Chipotle Eats Itself
October 17, 2016 2:33 AM   Subscribe

 
Holy shit....That CEO pay chart is bogggling.
posted by Thorzdad at 3:20 AM on October 17, 2016 [15 favorites]


I'm still digging through the article, but I just want to quickly drop a link to a comment I made last year while news of the food safety incidents were on the front page of the news.

Basically, Chipotle is hated by its peers in industry, to an extent that seems surprising even for a notoriously cutthroat industry.

And those enemies have hired PR people and lobbyists. They also have a "fascinatingly-horrible" PAC that seems to direct most of its anger toward Chipotle and its affiliates, under the guise of an alt-right news outlet (no, really).

Coincidentally, the media started getting tips about food-poisoning incidents a few months after these groups ramped-up their lobbying efforts.

While many of us reacted to the news, frustrated that Chipotle wasn't adequately training its employees, it was also very interesting to notice how the story seemed to have arrived at the press pre-spun as "This is what happens when you don't buy lettuce from a Monsanto depot."

Disclaimer: I eat at Chipotle somewhat regularly. The chorizo is yummy.
posted by schmod at 5:23 AM on October 17, 2016 [44 favorites]


Is the insistence on avoiding centralized cooking simply to preserve the appearance of hand crafted food? At Chipotles' scale I would guess that given the right inputs and with an emphasis on quality designed in large scale automated cooking would produce tastier food than a $9 hour employee who's been cooking for six or seven months. I guess the problem is that if you pay more attention to quality and taste than comparable fast food chains you have to have some way to signal that to your costumers so that they will agree to pay a premium for slightly better than average fast food.
posted by rdr at 5:46 AM on October 17, 2016


That's one evil website. An embedded autoplay video, with audio, not at the top where you can find it quickly and squelch it, but halfway down the flipping page. WTF FastCompany?

More to the point, I think we're beginning to reap what the Republicans have sewn when it comes to deregulation. The FDA was never what you'd call really well funded and staffed, and lately it's become much more of a rubberstamp than any real customer protection agency.

And, worse, people seem irrationally devoted to brands even when it's been proven that the brand in question set out deliberately to hurt them.

Look at Blue Bell. Not only was there a listeria problem, it was revealed that management **KNEW** there was a problem and shipped known contaminated ice cream anyway. Yet people, including my partner, were eagerly waiting for Blue Bell to end their shutdown and resume shipping ice cream.

Now there's **ANOTHER** listeria outbreak and they haven't even shut down this time, it's old news, nothing to be worried about, they recalled a few shipments and otherwise they're just rolling along like everything is normal.

If anything surprises me, its that Chipotle is suffering a all from the ecoli outbreak. Given the way Blue Bell can knowingly and intentionally send out tainted products that caused a minimum of three deaths, yet their brand hasn't suffered and their fans remain dedicated, I'm stunned that a few people who didn't even die have hurt Chipotle at all.

Maybe ice cream has a different dynamic from other food?

schmod I kind of hate Chipolte since they turned out to be one of the worst offenders in wage theft. And after seeing the graph in the linked article illustrating the staggering CEO pay on top of that wage theft makes me seethe with rage and feel a desire to watch the company crash and burn just so I can piss on its ashes.
posted by sotonohito at 6:06 AM on October 17, 2016 [11 favorites]


Is the insistence on avoiding centralized cooking simply to preserve the appearance of hand crafted food? At Chipotles' scale I would guess that given the right inputs and with an emphasis on quality designed in large scale automated cooking would produce tastier food than a $9 hour employee who's been cooking for six or seven months.

Not for fresh stuff, I don't think. There's an extent to which meat can be pre-cooked and finished off on site and come out tasting okay, but any veg that's sliced and refigerated for several days is going to have an inferior texture to one that's prepped hours before it's served. You lose moisture.
posted by Diablevert at 6:38 AM on October 17, 2016 [3 favorites]


Is the insistence on avoiding centralized cooking simply to preserve the appearance of hand crafted food?

