Non-GMO, organic, locally sourced . . . these terms are now a common part of our food vocabulary, although not typically associated with fast food. Chipotle entered the fast-food scene in the early 1990s with a seemingly impossible goal of creating a healthy fast-food alternative. Chipotle’s promise of “food with integrity” includes fresh, locally sourced ingredients and naturally raised meats. They effectively met this promise for many years,

but as the popular fast-food chain grew to more than 2,200 locations, the restaurant’s ability to promise such quality while meeting food safety standards has become a challenge. Attempting to deliver on this promise on a national scale has created a complex and risky supply chain challenge. Chipotle’s food contamination problems started with an E. coli outbreak in July 2015 in Seattle. Next was a norovirus outbreak in California, followed by a salmonella infection in Minnesota. Other foodborne illnesses emerged among Chipotle customers in nine more states. Over the course of a few months, more than 500 customers were sick from contaminated food in Chipotle stores across the country. Sales dropped 30 percent during the outbreak, and several stores closed for an extended period of time. The company’s stock value dropped, and the company faced several lawsuits from customers who were sickened by food consumed at one of the stores.56 Most national fast-food restaurant chains control food quality by using a central source for ingredients, exposing the supply chain to fewer outside elements. Simply put, the more basic the food chain, the easier it is to control. To keep its fresh food promise, however, Chipotle sought to prepare as many foods as possible at the local stores. It also sourced ingredients locally wherever possible, creating relationships with hundreds of vendors. The complexity of its food sourcing, coupled with in-store food preparation, is most likely what caused the food contamination problem. There were no known specific negligent acts on the part of Chipotle; the problems occurred because offering fresh food on such a large scale creates a situation where quality control is difficult.

In most cases, Chipotle did not know which foods were contaminated, making the fix even more challenging. In response to the crisis, the company has implemented new controls to test for meat contamination and also changed some food-handling and preparation procedures. It has shifted much of its food preparation to centralized kitchens and started sourcing ingredients from fewer vendors,

much like its fast-food competitors have done for years. To kick off its new standards, Chipotle closed all of its stores for an afternoon to train employees consistently on the new foodhandling standards.57 While it seems the company is moving in the right direction, critics suggest that a company that claims to focus so much on food quality should have done a better job focusing on food safety. The challenges for the company continue as it works to rebuild not only the company, but consumer trust. Meanwhile, founder and CEO Steve Ells has stepped away from the company he founded.58 Under new management,

it appears that the company’s turnaround is working as it delivered better-than-expected sales numbers.

Discussion Questions 

1. Why is it important for Chipotle to revise the company’s food handling and food supply standards?

2. Which controls would be more important to Chipotle: feedforward,

concurrent, or feedback? Explain. Why is this level of managerial controls necessary?

3. How can Chipotle make sure that employees are following the new food-handling standards?

4. Explain the statement: “The more basic the food chain, the easier it is to control.” Is there any managerial advice on control here? Explain.

5. What roles do social responsibility and ethical behavior play in ensuring that controls are appropriate and working?