Chipotle’s recovery–a case study either way

Chipotle is in the midst of a do or die crisis–well, maybe not die but suffer a long, painful recovery. I’m very curious how this will play out. How will they attempt to recover their reputation and more than that, their loyal fan base.

That is one thing I see as a real problem for them and for any company that attempts what I called earlier a holier-than-thou branding. This kind of intense brand-based loyalty, like Apple or maybe GoPro or even Starbucks, is based in part on a perceived alignment of personal values. Apple’s values are still linked in many ways to the 184 ad that set the tone for the company even though it is likely that few current Apple buyers have ever even seen the ad.

Chipotle was working hard to tie in to the healthy food values of the majority of Millenials and had earned high marks and strong loyalty based on those values–even though many of their “integrity” claims such as not using GMOs were questionable. While many believe (without much factual basis in my humble opinion) that the buy local and other integrity strategies results in healthier food, Chipotle is causing some deep questioning of that. Truth is, our traditional food production system is subject to the highest levels of scrutiny and inspection. Farmer’s market food isn’t. That’s an uncomfortable truth to many promoting healthy foods.

Bloomberg’s unfortunate and patently unfair cover art (with surprised fellow in a serious hazardous material suit) highlights the essential problem here and that problem goes far beyond Chipotle. Every company looking to tie into the deep social values of its target audience has to look carefully at this. BP’s Beyond Petroleum enabled the oil company haters to take full advantage of the truth of BP: it is an oil company above all. The alternative energy projects it was pursuing were dancing around the edges and certainly never were core to what the company was doing.

Bloomberg talks of the “smug” marketing of Chipotle:

For a long time, smug worked pretty well for Chipotle Mexican Grill. It’s grown into a chain of more than 1,900 locations, thanks in part to marketing—including short animated films about the evils of industrial agriculture—that reminds customers that its fresh ingredients and naturally raised meat are better than rivals’ and better for the world. The implication: If you eat Chipotle, you’re doing the right thing, and maybe you’re better, too. It helped the company, charging about $7 for a burrito, reach a market valuation of nearly $24 billion. Its executives seemed to have done the impossible and made a national fast-food chain feel healthy.

That smugness bugged me for a long time, but then, I’m a strong defender of family farming and that includes the kind of products and processes that Chipotle’s marketing was intended to defame. But the point is a warning to any company looking to tie into emotionally laden social values. As Chipotle showed, the rewards can be great. As Chipotle also showed, the risk reward ratio works here as well. The risk is also great.