I work in the foodservice engineering business and I've heard the stories about how Chipotle resisted automation in certain portions of the kitchen. McDonald's would suggest various places where the process could be improved and it was flat-out rejected.

However if you look carefully you can get a peek at the sous-vide retherm bath in the back (looks like a deep fryer with lid on it). That's automation, and it's hidden away from the public. I don't know if the article mentions it but the carnitas and barbacoa was all done offsite long before the E. Coli outbreak. It's prepped in this water bath.

That's not to say that CMG didn't learn anything from MCD during their time together. One of the "central kitchens" mentioned in the article is OSI (aka Otto & Sons Inc.) They're a massive protein supplier to McDonald's, especially in the chicken nugget and pork nugget (oops, sorry, "rib patty") area.

They're also the provider that nearly took down McDonald's in China.

It's a tough call. If you want grilled food you really can't do it offsite. It's hard to automate (although it's getting there).
posted by JoeZydeco at 6:39 AM on October 17, 2016 [6 favorites]


An interesting read. What I find boggling isn't the CEO pay. Rather, it's the complexity of such an endeavor as running a business like Chipotle.

For years, enlightened restaurant-goers, shocked and horrified by Fast Food Nation, pink slime, and the evils of Big Food, have felt an almost religious pull to Chipotle’s "Food With Integrity" mission—its commitment to fresh ingredients, ethical sourcing, and disrupting the fast-food model—as if eating at a Chipotle could nourish your soul as well as your body.

I kind of hate this notion of food attaining a near spiritual level of consumption, as if eating anything could nourish your soul. Whatever that even means. But this seems to be a selling point for lots of folks.

The whole outbreak thing is pretty puzzling, though. Lots of resources thrown at the problem, and they still are enigmatic. It looks like they could get hit again and they'd still be shooting in the dark trying to figure out how to prevent it.

I question Pollan's idea that a thousand individual burrito shops beats one big corporation. If anything, it seems that means even greater chance of foodborne illness with less transparency and accountability. But an individual burrito shop is more quaint than a chain. So I guess that counts for something?
posted by 2N2222 at 6:52 AM on October 17, 2016 [2 favorites]


sotonohito: "schmod I kind of hate Chipolte since they turned out to be one of the worst offenders in wage theft."

Yes. That graph made my blood boil too. Although, again, I wonder if those numbers are distorted – CEO compensation often goes well beyond a paycheck, and it wouldn't surprise me that Goldman pays its CEO in a more *ahem* tax-efficient manner.

But, really. Pay your workers more. It helps. Even Wal-Mart have seen the light.

However, the "controversy" still makes me mad, because it targeted the one thing that Chipotle unquestionably did really well – sourcing its products. All accounts from employees that I've heard support the notion that Chipotle actually "walks the walk" in terms of purchasing locally-sourced and high-quality products. The fact that they managed to make this scale to a national level without sacrificing profits or quality is really impressive.

It also makes the other large chains look really, really bad. If Chipotle can do it, why do the others need to buy ingredients from factory farms, and schlep frozen food halfway across the country to produce sad-looking hamburgers that have a smaller profit-margin?

2N2222: "The whole outbreak thing is pretty puzzling, though. Lots of resources thrown at the problem, and they still are enigmatic. It looks like they could get hit again and they'd still be shooting in the dark trying to figure out how to prevent it"

Not to sound too conspiratorial, but isn't it possible that food poisoning incidents at large chain restaurants are underreported?
posted by schmod at 6:59 AM on October 17, 2016 [7 favorites]


a small shop could be epidemiology-ized easier than an enormous non-linear supply chain and prep system. my guess, anyway.
posted by j_curiouser at 7:00 AM on October 17, 2016


I would think that in the minds of the executives their insane pay is justified by all of the (not too well paying) jobs they "create".

