Chipotle — Don’t Shoot the Guac!

Big Red Car here on what is going to be a lovely, sunny 75F day with a splash of fog. Fog? Yes, fog!

So, the Big Red Car likes Chipotle but, apparently, Chipotle doesn’t like the Big Red Car as it is trying to poison it.

This is hyperbole and fancy, of course, since Chipotle does not actually provide food to 1966 Chevy Impala convertibles. Big Red Cars prefer 10W40.

What is up at Chipotle, Big Red Car?

Chipotle has had some food safety issues, y’all. You can read the company’s version of things here.

Chipotle got some ‘splaining to do — read this to get their version of stuff.

 Bottom lining it for y’all, looks like this.

1. October 2015, the company voluntarily closed 43 stores in Seattle and Portland. They claim only 11 restaurants were actually linked to the incident. The culprit was reported to be E. Coli which had affected customers. E. Coli is a bit of nastiness you don’t want to tangle with if you can avoid it.

The company got rid of a lot of food, cleaned the joints, and tested everything. They brought in a couple of food safety consulting firms.

2. Then, additional cases were reported in November-December in California, Minnesota, Ohio, Illinois and Maryland.

[Oh, shit, Big Red Car — that’s a lot of trouble, no? Yes, dear reader, it is. But, they have 1,900 stores, no franchises. All company stores.]

3. Come 21 December, the company is notified that the Centers for Disease Control and Prevention are investigating 5 new cases of E. Coli in Kansas, Oklahoma, and North Dakota. [North Dakota, Big Red Car? People like burritos in North Dakota? Yes, the Oil Patch illuminati like burritos. Even in North Dakota, y’all.]

4. If that wasn’t enough, in Boston more than 140 college students reported being sickened at a single Chipotle. That was attributed to norovirus with E. coli waiting in the wings to suit up. Norovirus is highly contagious and is spread by contaminated food, improper hygiene, and contaminated food prep surfaces.

Norovirus gifts its victims with nausea, vomiting, and diarrhea and can lead to gastroenteritis.

5. Before this all started, there was a similar norovirus attack in southern California at a Chipotle which sickened 80 customers and 13 employees.

Norovirus claims 800 lives annually and is most deadly amongst children and the elderly.

6. There is also a bit of anecdotal information about a salmonella outbreak in Minnesota but the Big Red Car is struggling to find the exact info.

7. The company has been notified that it is being subjected to a criminal investigation to be conducted by the US Attorney’s Office for the Central District of California. This is being done in conjunction with the food snobs over at the Food and Drug Administration’s Office of Criminal Investigations.

Please imagine really scary background music and the announcers at CNN emphasizing the words “criminal investigation.” Very ominous. Can a burrito get a lawyer? Cause the burritos at Chipotle are going to need some.

Read about it here: Chipotle Says It’s the Guacamole — JK

[The Big Red Car suggests that the guacamole cop an immediate plea to get this behind them. If the salsa wants to jump in, go for it.]

This is not good.

Can we please have a side of “perspective” on this, Big Red Car?

Yes, dear reader, you can.

1. There are about 250,000 cases of E. coli annually and 48,000,000 incidents of foodborne illnesses annually. That is a lot of people getting sick, y’all.

2. Chipotle serves 1,000,000 customers daily — company number. So, you can see that the vast majority of Chipotle customers do NOT get sick. Still, something is going on here, right?

3. Norovirus/gastroenteritis afflicts about 21,000,000 annually resulting in more than 50,000 hospital admissions and the aforementioned 800 deaths. [The Big Red Car does not think anyone should be deathly afraid of eating a burrito. It’s just not right!]

3. In December sales at stores open more than a year tanked to the tune of 30%. The 4th quarter saw the company’s sales dip 14.6%.

4. Earnings for Q4-2015 are now projected at $1.70-1.90 v earlier guidance of $2.45-2.85. Per share numbers, y’all.

5. The stock price has taken a hit but the company still sports a $13+ billion market cap. Chipotle was a high flyer and if you got on board in 2009, it’s been a good ride. This last year has been a little tough as you can tell. It sports a 25+ PE ratio which has a lot of room for trimming if the company cannot get its act in order quickly.

 So what are we to learn here, Big Red Car?

First, dear reader, the company protests that it has never experienced such a disaster. Food safety consultants say they have never seen a food chain experience such a pervasive problem.

The company protests that it is working its butt off to get clean and stay clean. One is tempted to ask, “Why wasn’t the company doing this stuff before? Why only after such a series of incidents?” You will have to ask the founder, Steve Ells (Founder, Chairman, Co-CEO). He wrote y’all a letter of apology.

Chipotle Letter of Apology from Steve Ells

 The likely culprit is the food, fresh food, that has brought the contamination into the company’s 1,900 locations (McDonald’s has 35,000 locations in the US and serves 68,000,000 customers daily as a measure of relative size).

The big teaching point here may be for CEOs to have an emergency communication program in place to deal with emergencies like this. Does your company have such a program? A PR firm spooled up and ready to go?

Give it a thought.

In the meantime, the Big Red Car is going to be hanging back until we get a little better info. The Big Red Car will be eating at Taco Deli on Lamar Boulevard. No corporate burritos for the immediate future.

But, hey, what the Hell do I really know anyway? I’m just a Big Red Car. Have a burrito. Guacamole, think about falling on your sword to get the rest of the ingredients a free ride?

 

 

 

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