Chipotle knows that its new food safety plan will probably make its food taste worse.
After an E. coli outbreak that sickened 52 people in nine state was linked to Chipotle restaurants, the company has been under pressure to firm up its food safety procedures and reassure both customers and investors.
Earlier this month, Chipotle warned that its same-store sales would fall up to 11% in the fourth quarter with sales dropping almost 20% in the days following news the company closed restaurants in Washington and Oregon.
Year-to-date the stock is down about 16%.
On Wednesday, Chipotle co-CEOs Steve Ells and Monty Moran appeared on “Mad Money” with CNBC’s Jim Cramer and talked about the food safety measures they’d discussed with The Wall Street Journal and which our Hayley Peterson also addressed in a post on Wednesday.
And as Peterson wrote, Chipotle is basically about to become McDonald’s.
Chipotle will now prepare some its food, including diced tomatoes, at a central facility in Chicago and ship them to restaurants around the country. Last year Chipotle brought tomato-dicing in-house to improve taste after having previously prepared this food at a central facility.
Cramer asked Ells and Moran about how this potential change in preparation would change taste, and Ells answered with a long response that sort of worked around the question but conceded the food will probably taste different. Or said another way, worse.
Here’s the full exchange, via CNBC:
JIM CRAMER: Absolutely. Steve, you in your ad you say as a chef it starts with the chef. Now one of the reasons you know that you guys have schooled me, I mean, look, this is an important interview but I — you schooled me about farm to table. You schooled me about natural and organic. You schooled my kids. My daughter went there just this week said, “Yeah, well, dad, what’s the problem?” But I come back and I see what you’re trying to do that you got to ship vegetables to Chicago for cleaning, come back. Is it going to taste as good as it used to?
STEVE ELLS: Well, Jim, we’re committed to food with integrity as much as we ever have been. You know, we’re going to layer on this culture of food safety and make sure that we’re the safest place to eat. That’s priority number one. You know, I talked about tomatoes as an example at an investor conference.
And today we would not have the ability to have this kind of intense testing, this high-resolution testing, if we were to chop tomatoes in the commissary. So instead we’re doing it in the central kitchen where we take many, many, many samples to ensure that it is as safe as possible. Now if I’m eating the burrito that had tomatoes that were chopped in the central kitchen in the salsa or one that was chopped in house I probably couldn’t tell the difference.
You know, eventually I think we want to try to come up with testing methods and have experts come up with testing methods so maybe we could bring tomatoes back in. I mean, it’s our desire to cook as much in house as possible.
But we’re not going to take the risk. We’re still doing many, many, many things in house. It’s just that the testing of tomatoes, for instance, would be not possible. We couldn’t do this high-resolution testing in the restaurants right now. And we wanted to assure that we are the safest place to eat. And it brings the risk of contamination in this tomato, for example, to near zero when we do it in the central commissary.
Moran added that, “[The food is] still going to be delicious,” but the shift in the company’s priorities seems clear.
Whereas a year ago Chipotle was positioning itself as a GMO-free, local-friendly, better-tasting burrito chain it is now becoming just like any other fast food giant.
Watch the full interview below: