The Limits of ‘the Chipotle of ____’

Google the phrase “the Chipotle of,” and you get about 23,000 results. There’s BurgerFi, “the Chipotle of Burgers”; Noodles & Company, “the Chipotle of Noodles”; indikitch, “the Chipotle of Indian food”; Mendocino Farms, “the Chipotle of sandwiches”; and the list goes on. The phrase has become so ubiquitous it has started crossing into segments of society beyond food: There’s the “Chipotle of hotels” and the “Chipotle of journalism.”

The name itself has come to signify more than a pick-your-own-ingredients assembly-line burrito chain. It’s become a shortcut to describe a set of beliefs and desires, a semipolitical orientation to the world. In the words of Josh Stearns, the nonprofit leader who pondered building a newsroom like a Chipotle, the chain is a “place where consumers know what’s being offered, but they get the chance to influence exactly what they want.” Customers, he wrote, “have choices, power, and a sense of ownership over the outcome of the meal.”

Fast-food industry leaders have been lauded for essentially becoming more Chipotle-like in the past year. Both McDonald’s and Subway announced plans to cut antibiotics out of their meat supply chains, with Subway going so far as to promise that drugs used in human medicine will be eliminated from the chicken, turkey, pork, and beef it serves by 2025. McDonald’s, for its part, is focused only on poultry. Elsewhere in the industry, chains have pledged to go cage-free for eggs and to cut artificial ingredients, and have shifted branding and advertising to focus on the freshness—the realness—of the food they cook and serve.

Before late October, when an E. coli outbreak was traced back to Chipotle locations in the Pacific Northwest, forcing the temporary closure of more than 40 restaurants, 2015 was shaping up to be a banner year for the chain. Even if the upstart couldn’t compete on sales, both consumers and the media were putting it on even terms with the likes of McDonald’s—and there was a popular perception that it was winning hearts, minds, and wallets. 

But with a norovirus outbreak hitting stores in Massachusetts in December and the source of the E. coli bacteria remaining a mystery despite the best efforts of both the chain and the Centers for Disease Control and Prevention, the Chipotle story is taking a hard turn toward the worse as the year draws to a close. The food-safety crisis is not only a problem for Chipotle but a cautionary tale for brands mimicking its commitment to pair growth with good. And yet, even as Chipotle copes with the outbreaks, the larger question about food and capitalism tied up in its successes and failures have been put into stark contrast: If a restaurant that has built its brand on both knowing and promoting the nitty-gritty details of how its ingredients are produced can’t avoid the potentially deadly pitfalls of the modern food chain, can anyone?

 Like Google’s “don’t be evil” days and the green identity politics wrapped up in Toyota Prius ownership, Chipotle is both an ideal and a statement. It gives consumers the sense that modern capitalism doesn’t have to entail exploitation—or at least can require less of it. Cheap food and an ever-busier life don’t have to mean sacrificing quality or your morals. Famed food writer Wendell Berry said in 1990 that “eating is an agricultural act,” and Michael Pollan later added in 2006, “It’s a political act as well.”

FULL COVERAGE: How 2015 Changed the Future

Chipotle has capitalized on this reality beyond the plate too. Its branding presents the chain not only as an alternative to hyper-processed fast food but as an answer to the woes of the American agricultural system. In 2013, the corporation created an animated movie about a scarecrow fighting back against the industrial food system and a Web miniseries about evil corporate farmers, both of which were shared thousands of times over and lauded by the media as examples of true corporate responsibility, of a company willing to stand up to the way most companies do business. In 2015, the chain garnered more mixed praise when it said it was getting rid of genetically engineered ingredients in its kitchens.

But Chipotle's own branding masks that, in many ways, the chain depends on the industrial food system it campaigns against just as any other large food business does. Its food is not particularly healthy; its agricultural practices, while better than most large chains, are far from the epitome of sustainability.

It would be simplistic to offer those facts as a condemnation of Chipotle, however. In many ways, the fanboys and fangirls are right: Chipotle is not just a restaurant but a movement, albeit a corporate one. Chipotle has spawned countless imitators and has succeeded in making the big traditional chains scared. McDonald’s, Wendy’s, Burger King—they’re all chasing Chipotle’s vision. When you see Subway all of a sudden boasting about its fresh avocados, you can bet competition from Chipotle was a consideration. When Taco Bell introduces a “cantina” menu, you can make a safe guess that Chipotle was mentioned in a conference room at Yum! Brands headquarters.

With both sales and imitations from industry leaders on the rise in 2015, Chipotle showed it has the potential to radically change how the fast-food business operates. But if Chipotle’s brand is an exaggeration of its values, what does it mean that so many people are identifying with the company and that so many other companies are trying to be the company? Is the future of fast food better, or does it just tell a better story?

