Chipotle has thrived in the fast-casual food industry by prioritizing sustainability in its supply chain. The company’s “Food with Integrity” policy focuses on sourcing food from suppliers that meet its requirements for animal welfare, sustainability, and social accountability. Pursuant to the California Transparency in Supply Chains Act of 2010, Chipotle publishes information on its website about its traceability program, under which the company performs periodic audits, implements certification standards, and holds their suppliers accountable for adhering to environmentally and socially sound practices. Chipotle has been a leader in its field.
As Chipotle has learned, however, adhering to its policies (and, really, doing nearly everything right) does not guarantee contamination-free or sell-able food. Chipotle stopped serving pork for the better part of 2015 after a routine audit of one of its pork suppliers revealed practices not in line with the company’s “Food with Integrity” policy. Sales took a hit, but the company was applauded for sticking to its principles.
Then, Chipotle started experiencing contamination issues with its locally-sourced ingredients. The first of these highly publicized outbreaks occurred in Washington and Oregon, where Chipotle voluntarily closed nearly 43 locations while it launched an investigation. What was thought to be a one-off incident quickly spiraled into a series of illnesses linked to the company. Reports of E. coli started coming from states including California, New York, and Ohio. While the recent norovirus incident in Boston was not related to food at all, the timing could not have been worse.
As the company predicated in its 2014 annual report, Chipotle’s reliance on fresh produce left the company susceptible to these food-borne illness outbreaks. “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.” Chipotle’s traceability system helped the company react quickly at the first sign of a problem. However, while traceability is important, equally important is oversight in the supply chain.
To that end, Chipotle implemented an enhanced food safety and food handling program. CEO Steve Ells promised an enhanced safety and quality assurance program for its fresh produce suppliers. IEH Laboratories and Consulting Group was tasked with designing a more robust food safety program and to help Chipotle identify opportunities to enhance food safety practices throughout its operations. Program implementations include DNA-based testing of all fresh produce, end-of-shelf-life testing, and employee training on food handling. “While it is never possible to completely eliminate all risk, this program eliminates or mitigates risk to a level near zero, and will establish Chipotle as the industry leader in this area.” Mansour Samadpour, Ph.D., CEO of IEH Laboratories and Consulting Group, Chipotle Press Release.
The lesson here is that sustainability and responsible CSR measures are important, but may complicate supply chains in other ways – a challenge facing producers going forward.