That stat about once hiring 4000 in a single day is pretty staggering. though paired with the 130% turnover figure it makes me wonder if thy aren't rehiring some of the same folks?

if only there was as much outcry and concern over the turnover and work conditions as their is about food safety - id imagine a couple bucks an hour and reliable scheduling would enable them to retain folks for longer than 250 days, on average, but maybe not.

SF native who has always maintained that chipotle burritos are an abomination, but im glad to live in NYC and have Dos Toros as a nearly identical (but better) option when it would be a decent option. (I usually get bowls since my biggest gripe is that no one ever who has ever worked at a chipotle has actually competently rolled a burrito correctly).
posted by Exceptional_Hubris at 7:00 AM on October 17, 2016 [5 favorites]


on non preview - what schmod said.
posted by Exceptional_Hubris at 7:01 AM on October 17, 2016


If Chipotle can do it, why do the others need to buy ingredients from factory farms, and schlep frozen food halfway across the country to produce sad-looking hamburgers that have a smaller profit-margin?

You're kind of addressing two things at once here.

Frozen items allow the restaurant chain to smooth out their supply channel. You can buy meat during cheaper periods and stock up. The McRib is an instrument of arbitrage. Go back to the article and read about the pig farmer that got stuck with all that excess inventory when CMG had their sales downturn. That's the situation you're trying to avoid, killing your suppliers when things dip. You don't realize how much aircraft-carrier-size momentum is involved when you're a MCD-class company. JIT would never, ever, work for them.

Frozen food also minimizes the handling and safety issues with meat, but that's kind of secondary here. Or maybe not.

The "sad hamburger with small margin" is just what McDonald's does. There's a lot of people that can't afford $10 for lunch, and MCD has always hit that market. As my free-market economist relative pondered to me, the rise of Chipotle was partially because people wanted to forget the shitty period in their lives during the early 2000s where all they could afford for lunch was a $1 McDouble.

It wasn't just a refutation of the quality of the food (although the marketing was killer and it certainly helped), it was a refutation of their economic circumstances. Witness the upscale burger (Five Guys, Smashburger, Shake Shack) and sandwich (Panera, Jersey Mike's, Potbelly) chains. They all boomed once the economy rebounded.

Next downturn, they'll all be back in the drive-thru line just like before.
posted by JoeZydeco at 7:27 AM on October 17, 2016 [11 favorites]


All accounts from employees that I've heard support the notion that Chipotle actually "walks the walk" in terms of purchasing locally-sourced and high-quality products.

The article linked in the post goes to some lengths to complicate this picture.
posted by Diablevert at 7:41 AM on October 17, 2016 [1 favorite]


Although, again, I wonder if those numbers are distorted - CEO compensation often goes well beyond a paycheck, and it wouldn't surprise me that Goldman pays its CEO in a more *ahem* tax-efficient manner.

That comp figure reflected one-time stock option awards. Given the trajectory of the stock since then, $46 million of that $57 million is currently worth zero.

You'd be surprised by how not tax-efficient executive compensation is. It's virtually all W-2 income when paid out, and it's virtually impossible to make it otherwise.
posted by jpe at 8:08 AM on October 17, 2016 [1 favorite]


I question Pollan's idea that a thousand individual burrito shops beats one big corporation.

Since I work on an urban college campus, I eat at a lot of independent holes-in-the-wall. Number of restaurants I've regularly eaten at that have gotten severely dinged by the local Board of Health since the Chipotle thing: 4. And I will be the first to tell you, those places are filthy. You pays your money and you takes your chances but they are in no way superior in food safety to Chipotle. (Also? I'm pretty sure most of them are also engaging in egregious labor violations. In my experience, ain't no labor law violator like a small mom and pop shop cuz a small mom and pop shop doesn't have anyone looking that closely at it.)
posted by soren_lorensen at 8:22 AM on October 17, 2016 [32 favorites]


The more I read about the restaurant industry, the more I feel comfortable eating at home. The origin of the ingredients, the cleanliness of the kitchens--of course who knows what the labor and hygiene standards are at the farms and grocery stores?

