For Chipotle Mexican Grill Restaurants, the E. coli outbreak it experienced at restaurants in 11 states is now officially in the past, according to the Centers for Disease Control and Prevention. The damage is done and, for Chipotle management, rebuilding customer engagement and brand loyalty through a new food safety program is paramount for 2016 and beyond.
Chipotle CEO Steve Ells addressed all of these issues at the fourth-quarter earnings conference call on Feb. 2.
“The fourth quarter was, without question, the most challenging in our history, but we have responded and have implemented an industry-leading food safety program that reduces our food safety risk to as low to zero as possible,” Ells said, according to Seeking Alpha. “And yesterday, the Centers for Disease Control and Prevention announced that its E. coli investigation is over. And as we emerge from this difficult time, we can focus on what will be our primary objective for 2016: Making sure our food is as safe as possible and welcoming customers back to our restaurants as our teams deliver an extraordinary dining experience.”
Ells is grateful for the way company restaurants and support departments responded in the past few months.
“We’ve been asking a lot of our teams and they effectively implemented substantial improvements to our food safety practices,” he explained. “These new enhanced standards will establish Chipotle as an industry leader in food safety. While this has been an unfortunate set of events, I am confident that Chipotle will emerge as a stronger company than we were before our recent challenges. Since opening the first Chipotle restaurant 22 years ago, it has been our aim to serve our guests food that is safe, delicious, and wholesome, but the events of the last few months have shown us that we need to do better.”
Fourth-quarter revenue fell 7%, to $998. But, for the full year, revenue increased 10%, to $4.5 billion,
“To achieve our goal of establishing Chipotle as a leader in food safety, we have completed a comprehensive reassessment of our supply chain and restaurant practices from the farms and ranches that supply our ingredients to the restaurants where we are serving customers to evaluate each and every ingredient,” Ells said. “The objective of this food safety system is that we will reduce the risk of something like this happening again in our restaurants to as near to zero as possible.”
In developing the plan, Chipotle established testing and safety protocols that go well beyond industry standards to ensure the quality and safety of all its ingredients.
“The plan is designed to prevent unsafe food from ever entering our restaurants through the use of extensive testing and through washing in central kitchens,” Ells said. “And even in the unlikely event that some pathogen still finds its way into our restaurants, we’ve improved our restaurant procedures to provide additional protection to prevent contamination of our food. Among the specific components of this enhanced food safety system and plan are: High-resolution DNA-based testing of fresh produce and meats to identify harmful bacteria in these ingredients before they enter our supply. Under this testing protocol, a batch of any ingredient that does not meet our testing standards will be rejected well before it reaches our restaurants. These testing programs will allow us to continually improve our supply chain.”
Second, Chipotle added important changes to food handling and food preparation procedures, including: Preparing tomatoes, lettuce, and bell pepper in the central kitchen and blanching certain produce items including avocados, onions, jalapeños, and citrus in restaurants before they are used, and a new procedure for marinating chicken and steak, which now happens distinct from and after the preparation of other fresh items.
“We’re also marinating chopped onions, jalapeños, and cilantro in citrus juice when we make salsas and guacamole,” Ells added. “This process brings out more flavor from these ingredients and adds another measure of food safety. And third, we have an enhanced crew training program to be sure all of our teams understand all of the facets of our new food safety program. Through education about food-borne illness and explaining why we have made these changes, we can assure that we are empowering our employees to carry out all of these new protocols.”