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Chipotle’s burrito bribe and food safety strategy

An all-staff meeting that stretched across time zones and kept all Chipotle Mexican Grill locations closed during Monday’s lunch rush was long on promises to employees and customers.

Chipotle meeting

Monday’s all-staff meeting with Chipotle Mexican Grill’s 50,000 employees included live Tweets such as this photo of founder/co-CEO Steve Ells, left, and other executives.

The meeting served as a preface to the Denver-based fast food chain’s biggest marketing campaign ever and was billed as the prologue to a string of six foodborne illness outbreaks linked to the chain. Those outbreaks sickened at least 600 people across more than a dozen states from July through December in 2015

The consumer portion of the $50 million marketing blitz scheduled to launch next week will not reference food safety issues, according to Chipotle officials.

The Monday meeting with 50,000 employees included pep talks and directives from Chipotle’s C-Suite, including founder and co-CEO Steve Ells and co-CEO Monty Moran, according to the Associated Press and Fast Company, which had reporters at Chipotle meeting locations in New York City and San Francisco, respectively.

“Some employees groaned as video after video exhaustively explained the outbreaks and new sanitation and food safety procedures,” reported Fast Company.

One of those new procedures is the requirement that managers “ensure” that employees wash their hands for a minimum of 20 seconds — follow up with hand sanitizer — once an hour.

Hand washing, according to public health officials, is an important step to preventing the spread of norovirus, which was the pathogen in two of Chipotle’s outbreaks in 2015. Ells and other company executives have blamed employees for those outbreaks in Boston and Simi Valley, Calif.

“Both cases were likely caused by a Chipotle employee who worked while sick, in violation of strict policies designed to discourage this,” according to Chipotle’s revised food safety website.

Besides the new hand-washing requirements, the company officials told employees an automatic closure policy is now in effect if an employee or customer vomits in a Chipotle restaurant.

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“When anyone vomits in the back of the house or the front line, this is a red event, which means we close the restaurant immediately,” Chipotle restaurant support officer Gretchen Selfridge told employees via a video link, the Associated Press reported.

Chipotle also now requires employees to stay home from work on paid sick leave for five days after their symptoms have gone away “when circumstances warrant.”

However, company officials did not respond to requests for details on what circumstances would warrant the five-day leave or what documentation employees would have to provide to be eligible for that leave.

Blame game strategy

Similar to placing the blame for the norovirus outbreaks on employees, Chipotle executives blamed a tomato supplier for a Salmonella outbreak in Minnesota that sickened 64 people in August and September.

However, the supplier contends tons of its tomatoes went to other customers in Minnesota with no reports of illnesses. The outbreak involved 22 Chipotle restaurants.

chipotle

For the two E. coli outbreaks linked to the fast food chain in 2015 — federal officials say distinctly different isolates of E. coli were involved but Chipotle executives have repeatedly said there was only one outbreak — a company insider blamed beef from Australia.

A spokesman from the U.S. Department of Agriculture’s Food Safety Inspection Service (FSIS) said there is no evidence that Australian beef was responsible for the E. coli contamination. Australian officials were more specific.

“Australia had no U.S. port of entry detections of bacterial contamination — E. coli — in the almost 500 million kilograms (1.1 million pounds) of beef exported in 2014 and 547 million kilograms of beef exported up until December 2015,” a spokesperson for the Australian Department of Agriculture told the Australian Associated Press.

The burrito offer

The Monday staff meeting may have frustrated lunch regulars Monday because it delayed opening time to 3 p.m. nationwide, but it gave company executives an opportunity for lots of Tweets and soundbites.

Chipotle-burrito

An apology for the inconvenience of the late openings in the form of a free burrito offer gave the corporate executives an opportunity to collect information on their customers.

The offer invited consumers to send a text to get a coupon for a free burrito. In the fine print, the offer told consumers they were giving the fast food chain permission to collect their personal information. Chipotle will use that information to contact customers with promotional offers for itself and its “business partners,” according to the company’s privacy policy. It may also end up in the hands of other entities.

“Chipotle sometimes contacts other companies for a variety of reasons, such as fulfilling orders, assisting with promotions, and providing technical services for our websites,” according to the privacy policy.

“These companies may have access to personal information if they need it to do their work. However, we will generally obligate these companies to use any personal information only for the purpose of performing their work.”

In an unfortunate telephone number twist, the Associated Press reported a Washington D.C. attorney was flooded with texts from people seeking the free burritos. His phone number was one digit off from the burrito promotion number.

Moving forward

Earlier this month Ells and other Chipotle executives told investors and analysts they expect business to return to normal levels by 2017. The company saw its stock drop from a 52-week high of $758 in the summer of 2015 to a 52-week low of $399 in January.

logo-Chipotle-grower-initiative

To encourage customers to return, after seeing a 36 percent year-to-year drop for January sales last month, Chipotle plans to launch a $10 million local grower initiative to help smaller suppliers meet food safety requirements. The corporation does not yet have details on how that money will be allocated.

Supporting the locally grown movement is something Chipotle has referenced in ad campaigns, but company officials revealed in recent months only about 10 percent of the food they sell is local.

One thing about Chipotle’s future is certain. The company will have extra costs as it moves forward. Costs for pathogen tests, costs for paid sick leave and costs to defend itself in federal and state courts across the country.

Stockholders have filed at least two federal court cases seeking class action status. The civil suits claim Chipotle violated the Securities Exchange Act by making false and/or misleading statements. The stockholders contend:

  • Chipotle’s quality controls were not in compliance with applicable consumer and workplace safety regulations;
  • Chipotle’s quality controls were inadequate to safeguard consumer and employee health; and
  • as a result of the foregoing, Chipotle’s public statements were materially false and misleading at all relevant times.

Chipotle also faces numerous civil claims by outbreak victims ad their families, including a case filed by several high school students and one parent who were sickened in the Simi Valley norovirus outbreak. That case seeks class action and could include more than 1,000 members.

More than 100 other civil cases have been filed by individual victims, including about 100 victim who are represented by Marler Clark LLP in Seattle. Partner Bill Marler is publisher of Food Safety News.

The documented foodborne illness outbreaks linked to Chipotle in 2015 were:

  • Seattle — E. coli O157:H7, July 2015, five sick people, source unknown;
  • Simi Valley, Calif. — Norovirus, August 2015, 234 people, source was sick employee;
  • Minnesota — Salmonella Newport, August and September 2015, 64 sick people, source was tomatoes but it is not known at what point in the field-to-fork chain the pathogen was introduced;
  • Nine states — E. coli O26, began October 2015 and declared over Feb. 1, 55 sick people, source unknown, states involved are California, Delaware, Illinois, Kentucky, Maryland, Minnesota, New York, Ohio, Oregon, Pennsylvania and Washington;
  • Boston — Norovirus, December 2015, 151 sick people, source was sick employee; and
  • Three states — E. coli O26, began December 2015 declared over Feb. 1, five sick people, source unknown, states involved are Kansas, Oklahoma and Nebraska.

 

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