Going Pork-shaped at Chipotle

Chipotle Mexican Grill, the darling of casual dining in the US, is feeling the pinch now that one third of its stores are without a popular seller.


Going Pork-shaped at Chipotle

Chipotle Mexican Grill has long been the darling of the casual diner market – offering great food at good prices and served with a healthy dollop of integrity and ethics. But the US also loves a good fall from grace.

The brand has prided itself on being anti-industrial, using ethically farmed pork and chicken, and recently went GMO-free (genetically modified organism). Consumers rejoiced, stores exploded to 1 700 units in the US, and shares boomed to $727 each.

And now for the snag…

Chipotle dodged a potentially catastrophic PR incident when its own internal audit uncovered one of its pork suppliers dodging some of its strict porcine welfare regulations.

Related: So You Want a McDonald’s Do You?

Suspending all pork purchases from the supplier has meant that one third of the chain is now without its popular topping and carnitas side dish that makes up 6% to 7% of all entrée sales – ouch.

No pork, no profits

Because the brand is not prepared to compromise on animal welfare, it’s looking into using other cuts of pork, and also increasing orders with its other suppliers to meet the needs of the nearly 600 stores left porkless.

Besides being inconvenient, this is starting to have an impact on the listed company’s stock price: Analysts are anticipating a share price drop of 15% to 20% which will throw the company into unchartered territory.

 

 

Tracy Lee Nicol
About the Author
Tracy-Lee Nicol is the managing editor of Franchise Zone Magazine and deputy editor of Entrepreneur Magazine. She studied her Masters degree in Art History and Visual Culture at Rhodes University and spent the next two years working and travelling in Asia. Her love of people, business and teaching is reflected in telling the stories of entrepreneurs, franchisees and franchisors, inspiring others to take the leap to being their own boss and bringing about positive change in South Africa.

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