Reference no: EM132243074
Case Assignment: Chipotle Mexican Grill
Chipotle, the popular burrito chain known for serving high-quality, fresh ingredients, has been experiencing a rough few years. The first of their troubles began in 2015 with a months-long carnitas shortage. The company pulled pork off their menus when it was discovered that a supplier had failed to follow animal welfare standards.
Then, they experienced a string of foodborne illnesses. They had a norovirus outbreak in Simi Valley, California, in August 2015; cases of salmonella in Minnesota that were traced back to contaminated tomatoes; and in December, an E. coli outbreak in the Pacific Northwest. The chain had to close all 43 restaurants in Washington and Oregon for several days.
“Having three outbreaks over the course of two to three months is highly unusual,” said food poisoning attorney Bill Marler. “I think corporate leadership needs to step back and look at their food safety culture.”
A second wave of E. coli caused five additional illnesses in December. And then just a few weeks later, a case of norovirus caused an incident at a Chipotle in Boston that sickened more than 140 students at Boston College.
Chipotle’s use of fresh meat and produce is one of the company’s greatest competitive advantages against other fast food chains, but it has also made it more vulnerable. “We may be at a higher risk for food-borne illness outbreaks than some competitors due to our use of fresh produce and meats rather than frozen, and our reliance on employees cooking with traditional methods rather than automation,” the company stated in their most recent annual report.
“With the degree of in-store food preparation of all incoming items, I think it's potentially much harder to control the consistency of good food handling and you'd be much more likely to be handling meat and poultry, as well as fresh produce, all in close proximity,” said Trevor Suslow, an extension research specialist in UC Davis’s plant sciences division.
With several food contamination issues over the course of just a few months, many customers have been scared away, despite Chipotle’s efforts to make improvements. Early in 2016, Chipotle closed all restaurants for a full-day, all-staff food safety meeting. Then, in February, they invited customers to give Chipotle another chance by offering them a free burrito. This aggressive marketing campaign began a slow sales recovery.
The company also announced the hiring of James Marsden in March 2016. He is an expert on E. coli and listeria in processed meats, and he was brought on as executive director of food safety.
Chipotle pledges to become the “safest restaurant to eat at,” said Steve Ells, Chipotle co-CEO. It will be a long road for Chipotle to win back all of the customers lost due to food safety issues, an endeavor that will succeed only if Chipotle can maintain a clean health record for an extended period of time.
TRUE/FALSE
1. The pork shortage was a supply chain management issue for Chipotle.
2. Chipotle has an agile supply chain because they use only fresh produce in their stores.
3. It is important for Chipotle to maintain a good supplier relationship management process because they use so many local suppliers.
4. Chipotle had to enact their returns management processes after customers stopped coming because of the food safety issues.
5. Chipotle practices sustainable supply chain management.