Like Icarus, Denver-based Chipotle’s stock has soared over the past several years, peaking at $749.12 in August. But since mid-October, the stock has lost its wings, plummeting 25.3 percent, as of Wednesday, following a nine-state E. coli scandal that sickened dozens — the fifth foodborne illness outbreak of the year linked to the company.
Now, Chipotle’s traceability department has reacted in a way that would no doubt shock its marketing department: by embracing Big Food.
The image Chipotle has long drawn of itself for consumers is of a company that eschews so-called “industrial” food in favor of local, organic and sustainable ingredients. Chipotle’s “Scarecrow” video, caricaturing a cartoony and scary industrial food system that pilloried how food is conventionally produced, has drawn over 15 million views.
But animations don’t jibe with the reality of operating a multibillion-dollar enterprise. Chipotle has quietly relied on industrial food production to meet the needs of its customers for years. Its supply chain is full of Big Food, from contracting with a stainless-steel tortilla factory to buying feedlot-finished beef to using the same mega-distributors as McDonald’s, Taco Bell, and Denny’s.
Chipotle has also used FoodLogiQ, a North Carolina company that provides supply-chain traceability to companies. Chipotle’s supply-chain partners in this program are all members of the “industrial” food system Chipotle claims it doesn’t like.
But traceability, which involves the smattering of small, independent farms in Chipotle’s supply chain, has confounded the company in dealing with outbreaks of E. coli this year. Investigators have so far been unable to determine the exact source of the bacteria.
As a result, the company announced last Friday that it is tightening guidelines for its suppliers, including DNA-based testing of produce. That decision is expected to reduce the amount of local produce used by the chain, according to a spokesman.
This move towards “Bigger Food” is just the latest instance of reality throwing cold water on a warm and fuzzy — and vapid — marketing narrative.
Earlier this year, Chipotle announced it was ditching genetically modified foods, or GMOs, from its food — a move that drew rebuke from outlets such as NPR, which rightly pointed out that worldwide scientific bodies consider these foods just as safe as other foods, in contrast to the wild ramblings of Internet denizens (often funded by commercial organic interests).
Chipotle also faced a months-long pork shortage that affected one-third of its stores this year. The chain eventually found a solution by sourcing pork from a UK supplier. But this producer doesn’t abide by Chipotle’s no-antibiotics-ever policy — a policy that Chipotle now admits has no effect on meat after years of misleadingly marketing “antibiotic-free” meat (all animals must go through a withdrawal time to eliminate drug residue). This isn’t the first time local food has failed to provide needed supply: Chipotle also imports much of its beef from Australia.
Chipotle has held itself out as the example a big company with “Food With Integrity” that the progressive food movement can get behind, even as it quietly reaped the rewards of an advanced food system. But the chickens have been coming home to roost. Big Food may not need Chipotle, but Chipotle needs Big Food.
But is Big Food so bad, or just a contrived boogeyman? According to the U.S. Department of Agriculture, 97 percent of farms are family-owned. A farmer today can raise more food on less land than his predecessors. The mainstream food system is what feeds Americans affordably. It’s the food ideologists who want to roll back the clock to a more “organic” — meaning less technological — time. This makes as much sense as ditching cars for the horse and buggy.
Chipotle’s owners have made a pretty penny blasting conventional agriculture over the years. Now, with the company’s stock in freefall, Chipotle’s future may lay in working with the hands that feed us, instead of biting them.
Will Coggin is director of research at the Center for Consumer Freedom in Washington, D.C.
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