MINNESOTA — Shares of Chipotle Mexican Grill fell nearly 10% after the company temporarily removed jalapeños from its Minnesota restaurants following a potential link between the ingredient and a salmonella outbreak.
Chipotle said it identified jalapeños as a potential common ingredient from a common lot after learning of a potential salmonella outbreak affecting several food-service retailers.
The company said it immediately removed the potentially affected jalapeños from restaurants where they had been distributed and replaced them with peppers from different growers.
“We have a robust ingredient traceability system,” Chipotle spokesperson Laurie Schalow said in a statement to CNBC.
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Investors Remember Chipotle’s Food-Safety Past
The sharp market reaction reflects investor concerns about Chipotle’s history with food-safety incidents.
The company was implicated in at least five separate foodborne illness outbreaks between 2015 and 2018. Since then, Chipotle has significantly strengthened its food-safety practices, including additional employee training, sick days and an enhanced food-safety program.
The company has subsequently positioned itself as an industry leader in food safety.
Food Safety Remains a Consumer Concern
The latest incident comes as foodborne illness remains a major concern for consumers.
According to the report, an ongoing cyclospora outbreak has resulted in more than 6,700 confirmed cases, while Michigan public health authorities recently confirmed two deaths linked to the outbreak.
Chipotle emphasized that none of its ingredients have been linked to the cyclospora outbreak. However, the company said broader consumer concerns surrounding foodborne illness had affected its sales during the second half of July.
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A Supply-Chain Lesson for Businesses
The incident highlights how quickly a potential food-safety issue can move beyond operations and become a brand, consumer-confidence and investor-relations issue.
For companies operating complex supply chains, traceability, rapid response and transparent communication can become critical to protecting customer trust when a potential crisis emerges.
Source: CNBC; Bloomberg.
