Chipotle: Fast Food With Integrity - Essay Sample

Introduction

Chipotle Mexican Grill, Inc. It is an informal food chain with a "Fast Casual" service, where its CEO, founder, and president, is Steve Ells, founded in Denver in 1993 and whose value proposition is "Food with Integrity", in so much must "find the best ingredients that were harvested with respect to animals, the environment and farmers." In this sense, it is an informal Mexican fast food restaurant that combines the speed, convenience and price of fast food with the quality and atmosphere of a casual restaurant. Therefore, they sell to the consumer an experience that goes beyond the typical fast food. Their products, a focused menu of burritos, tacos, burrito bowls, and salads, are made with fresh, high-quality ingredients that are prepared with classic cooking methods and served in an interactive style that allows people to get exactly what they want. They want. Likewise, Chipotle states that the search for its ingredients must be with responsibility and respect for what use whole, unprocessed ingredients and without the use of colors, flavors or other additives that are typically found in fast food. Despite its value proposition, the company is in a challenge, since the quality they seek to offer does not imply that the functional results are good. In fact, from outbreaks of E. coli in several of its restaurants, causing a series of poisonings and health problems that led consumers to demand the brand and its market value to fall quickly, in addition to facing a wave of distrust on the part of consumers for fear of contracting diseases.

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Bacteria of the genus E. coli are unicellular and a common inhabitant of the intestines of all animals, including humans and therefore in sewage. Although they are considered along with other bacteria necessary for the proper functioning of the digestive process to fulfill the function of suppressing the growth of harmful species of bacteria and synthesize appreciable amounts of vitamins, they are associated with virulence. There are few strains of E. coli capable of causing diseases to humans. However, the type of food that can host these pathogenic bacteria is still unknown. Said strains are: enterotoxigenic E. coli, enteropathogenic E. coli, enteroinvasive E. coli, enterohemorrhagic E. coli, enteroadherent or enteroaggregative E. coli. The usual way of acquiring it is for the consumption of meat (mainly beef) that is not well cooked, drinking contaminated water (impure), drinking milk without first having been steamed (raw) and working with livestock (for not maximizing security measures). Thus, the meat can be contaminated in the slaughter process of the animal, and it is common to contract this bacterium through the ingestion of meat that has not been sufficient time in cooking. Also, one of the main causes is poor hygiene, not washing your hands well after leaving the bathroom (with soap and water), which makes people infected with E. coli highly contagious, since, when handling Foods in this way automatically contaminate them.

Chipotle Crisis

As of 2015, Chipotle Mexican Grill, Inc. (CMG) faced a health crisis after illnesses contracted in establishments and authorities linked to outbreaks of E. coli that forced the company to take drastic measures. Although the problem does not have to do directly with their value proposition, defrauding their consumers in their policy of processing and origin of their food, has failed in public health, the opinion and confidence of these. In this order of ideas, the first cases of the presence of the bacterium E Coli in restaurants of the chain appeared in mid-July 2015 (Gikerson, Swenson & Anderson, 2016). However, its recurrence led to the progressive closure of several restaurants in various areas of the United States. Especially at the end of the same year, where there was a decrease in the value of the stock market of more than 4% and a decrease in sales of 14%. In this last stage, the situation became even more alarming because, in addition to the presence of the cases associated with the E. coli bacterium, cases of norovirus and salmonella were added, representing a more shocking crisis for consumers.

To face the crisis, CMG tried various efforts to end the health crisis. Among the measures were: the massive closure of the restaurants to carry out a thorough cleaning of the establishments, training for the employees about the handling of the food avoiding new infectious outbreaks, a crisis communication strategy whose contingency plan involves various media. This last measure is the one that had the most incidents since they forced the brand to redesign its relationship with consumers. That is, if they tried to maintain themselves as a brand different from the rest whose main promotional method is the promotion is the advertising of mouth in the mouth, now faced with the crisis they faced, they had to establish a direct and constant relationship with the main North American journalists and a huge participation of the chain in social networks, answering and informing their consumers about the possible problems in the restaurants (Taylor, 2017). With these advertising measures it was tried to have a consistent plan to consolidate, as it did in 2012 with its first campaign "Back to The Start" winner of the Cannes 2012 in the categories of Film and Branded Content & Entertainment, its vision and firm commitment with consumers in order to generate growth and their confidence through a transformation where the vision of the company is accepted as a part of their daily life, creating awareness and prioritizing social responsibility in people (Gilliard, Hoffman, & Baalbaki, 2017). That is consumer awareness in the consumption of foods prepared with ingredients that come from sustainable sources and friendly to the environment that allows optimizing the efficiency of the chain's restaurants while decreasing the company's carbon footprint.

