Sometimes life does imitate art. Last year,
Chipotle Mexican Grill, the fast-growing burrito and taco chain, produced an
internet comedy series called Farmed and Dangerous to satirize industrial
agriculture.
The villain, a sneering character named Buck Marshall, who runs a fictional
outfit called the Industrial Food Image Bureau, was inspired by real-life PR
operative Rick Berman.
Last month, Berman struck back. In a number
of brutal ads and on a website dubbed Chubby Chipotle (“Food with hypocrisy”),
Berman charged that Chipotle engages in deceptive marketing and sells unhealthy
food. Berman runs the Washington-based Center for Consumer Freedom, an
industry-backed group that opposes what it calls “a growing cabal of activists”
including the “self-anointed ‘food police’, health campaigners, trial lawyers,
personal-finance do-gooders, animal-rights misanthropes and meddling
bureaucrats”.
Chipotle is getting heat from critics on
the left as well. Trial lawyers recently filed a class-action lawsuit alleging
that Chipotle’s claim that it does not serve genetically modified organisms, or
GMOs, is “deceptive and misleading”. Meantime, socially responsible investors
(or, in Berman’s argot, “personal-finance do-gooders”) have called upon
Chipotle to publish a sustainability report so shareholders can see if its
marketing claims are backed up with facts.
As if that’s not enough, Chipotle’s ban on
GMOs sparked a media backlash from publications ranging from the Washington
Post to Mother Jones. In an editorial, the Chicago Tribune said: “Chipotle has
embraced the fear-mongering of some food, environmental and health activists
who have turned ‘GMO’ into a dirty word.”
What’s going on here? To begin with, an
upstart has morphed into a big target. Chipotle, which began life as a Denver
taqueria started by a classically-trained chef in 1993, has grown rapidly into
a fast-casual chain with more than 1,850 restaurants, revenues of $4.1bn last
year and a market value of $23bn. (Its rapid growth was partly driven by an
investment from McDonald’s, which once owned 90% of Chipotle, but that’s
another story.)
Some critics are reacting to Chipotle’s aggressive marketing
around its claim to serve “food with integrity”. “With every burrito we roll or
bowl we fill, we’re working to cultivate a better world,” the company says.
Finally, Chipotle has become vulnerable because the company hasn’t demonstrated
that its claims are supported by actions.
The company isn’t as transparent as
competitors including, among others, McDonald’s, which, for all its
shortcomings, has published corporate responsibility reports since 2002. Darden
Restaurants, Dunkin Brands and Starbucks also report on their impacts.
Adam Kanzer, managing director at
conscientious investment company Domini Social Investments, which filed a
shareholder resolution with Chipotle asking it to report on its sustainability
practices, says he finds much to admire about the company: “I’m always happy to
see a company that’s publicly challenging the status quo.”
But he says Chipotle ought to back up its
messaging with data: “What percentage of their supply is organic? What are they
doing about farmworkers in their supply chain? Does the drought in California
pose any risks? What’s their position on the minimum wage?”
In its most recent proxy statement,
Chipotle says it made a deliberate decision not to publish a corporate
responsibility report, instead devoting its resources to practices that improve
sustainability. The company said: “We believe Chipotle is driving more positive
change in the nation’s food supply than any other restaurant company.”
Chris Arnold, public relations director at
Chipotle, says the shareholder proposals from Domini and Trillium Asset
Management “lost by a good margin”, which indicates that most shareholders are
satisfied with the information they get from the company. The resolutions
attracted about 31% of the vote.
About the Rick Berman “Chubby Chipotle”
campaign, Arnold was unconcerned. Berman, he said, speaks for “a cadre of
anonymous big food donors” who take a “remarkably cowardly approach” by hiding
behind a nonprofit called the Center for Consumer Freedom. Berman’s office
didn’t respond to messages seeking comment.
“Exactly what choice or freedom are we
infringing upon?” Arnold asks. “I’d argue we providing a choice that, prior to
Chipotle, didn’t exist.” Chipotle, he says, provides higher quality
ingredients, such as meat and poultry raised without antibiotics, that were
hitherto only available in more expensive eateries. A new report from Friends
of the Earth and other environmental groups gave only two restaurant chains –
Chipotle and Panera Bread – top grades regarding antibiotic use.
As for the charge that Chipotle’s sells
high-calorie burritos and tacos, Arnold didn’t disagree. But, as he noted, the
company website includes a nutrition calculator with all the information that
any consumer could want. What’s more, focusing on calories obscures the fact
that most Chipotle meals include beans, vegetables, fiber and protein from
minimally processed foods, as this analysis notes.
Chipotle is also transparent about its
“G-M-Over It” policy, noting on its website that the chain’s soft drinks
contain high fructose corn syrup, which almost always comes from GMO corn. It
also acknowledges that its meat and dairy products are likely to come from
animals given GMO feed.
Odds are, Chipotle will remain a target for
corporate social responsibility campaigners. Kanzer says social investors
expect to refile a resolution asking for a CSR report. And so long as Chipotle
continues to brand itself as superior to its rivals, those rivals are likely to
push back.
-The Guardian
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