Chipotle’s ‘defensive-sounding’ CFO fuels uphill PR battle [Updated]

Jack Hartung decries unfair media, government for the chain’s recent E.Coli outbreak, but PR pros say the health-oriented brand should do more to restore consumer trust.

Some people have nightmares of falling off cliffs or being chased by wolves.

In the food industry, PR pros must wake up in sweats after they dream about running from giant burritos contaminated by dangerous bacteria.

Chipotle Mexican Grill’s food safety nightmare, which began with an E. coli outbreak in nine states, continued this week as at least 120 college students fell ill in Boston from norovirus linked to Chipotle.

The company also drew criticism this week after its “defensive-sounding” chief financial officer faulted the government and the news media, Fortune reports. The message fell flat with some observers, as Bloomberg editorialized, “It’s Time for Chipotle to Eat Crow.”

CFO Jack Hartung told Wall Street analysts the problem is the way the Centers for Disease Control and Prevention (CDC) has announced cases that are not new, but newly reported to the feds by local health agencies.

“Because the media likes to write sensational headlines, we can probably see when somebody sneezes that they’re going to say, ‘Ah, it’s E. Coli from Chipotle’ for a little bit of time,” Hartung said.

‘Bedside manner’

“[Customers] don’t care that you know until they know that you care,” says Larry Kamer of Kamer Consulting Group, who advised Jack in the Box during a 1993 E. coli outbreak and Castleberry’s Food Company during a 2007 national canned food recall involving botulism.

Chipotle’s website is full of information, and the company does customers a real service by listing exactly which restaurants have been affected, Kamer says.

“But their bedside manner is another thing altogether,” he adds.

Though Chipotle should be proud of its leadership in sustainable and healthy food, “they’ve stumbled here,” Kamer says. “Everybody does. … Loyal customers will stay and those with concerns will come back—but only if Chipotle backs off its lecturing and shows a little more human concern.”

Perception is reality when a consumer-facing company encounters a crisis, says CommCore Consulting Group Senior Vice President Nick Peters. Most customers don’t care about Chipotle’s side of the story, he says.

“All they know is that the CDC has said it’s a problem, and people aren’t going,” Peters says. “By taking a tough stand, [Chipotle] may feel they’re in the right, but they’re hurting themselves in terms of perception—because most people don’t care for the details, they just want to know, ‘What are you doing, because people are sick?'”

Any brand whose brand strategy grabs a moral high ground should consider what happens if things go wrong, says Gerald Baron, chief executive of Agincourt Strategies. He cites BP’s “Beyond Petroleum” campaign and Starbucks’ botched attempt to present itself as a leader in social change.

Still, he says, “Chipotle is also an innocent victim of the cascading effect that we teach in crisis management. ‘Bad things tend to come in threes,’ is the old saying.”


‘Swift and decisive actions’

In an email, Chipotle communications director Chris Arnold shrugged off “armchair quarterback” advice from outsiders in PR. He says:

The fact is, since this incident began, we have taken swift and decisive actions to limit the spread of it, offered our sincerest apologies to people who have been affected, worked diligently with health officials to investigate, been extremely transparent and forthcoming with information and developments at every turn, and shared details of an enhanced food safety plan to be sure our food and our restaurants are as safe as possible going forward.

We will continue to be transparent as this moves forward to resolution and as we continue to implement changes to make our restaurants better when this is over. And we will absolutely look at everything we have done and see how we can make our incident response plans better.

In contrast with the CFO, Arnold says scrutiny is to be expected in a high-profile company. Journalists pay attention to virtually everything the company does: releasing a guacamole recipe online, transitioning to non-GMO ingredients, issuing quarterly financial results.

“The reality is, you have to take the bad with the good,” he says, “and we have been accessible to media throughout this incident, just as we are in the normal course of business.”

Earlier in the crisis, some PR pros praised Chipotle’s communications, with Forbes stating, “Chipotle’s E. Coli Crisis: P.R. Experts Say It’s Handling It Right.”

Both the impacted customers and Chipotle will recover, says Karen Kessler, president and cofounder of Evergreen Partners. Internal comms must be a major part of this. Chipotle must reinforce best food handling practices and commit employees to peak performance 24/7. Meanwhile, the company should demonstrate to customers and stockholders its commitment to “fresh, healthy, great-tasting food and outstanding service.”

“Of course,” Kessler says, “the first lesson of such crises is that the company must demonstrate authentic concern for the victims, along with outreach that in some way contributes to their welfare.”

UPDATE: Maybe doing the right thing is good for business. On Thursday, Chipotle shares jumped more than 5 percent after its founder apologized to patrons who fell ill after eating at its restaurants and pledged that strict new food-safety practices would prevent future outbreaks, Reuters reported.

“This was a very unfortunate incident and I’m deeply sorry that this happened,” Chipotle’s founder and co-chief executive officer, Steve Ells, said in an interview on NBC. “But the procedures we’re putting in place today are so above industry norms that we are going to be the safest place to eat.”

Ells said the company could recover financially, adding that the food safety procedures Chipotle is putting in place would put it 10 to 15 years ahead of the industry, according to Yahoo News.

“We’re doing a lot to rectify this and to make sure this doesn’t happen again,” he told NBC.




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