On a recent Friday during the lunch rush at a Chipotle in downtown Manhattan, the customers seemed straight out of the pages of a restaurant trend report. They were there to experience not only food they liked but to tell their own version of the Chipotle story.

Courtney Gans, 23, and Katherine Broeksmit, 25, are two New York University law school students who each go to Chipotle about twice a month. Gans discovered it on a college tour and now gets “waves of addictions” to Chipotle. Broeksmit loved it so much when the chain first came to New York City that she became a member of a Chipotle club at her high school in the Bronx.

Why eat here instead of the McDonald’s down the block?

“I only eat McDonald’s when I’m drunk,” Gans said.

“This is actual food,” Broeksmit said. “It seems healthier.”

“Yeah, but there’s still a lot of salt and fat,” Gans pointed out. (A New York Times investigation into the nutritional value of Chipotle meals found that although you could theoretically pick brown rice, veggies, and nothing else and end up with a relatively healthy meal, most people’s Chipotle choices mean they end up eating more than 1,000 calories and nearly a full day’s worth of sodium.) “But,” Broeksmit said, unlike McDonald's, “you can still tell it’s food. Like, you can see the ingredients. It’s food.”

Chipotle has been riding the wave of two big trends: the rise of fast-casual dining (restaurants that don’t serve typical fast food but aren’t full-service restaurants either, like Panera or Shake Shack) and the rise in people caring about their food or at least responding to branding that incorporates the idea of people caring about their food.

“Consumers have kind of changed what they believe is healthy, what’s better for the planet, better for society—that’s part of the equation, but it’s not the full equation,” said Mary Chapman, senior director of product innovation at Technomic, a restaurant research and consulting company. “The other part is just selling a great story.”

The fast-casual sector has been steadily growing, taking away customers from full-service restaurants and traditional fast-food joints like McDonald’s (called quick-service restaurants, or QSRs, in the industry). According to Technomic, eight of the 10 fastest-growing restaurant chains over the last 10 years are fast casual, including not-so-healthy places such as Five Guys, Jimmy John’s, and Smashburger.

Technomic expects the sector to keep growing. It’s gone from $13 billion in sales in 2004 to $39 billion in 2014, and it’s predicted to reach $62 billion by 2019. Over the next five years, the revenue at fast-casual places is expected to grow by 10 percent a year, while at regular fast-food places, it’s expected to grow by only 3.5 percent.

Fast-casual places appeal to a younger generation—consumers like Broeksmit and Gans—that sees itself as more food-conscious. But fast-casual customers also have more money than the average fast-food diner. The greatest predictor of whether someone will prefer fast-casual to traditional fast-food isn’t age (though that’s important) or political outlook but wealth. People making more than $50,000 a year are 12 percent more likely to choose a place like Chipotle or Panera, according to Technomic, than a place like McDonald’s or Burger King than people making less than $50,000.

Chipotle also seems to have been boosted by a relatively rapid shift in consumer preference for food seen as healthier and better for the environment. The market for organic foods grew 1,000 percent in the last 10 years, and people surveyed by Nielsen this year rated the terms “natural” and “GMO-free” as the most important factors when making dietary decisions. However, Americans aren’t quite ready to pony up for more sustainable food just yet. Only 24 percent said they’d be willing to pay more for natural food versus 51 percent in Latin America and 52 percent in the Middle East and Africa. Still, that number is growing, and Chipotle has pounced on the trend.

“What makes Chipotle work is a food culture that is rooted in finding the very best ingredients we can, preparing our food using classic cooking techniques, and serving it in a way that allows customers to pick and choose exactly what and how much goes into their own individual order,” Chris Arnold, communications director at Chipotle, wrote in an email. “This format allows us to meet virtually any set of dietary restrictions or preferences. And all of it stands in sharp contrast to traditional fast food, which is generally made with low quality, highly processed ingredients, typically prepared off-site using very industrial processes, and served in ways that offer little if any opportunity for customers to customize what they are eating.”

While antibiotic-free meat, limited use of artificial ingredients, and a focus on “real” food have all become legitimate trends in the fast-food industry this year, Chipotle has built its business around this philosophy—and it is best positioned to serve these new consumer demands. The chain has made its early-adopter status part of the Chipotle story too, pointing out that ingredient changes made by the likes of McDonald’s and Subway “represent a few nice steps being made on a road that Chipotle paved more than 20 years ago.”

But there’s no way to really know how much of this movement Chipotle started and how much it’s capitalized on it, tailoring branding and food options to meet the desires of consumers. Either way, it’s good business: Chipotle sales were up 20 percent this year over last, and profits climbed by nearly 50 percent.

