Few things can damage the reputation of a business in the food industry like an outbreak of foodborne illness tied to the business’s products. Fast food restaurant Chipotle has had to deal with trying to win back customers nationwide after a series of E. Coli outbreaks across several states. Complicating the matter, just as the regular alphabet soup of federal agencies declared the E Coli outbreak over, Chipotle had to close all their restaurants nationwide due to a norovirus outbreak.
E Coli is actually a general class of bacterium, most of which are harmless. The harmless strains exist as part of most humans’ gut flora. However, some strains are pathogenic and cause severe illness with the potential to be fatal. Pathogenic strains are normally transmitted by unwashed produce or poorly butchered meat. The E Coli outbreak at Chipotle actually constituted two completely separate outbreaks, one that affected 55 people in 11 states and another that affected 5 people in 3 states. CDC studies confirmed that the two outbreaks involved different strains of pathogenic E Coli and were not related.
How Was The Chipotle Outbreak Different?
Perhaps most concerning, the CDC could not identify a single specific cause of the Chipotle E Coli outbreaks. Epidemiological studies have caused the agency to believe a single food item or ingredient is responsible, but they cannot pinpoint the specific one. The Food and Drug Administration also investigated several suppliers but failed to identify a source of the outbreak. The Food Safety Inspection Service of the US Department of Agriculture did manage to rule out beef from Australia as a potential cause.
Avoiding Trouble In The Future
In the wake of the outbreaks, Chipotle has committed to new sanitation and recordkeeping in their stores. They have also attempted to address their employee sick leave policy, as several other foodborne illness outbreaks that have hit the company recently have originated from sick employees.
The Cause And Effect Breakdown
Ultimately, though, the outbreaks have cost the company billions of dollars. Chipotle’s stock traded at approximately $720 a share prior to widespread news of the outbreak in October of 2015. This represented a market cap value around $21.7 billion. Almost three months after the outbreaks ended per the various federal agencies involved, the company’s stock now trades around $450 per share, representing a market cap value of $13.7 billion. The various outbreaks, in this sense at least, have cost Chipotle approximately $8 billion.
For Your Business
This should serve as a serious reminder to all companies handling food of the importance of appropriate food safety and handling. This means establishing appropriate standards for washing produce, butchering meat properly, and avoiding cross-contamination of food items where appropriate. It also means ensuring that employees follow those standards strictly and keeping tight records on the movement of supplies and products through the company. As Chipotle shows, an ounce of prevention can sometimes be worth a pound of cure.