Chipotle Mexican Grill has been under fire lately for a rash of E. coli and norovirus infections that have sickened dozens of customers nationwide. In response, Chipotle is offering an apology to customers with a promise to improve food safety procedures.
Steve Ells, co-CEO and founder of Chipotle, went on NBC’s Today show to express his concern for customers and emphasize the company’s commitment to fix the problem.
“This was a very unfortunate incident and I’m deeply sorry that 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.
The new food safety procedures will be 10 to 15 years ahead of industry standards, and will essentially eliminate any future outbreaks. Part of the plan is to better train employees in food safety and handling, as well as a system to track performance of food suppliers.
According to Jack Hartung, Chipotle’s Chief Financial Officer, offering the new standards will come with a heavy price, but needs to be implemented quickly.
“It’s going to be a significant investment. We’re not going to be very efficient at doing this right now. What’s most important is that we get this done, that food safety is the most important thing that we focus on right now, and we’ve got to act with a sense of urgency, which is what we’re doing, to get it done.”
Company executives promised not to pass the cost of the E. coli and norovirus outbreaks onto consumers through price increases or smaller portion sizes. The plan is to take the additional expenses out of profits. That may change, as Mr. Hartung did mention that a price increase may come in 2017.
Since this past Sunday, 120 college students have fallen ill after eating at a Boston Chipotle restaurant. The students complained of nausea, vomiting, and diarrhea.
After laboratory testing, the Boston Public Health Commission determined the students had a norovirus infection. Health authorities believe the infection initially started at the Chipotle restaurant, and Boston’s Inspection Service Department has since closed the restaurant.
Once employees are being tested clean for a norovirus infection and a comprehensive cleaning is completed, the Boston restaurant plans to reopen with the Health Commission’s blessing.
Earlier this year, an E. coli outbreak caused the closure of over 40 Chipotle restaurants in nine states. As of last Friday, 52 cases of infection have been confirmed, and the Food and Drug Administration (FDA) is still searching for the source. So far, none of the cases have been linked to the Boston location.
Investors responded to the CEO’s offer of apology by sending the Chipotle stock price up 3.6 percent to $567.71 in early trading. However, it would seem Wall Street is still rather nervous about the company recovering and remaining profitable. The stock price is currently down over 20 percent from its 52-week high of $758.61.
Some health experts fear outbreaks like the ones that have affected Chipotle will continue to rise. Norovirus is especially contagious, and can be easily spread through food, poor hygiene, and by touching a contaminated surface. Some say that another norovirus infection outbreak affecting a different restaurant chain is likely to happen within the next few months.
How the recent outbreaks will affect the popular burrito chain’s reputation is yet to be seen. Company executives expect some loss of loyal customers, and estimate an 8 to 11 percent decline in same-store sales for the fourth-quarter. Yet, Mr. Ells feels confident the company will recover.
Since its beginnings, the Mexican grill has committed to only using fresh produce, antibiotic-free meat, and ingredients without genetically modified organisms (GMOs). The company hopes that this continued commitment to quality and enhanced food safety protocols will win customers back. Yet, it may take some time before people feel it’s safe to eat Chipotle food again.
Despite Chipotle offering an apology for the recent infections, executives noted that there is no specific timetable for when the outbreaks will be officially over. With the norovirus and E. coli sources still unknown, the number of infection cases may continue to increase in the coming weeks and months.
[Photo by Joe Raedle/Getty Images]