The extreme quality of the hate for Chipotle (and the way that it was directed at ethical sourcing) when they were having their problems always seemed out of the ordinary to me. It's interesting that it may have been due to PR firms.
posted by Bee'sWing at 8:43 AM on October 17, 2016 [2 favorites]


I thought the publicity for the norovirus outbreak was the best thing that could've happened to the affected workers: under no other circumstances would fast-food workers have gotten paid sick leave en masse. It's frustrating that we don't have universal paid sick leave, especially for food service workers. I hope it doesn't take more mass illness situations for the paid-sick-leave contagion to spread to other employers.
posted by asperity at 12:02 PM on October 17, 2016


Over the last couple of years I've chatted with a few people working in food safety research and the food they are all most personally concerned about is not meat but raw produce, and especially raw leafy greens like lettuce and spinach. It's not a matter of inadequate washing, either, because the bacteria sometimes gets taken up into the plant tissue itself. And the stuff about sourcing... I don't know. This Bloomberg article suggests the problem that caused the E. coli outbreak was actually likely to be one of their big suppliers, and the noro outbreaks obviously had nothing to do with sourcing.

The author writes: "I ask whether Chipotle could simply move all its food preparation to central kitchens like this one. After all, if the food can taste just as good, why wouldn’t they, especially if it’s safer?" That leads you to believe that depending on local labor to chop veggies and prep food is the issue. But the central kitchen they describe seems to be just preparing the meat products -- anything that's cooked is going to be much more robust to contamination than raw produce, and if the coliform bacteria are inside the stems of your lettuce, it seems like there's no amount of washing or careful food prep that would even help. Likewise, the reality is that the norovirus outbreaks could have happened literally anywhere that has food service employees (we had a similar outbreak at a university cafeteria), though I'm sure paid sick leave would have way helped and is an ethical thing to provide in general. So did the outbreaks really have a lot to do with the non-centralized aspect of their business model? I'm not convinced by this.
posted by en forme de poire at 12:15 PM on October 17, 2016 [7 favorites]


Maybe ice cream has a different dynamic from other food?

Speculation, but I also wonder if they're being negatively affected by some retrograde stereotyping about Mexican-American food being inherently riskier... if you look at the graph in the article, both Chipotle and Qdoba started as less "trusted" in food-safety than whitebread (ha) Panera.
posted by en forme de poire at 12:19 PM on October 17, 2016


.. and if the coliform bacteria are inside the stems of your lettuce, it seems like there's no amount of washing or careful food prep that would even help.

There is a path to fixing this through gamma irradiation of fresh produce, but it seems pretty obvious that it is insanely orthogonal to Chipotle's entire existence.
posted by JoeZydeco at 12:35 PM on October 17, 2016 [3 favorites]


Gamma will render microorganisms non-viable, but it doesn't remove the endotoxins and exotoxins (and mycotoxins in the case of certain fungi) that can still cause illness if present in sufficiently high quantities.
posted by porpoise at 12:56 PM on October 17, 2016 [4 favorites]


sotonohito: Given the way Blue Bell can knowingly and intentionally send out tainted products that caused a minimum of three deaths, yet their brand hasn't suffered and their fans remain dedicated, I'm stunned that a few people who didn't even die have hurt Chipotle at all.

I think that outbreak hurt Blue Bell more than you realize. The brand is effectively dead here in Colorado. I haven't seen a single container on the shelves of my grocery store since everything got recalled, and I don't know if I'll ever see it again.
posted by fremen at 3:47 PM on October 17, 2016 [1 favorite]


I've been with schmod on this one since the first stories, or at least my suspicious instincts have.