A few tables away from Broeksmit and Gans sat Jason Ramos, 35, and Francisco Mendez, 42, two maintenance workers who come to Chipotle every so often. It’s a 15-minute walk from the building where they work, so they can’t come every day, and cost is something of a concern too.

“It’s kind of pricey but worth the money,” Ramos said. “It’s fresh. You feel full but a good full. When I eat McDonald’s, I feel bad full, greasy full.”

Both said they still ate traditional fast food more often than Chipotle but only because there are McDonald’s all over the place.

“But when I go, I try to eat the salad or anything with chicken,” Mendez said. “All the other fast food is competing [with Chipotle]. But I don’t really consider Chipotle fast food.”

If there’s nothing a food editor loves more than a good “the Chipotle of ___” story, a “McDonald’s is dying” story is a close second. For years, headlines have predicted the brand’s imminent demise, with one Vox story going so far as to say, “McDonald’s Is Dying in the United States. Thank Chipotle.” Sure, McDonald’s isn’t growing at the same pace it once was. Last quarter, its sales slumped by 0.7 percent. But it’s still worth $92.5 billion, almost five times as much as Chipotle, and other chains that sell similarly processed food—Burger King, Jack in the Box, Wendy’s—are doing fine.

Still, Chipotle is a threat—if it weren’t for burrito bowls, McDonald’s wouldn’t be pushing Premium Southwest Salads and Artisan Chicken Sandwiches. It’s why Wendy’s has emphasized that its burger meat is “fresh, never frozen.” It’s why Carl’s Jr. debuted a grass-fed beef hamburger this year. It’s also why Denny’s opened up several “The Den by Denny’s,” serving pecan cranberry chicken salad and veggie burritos instead of Moons Over My Hammy, mostly near college campuses.

The quick-service industry’s revenues are projected to grow at about half the rate of fast-casual places between now and 2019, according to Technomic. But there’s a big difference between Chipotle and its ilk nibbling away at McDonald’s sales and every restaurant becoming the next Chipotle. Millennials, with their preference for better, fresher, more local foods, may be changing the market, but they’re not revolutionizing it. Rather, it’s more of a diversification; greasy drive-through cheeseburgers aren’t going away—there will just be more salads, grain bowls, and wraps available too.

Adam Eskin is the founder and CEO of Dig Inn, a restaurant chain that serves a wide variety of fresh and local-ish veggies and meats to lunch crowds (it’s also been called a “Chipotle of ___”). For now, Dig Inn is limited to 11 locations in Manhattan, but with millions of dollars raised from investors, the chain has plans to expand to other cities—likely Chicago or Philadelphia first. Along with salad joint Sweetgreen, Blaze Pizza, and countless other minichains, Dig Inn is helping to carve out a new niche in fast-casual. A meal of wild sockeye salmon, a side of roasted carrots with kale–pumpkin seed pesto, and a grain berry salad with golden beets will set you back $12.40 plus tax at Dig Inn—about twice as much as a typical meal at McDonald’s, and that, Eskin said, is not necessarily a problem.

“Over time the fast-food customer has started to trade up to the Chipotle customer,” he said, “and then those customers trade up to this next segment, which we consider ourselves part of.”

In other words, despite what the Chipotle-as-McDonald’s-killer stories might have you believe, the fast-casual sector isn’t necessarily in competition with the fast-food sector. If it is a competition, it’s a very long one involving the slowly changing taste preferences of the American consumer. So McDonald’s might have to worry about places such as Dig Inn and Chipotle, but the threat is that those places will cause a slow bleed, not an imminent death.

Here’s the other problem with the idea of “the Chipotle of ___”: Even if millennials decided they all wanted to eat all-natural, organic, local food every time they dined out, they couldn’t. There’s simply not a system set up to support it.

Even the chain seemingly most concerned with serving such food can’t keep up with the demand. When Chipotle’s suppliers don’t have enough organic beans, it switches to nonorganic. When it can’t get ingredients within 350 miles of its stores (what the chain considers “local”), it goes farther afield. All Chipotle’s meat is “responsibly raised,” but that trademarked term has an amorphous definition—it could mean pigs are still raised indoors, not on fields, and cows are still raised on feedlots, not pastures. The actual contents of your burrito may taste the same from visit to visit, but where the ingredients originated could vary wildly.

