Chipotle Mexican Grill's (NYSE:CMG) motto is “Food with integrity” and over many years they've worked very hard to source the best food products and build one of the best brands in the country.
In the latter half of 2015 there were six separate food borne illness outbreaks traced to Chipotle Restaurants, sickening over 500 people in 40 states.* In Seattle, five people were sickened with E. coli O157:H7, source: unknown. In Simi Valley, CA, 234 people were sickened with Norovirus, source: unknown. In Minnesota, 64 people were sickened with Salmonella Newport, source: tomatoes. In CA, IL, MD, MN, NY, OH, OR, PA, WA 52 people were sickened with E. coli O26, source: unknown. In Boston 136 people were sickened with Norovirus, source: unknown. Fortunately there were no known fatalities.
The cost of lost sales, re-training of employees, and the recent purchases of new air purifiers and ice machine sanitizers is sure to tally up to many millions of dollars for the 2200-unit chain.*
In August of 2015, CMG - once Wall Street’s hottest restaurant stock - was valued at $759 a share. With 29,3000,000 shares outstanding, that’s a market capitalization of over $23 billion. Fast forward one year after the six food borne illness outbreaks and CMG’s stock price dropped to $432 a share, a drop of 44% or in market capitalization terms, a loss of over $10 billion!
Chipotle is revamping their food safety training for their managers and employees and working hard to regain their brand’s reputation. Hopefully they will recover. All restaurants should learn from this scenario that your brand’s reputation is priceless.
So what does food safety training cost? The answer is it depends. A preventative approach with good training standards and an effective food safety program could cost several thousand dollars. A reactive, streamlined approach to food safety training and ineffective food safety program could cost billions!
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