Whether or not the specific Chipotle poisonings were sabotage or not, it's frightening how easy this would be to do, should a corporate actor wish to substantially harm a competitor or non-compliant customer.

It's a heck of a novel, at least.
posted by rokusan at 4:12 PM on October 17, 2016 [4 favorites]


What I want is just one place that will roll a burrito that isn't jam packed with stuff. I like my burritos long and thin and narrow enough that I can fit them in my mouth without everything spilling and bursting all over the place. For some reason in New York people have the idea that burritos should be nearly as fat as they are long. Chipotle, taco truck, restaurant, it doesn't matter, people here only make gigantic fat burritos that are impossible to eat without spilling half the contents all over the place and smearing refried beans and rice all over your face every time you take a bite. If anyone knows a place in Manhattan where I can buy a normal, thin burrito I'm all ears.
posted by pravit at 6:51 PM on October 17, 2016 [1 favorite]


Chipotle eats itself

And spends all night in the bathroom miserable.
posted by spitbull at 6:51 PM on October 17, 2016


brand hasn't suffered

Blue Bell is in a death spiral. Their brand is dead in the water in several major markets at least. Their institutional business is fine. What makes you think it hasn't suffered?

It was never actually that good, but Texans are used to eating shitty food (literally) and calling it "traditional."
posted by spitbull at 6:57 PM on October 17, 2016 [1 favorite]


Blue Bell is in a death spiral. Their brand is dead in the water in several major markets at least. Their institutional business is fine. What makes you think it hasn't suffered?

Blue Bell is exceptionally good for mass-market ice cream in the non-premium sector. I think the heights of their reputation (pre-listeria) are almost entirely nostalgia, though, plus a good helping of what I like to lovingly call "Texas nationalism".
posted by redct at 9:13 PM on October 17, 2016 [1 favorite]


especially for food service workers.

It's such an obvious example of valuing business interests over labor rights, customer safety, and common sense that it's ridiculous. I've worked in food service when I was sick and should have been at home, both for my well-being and the well-being of others.

Losing pay is bad enough. Being fired is worse. If management holds you responsible for finding your own shift replacements, and no one is going to take your 6AM shift on short notice, what do you do?

Bonus: I was working in a hospital. One with a major cancer wing.
posted by Kutsuwamushi at 3:17 AM on October 18, 2016 [2 favorites]


To be more specific, in an at-will state it's not illegal to fire someone for calling in sick. It's only illegal to fire them for taking protected medical leave or under the ADA.

State laws vary, but many (most?) have no more protection than what the FMLA provides. And most food service workers are not eligible for FMLA leave:
Employees are eligible to take FMLA leave if they have worked for their employer for at least 12 months, and have worked for at least 1,250 hours over the previous 12 months, and work at a location where at least 50 employees are employed by the employer within 75 miles.
I wasn't eligible because I worked for a small business. Most employees at Chipotle aren't eligible because of the high turnover.

American employment law is frequently insane.

It's worth pointing out that 2/3 of those with FMLA protection are white.
posted by Kutsuwamushi at 3:46 AM on October 18, 2016 [5 favorites]


"However, the "controversy" still makes me mad, because it targeted the one thing that Chipotle unquestionably did really well – sourcing its products. All accounts from employees that I've heard support the notion that Chipotle actually "walks the walk" in terms of purchasing locally-sourced and high-quality products. The fact that they managed to make this scale to a national level without sacrificing profits or quality is really impressive. "
This is a painstakingly manufactured impression. Their inadequately documented or verified sourcing are, along with many other things, a lot of what put them in this mess.