The share price of Chipotle Mexican Grill, Inc. in the stock market had fallen after the health problems it had with outbreaks due to E. coli bacterial strains. As of mid-2015 and with greater incidence with the recurrence of these at the end of that same year. The stock decreased its value by almost 50%. For October 2015, it was quoted on the Stock Exchange with a value of $ 750.42. However, investors have tried to contribute to the brand and give it time to recover from the health crisis that the brand went through (Walker & Merkley, 2017). It is evident that, with this, they believe in the chain and the values that it transmits. Once the movement of the value of the stock in the Chipotle Mexican Grill, Inc. stock exchange is observed, and legal actions against it are taken into account with respect to the health crisis, there is evidence of dissatisfaction on the part of both consumers as well as investors, which leaves a clear message that a food safety problem takes a long time to recover.

While the company made drastic decisions, it was not enough for a quick recovery of it. Its commitment to its consumers, especially by making the mistakes made transparent and committing itself to solving health problems, in addition to pretending to be the producer of direct solar energy in its field in order to further reduce its carbon footprint and effort for presenting foods with integrity where the source of them is sustainable, they are not enough for Chipotle Mexican Grill, Inc. to justify higher prices on its menu compared to the products offered by the brands that compete with them, such as Taco Bell and Qdoba, brands that offer similar services but at lower cost, despite being of lower quality (Ragas & Roberts, 2009).

Chipotle needs to rebuild its brand to ensure that it is successful even in the future. Several recommendations will help Chipotle overcome the crisis it went through. First and foremost, Chipotle is already known for its natural, casual foods and organic meals; this in itself provides it with a competitive edge and advantage over all its competitors. Several recommendations will be provided on how Chipotle can increase its revenue and market share, as well as increasing the confidence of their customers. These recommendations will also result in the growth of Pizzeria Locale and ShopHouse as well.

First Recommendation: Investing in Appropriate Corrective Measures

The company can recover from the current crisis if it invests in appropriate corrective measure (Taylor, 2017). They have to create a whole system of preventive controls in the restaurant chain. Chipotle needs to create a culture of food safety within the company so that each person working in the chain has food security present at all times and take all necessary preventive measures.

Second Recommendation: Correcting Its Supply Chain

There are so many food suppliers in the company that it is very difficult to trace exactly where they come from and ensure that all these suppliers are compatible. Chipotle's supply chain is complex and becomes difficult to pinpoint the exact source of the problem. The company cannot adequately explain where many of its ingredients are obtained. As such, there is a need for the company to strengthen controls over the supply chain since any type of food can be contaminated if preventive measures are not taken (Gikerson, Swenson, & Anderson, 2016). Chipotle can recover if the company can demonstrate that it is taking special care with its supply chain. It has to demonstrate that the benefits it claims to be provided with natural ingredients of local origin will also translate into higher levels of safety.

Third Recommendation: Toughen Rules on the Workplace Regarding Quality

Although Chipotle serves many raw ingredients, the outbreak that occurred was probably a problem caused by a sick employee who transmitted the virus. An investigation by the Boston Public Health Commission identified a series of violations at the location in question, including the storage of meat at the wrong temperature and a sick employee in the workplace, according to a report published in the New York Post. Chipotle needs to make sure that all items are safe, and make sure that its employees take special care with hand washing and other safety procedures. Maybe the company should also test the food before and after it is served (Gilliard, Hoffman, & Baalbaki, 2017). There is always something that can go wrong, and it is difficult to guarantee food security. However, preventive controls can be implemented that will solve most problems. In addition to thoroughly cleaning the affected premises, they should replace ingredients and change the preparation of food. It should also reinforce controls throughout the chain that supplies the products that make up its menu.

Fourth recommendation:

Chipotle Mexican Food should complement its previous strategy, which was based on providing casual fast food based on high-quality organic ingredients, with locations that are aesthetically well displayed, with the support of highly qualified personnel in customer service and integrity, taking into account the effects of the environment (Kirshner-Breen, 2017). Being a new business, Chipotle could take advantage of its current position, since it is known for its quality and food made from organic ingredients. Additionally, it should look for a plus in how to generate added value to its customers, directing it on a healthy food aspect. It should also create a strategy that allows the increase of the profitability of the new business units under the new perspective of Asian food.

How do the CHIPOTLE's present SWOTs address the threats from the present crisis? Identify the SWOTs and provide solutions as to how to return to profitability?

Strengths

Extra hygiene and safety measures are higher than the standard in the industry. This is main...