos and a burrito bowl, respectively, before falling violently ill and seeking medical treatment. The lawsuits allege that Chipotle had not done enough to ensure food safety.

For their part, current Chipotle CEO Brian Niccol issued a statement, saying, “Chipotle has a zero-tolerance policy for any violations of our stringent food safety standards and we are committed to doing all we can to ensure it does not happen again. Once we identified this incident, we acted quickly to close the Powell restaurant and implemented our food safety response protocols that include total replacement of all food inventory and complete cleaning and sanitization of the restaurant.”

Niccol joined the company in March of this year, taking the reins from Ellis, who now serves as executive chairman. Niccol, previously CEO of Taco Bell and credited with its turnaround, was hailed by Wall Street as a would-be savior for the troubled brand.

In addition to Niccol’s statement, the company has moved forward with an aggressive retraining agenda, with thousands of employees at over 2,400 Chipotle restaurants soon to undergo food safety training, predominantly during early morning, pre-business hours. Chipotle spokeswoman Laurie Schalow told Nation’s Restaurant News, “We are retraining all employees on our top food safety protocols (i.e. proper hand washing, hot and cold temperature holding procedures, cooking and prep procedures, etc.).”

Burt Flickinger III, managing director of New York-based Strategic Resource Group, a consulting firm focused on retail chains, wholesalers, suppliers and investment companies, feels Chipotle’s nationwide employee retraining plan is a good one. “The food safety problems don’t seem to stop,” he said. “What they’re doing is very commendable, but it’s very necessary for the ongoing viability of the business, because they’ve survived one or two more consumer health concerns than a lot of other restaurants, and they have to get it right.”

Similarly, Lynne Collier, a senior restaurant analyst at Canaccord Genuity investment firm was positive on the decision, noting, “It’s definitely a good move, both from a public appearance standpoint and also from a business perspective,” she said. “It may prevent a future incident, which is also very costly.”

While it’s impossible to predict consumer response to the continued food safety issues, investor confidence in Chipotle appears to be strong. Although the share price dropped to $433.66 on July 31, on August 15 it climbed to an all-time height of $525.89, far above its $320 average in March, when Ellis first took over.