You don't need to engage in the kind of loose associations and conspiracy mongering at the top of the thread, which we usually call pathological when the right-wing does it, in order to understand why food safety experts tend to really fucking hate Chipotle. The executives at Chipotle engineered the context in which these outbreaks happened when they cut corners on the kinds of essential things that get people hurt, its really that simple. The reason why farmers tend to really fucking hate Chipotle are more complex, but Chipotle has been unambiguously negligent in their actions and only made it worse in their weaselly response to the outbreaks.
"While many of us reacted to the news, frustrated that Chipotle wasn't adequately training its employees, it was also very interesting to notice how the story seemed to have arrived at the press pre-spun as "This is what happens when you don't buy lettuce from a Monsanto depot.""
Monsanto does not give a shit about Chipotle, they are a research company involved in developing seeds and are in no sense in any real ideological or commercial competition with Chipotle, regardless of what Chipotle's marketing would like you to believe. They are also not in any sense in the business of selling or storing lettuce. If you're looking to cast a corporate villain in your apologetics for Chipotle's corporate malfeasance here, you'd get more mileage suggesting that all our ills are really caused by a company like Sodexo or Yum! or who are at least involved in food distribution.
Holy shit....That CEO pay chart is bogggling."
It makes sense in the context of Chipotle's corporate history and its long history of founder's disease. Ells built the company himself and never relinquished any meaningful control even while he autocratically made an awful lot of really bad decisions from refusing to allow a breakfast menu or drive-through windows, to centrally engineering the wage theft we're seeing come to light as the class action suits write themselves, to centrally engineering the high turnover by creating an environment hostile to workers when the business requires trained employees to function, to mismanaging supply to the point where they have no idea where their ingredients come from the the time they make it to a store, to mismanaging the crisis that all of that created. The absurd compensation come with the autocratic control. Investors have had no leverage with tempering either the control or the compensation because up until now Chipotle has been able to essentially just print money selling the idea of healthy food wrapped up in a 1500 calorie burrito. Ells has been able to hide a hell of a lot of fundamental incompetence in the success brought by that big lie and others, and up until now its worked. Apparently it will continue to work, at least for him, at least for a while longer.
posted by Blasdelb at 9:04 AM on October 18, 2016 [7 favorites]


Since I work on an urban college campus, I eat at a lot of independent holes-in-the-wall. Number of restaurants I've regularly eaten at that have gotten severely dinged by the local Board of Health since the Chipotle thing: 4. And I will be the first to tell you, those places are filthy. You pays your money and you takes your chances but they are in no way superior in food safety to Chipotle. (Also? I'm pretty sure most of them are also engaging in egregious labor violations. In my experience, ain't no labor law violator like a small mom and pop shop cuz a small mom and pop shop doesn't have anyone looking that closely at it.)

There was a meme going around my fb feed over the past few days about "local businesses" often being super awful about labor/health/etc regulations and laws and no one really talking about it... and yea, it's completely true.

Every small company i've worked for had tons of insidious bullshit and corner cutting going on. This is exactly why i'm so pissed that the proposed new laws here to limit awful/inconsistent/short notice scheduling exempt small businesses that are actually the worst at that shit.

Big companies are afraid of getting sued. Small companies are either oblivious, or know that a dishwasher isn't going to hire a lawyer and fuck them accordingly.

Everything i read about chipotle makes it sound like a small businesses that somehow managed to get big while being run your typical mom and pop tyrannical dictatorship corner food shop. Every place i've worked for that became locally successful did so by basically failing upwards in spite of itself, wherein "well we're still making money so you're obviously wrong" was the default response to any well thought out advice or criticism.

I've watched too many places like this treat me and my friends, and ultimately in this case their customers like shit by making enough money that they could just wallpaper over huge operational issues and bumbling mismanagement.

It wouldn't surprise me if yum brands or some similar conglomerate owns chipotle in like ten years. You can only fuck up and succeed in spite of yourself for so long. Some places do it indefinitely by never expanding much, but the places that endlessly expand are either run by smart people who are willing to be proactive, eventually taken over by smart people, or just slowly fall into a heap.

I will admit that it's sort of fascinating to watch that kind of toxic small scale company culture grow to this size though.
posted by emptythought at 1:13 PM on October 20, 2016 [3 favorites]


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