That’s not necessarily Chipotle’s fault. The highly flexible supply chain that exists behind billboards promising “from farm to face” burritos or the pathos of Fiona Apple singing over sad, animated factor-farm animals is a necessary evil for a chain with nearly 2,000 locations nationwide. The American agricultural system has been set up to turn cheaply grown staple crops such as corn, wheat, and soy into a multitude of cheap products that aren’t necessarily good for you. Ray Kroc, the founder of McDonald’s, was instrumental in transforming U.S. agriculture into the industrialized, centralized, monoculture-favoring system we have today. Kroc wanted every tomato, potato, and piece of lettuce uniform, which helped decrease labor costs per piece of food. As McDonald’s became one of the biggest consumers of potatoes, tomatoes, beef, chicken, and other agricultural products, it was able to sway the farming system to its whims. As McDonald’s grew, so did monoculture farms and the system of highways and distribution centers built to serve it and its imitators.

Consumers may have different desires these days than they did in the heyday of the drive-through, but desires alone don’t unravel a complex web created over decades.

“The demand is there, but the system isn’t,” said Paul Barron, a food consultant and author of the book The Chipotle Effect. “It’s the tail wagging the dog right now.”

If anything, it’s a gigantic purchaser like McDonald’s that could bring change across the U.S. farming sector. While Chipotle has served “humanely raised” meat since its inception, McDonald’s announced that it will overhaul its poultry supply in the coming years, and thanks to the sheer volume of chicken and eggs it purchases, many believe it could have an industry-wide effect.

Still, less than 6 percent of the American laying hen flock is cage-free today, and when McDonald’s shifts over, that number will only rise by 2 percent. But that change will at least register; there are so few hogs raised in the kind of conditions that Chipotle requires that the USDA doesn’t even track the numbers. After its repeated carnitas shortages in 2015, Chipotle decided to turn to a British pork producer to stabilize its supply chain.

What consumer demand and corporate buying power can’t do, government perhaps can. Consumer demand has provided an opening to change the U.S. agricultural system, and Chipotle and the “Chipotles of ___” have provided a partial response. But the market can’t turn back time. Unless farm policy changes to mirror that demand, we’ll be stuck with a 20th-century food system trying to meet 21st-century demands.

The U.S. still spends billions subsidizing commodity crops such as corn and soy. While the direct-payment system of crop subsidies is being phased out, the USDA will spend a projected $78 billion on crop insurance over the next nine years. While the financial mechanism is different, crop insurance and subsidies have the same effect: Even when crops such as corn lose money, farmers make money, and that policy is heavily influenced by the hundreds of millions of dollars corporations with vested interests in keeping the U.S. food system much as it is today donate to politicians and spend on lobbyists each year.

“Right now, government policy is totally at odds with what consumers want,” said Marion Nestle, a nutrition and food studies professor at New York University and the author of Food Politics: How the Industry Influences Nutrition and Health.

But if Chipotle, with or without the help of the government, is going to try to remake the way we grow food on the largest scale, it's going to have to ensure that its ingredients are not only ethical but safe. The chain has responded to the E. coli and norovirus outbreaks—and the drop in sales and stock price, which has dipped by nearly 30 percent, that has followed—by hiring a food-safety czar to overhaul its protocols. In an appearance on The Today Show, CEO Steve Ells promised that, following the reforms, "this will be the safest place to eat."

There has been no smoking gun in the Chipotle case—not only has the source of the E. coli not been identified, but food-safety experts have said the chain's protocols met industry standards. In that sense, it's a good reminder that even though Chipotle has changed what it means to be a fast-food restaurant, it is still part of the same consolidated industrial agriculture system its customers seem to be rebelling against—using many of the same processors, the same farms, and the same ways of handling food that its predecessors did. And just because Chipotle promises "Food With Integrity" does not make it any less susceptible to food-borne illness.

"I worry that they [consumers] look at food safety from the organic, non-GMO, sustainability, animal welfare standpoint," Bill Marler, a lawyer who has made a career out representing victims of food-borne illnesses, recently said in an interview with The Washington Post. "And a lot of people in that space, in that agricultural movement, tend to believe that because they do those things their food is automatically safer than food that's served at McDonald's or Jack in the Box or Walmart. But that's just not the case.”

But the behavior of both consumers and chains this year suggests that more sustainable, organic ingredients will show up on fast-food menus in the coming years. Like changing the food supply itself, Chipotle's experience shows that it may not be possible to promote ethical farming practices on a national scale without creating a supply chain as complex—and potentially deadly—as the likes of Taco Bell and Jack in the Box, both of which have had their own E. coli outbreaks.

Upending the system will take more than one company, no matter how many feel-good burritos it can sell. Instead, change in the food system “is going to require new policy,” Nestle said. “But Chipotle shows the demand is there, and if the demand is there, the policy will follow.”

Related stories on TakePart:

• If Milk Can Be Made in a Petri Dish, Do We Need Cows?

• Jane Says: There's An Environmental Case to Be Made for Eating Grass-Fed Beef

• Antibiotic-Free Chicken Is Now a Big Deal for Big Poultry

Original article from TakePart