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The Chipotle Crisis: Crucial lessons from a cautionary tale

Submitted by eivantsova on Tue, 07/26/2016 - 11:30

“Transparency, in the age of internet, is no longer an option; it’s essential,” said Aidan Connolly, chief innovation officer and vice president of corporate accounts, Alltech, during his talk about the Chipotle crisis at ONE: The Alltech Ideas Conference.

Chipotle has been a leading advocate of food chain transparency while also endeavoring to elevate the experience of fast food. The company embodies the “fast casual” definition – a step above fast food but not quite a sit-down restaurant.

“It sets the standard for the future, and specifically, a tremendous commitment to sustainability,” noted Connolly.

Yet, in 2015, Chipotle suffered a crushing food safety crisis when more than 500 customers reported being affected by E. coli, norovirus and Salmonella over a seven-month period from July to December in the United States. Food safety experts estimated that among 500 people that were affected, at least ten of the cases went undiagnosed.

Steve Ells, Chipotle’s founder and co-CEO, publicly apologized to everyone who’d fallen ill. Demonstrating remorse and resolution, he announced a more comprehensive food safety program and changes to the company’s supply chain. However, this should have been done after the first case was reported.

“When you have that crisis you need to demonstrate the usual three rules: (1) You have a clear person in charge, (2) you have a plan of action to address the problem and (3) the plan is working. I think Chipotle has done that but a little late having five issues in a row,” said Connolly.

Despite the apology and renewed commitment to customer safety, the crisis’ effect on the brand was devastating. Chipotle’s crisis has significantly widened the gap between analysts’ high and low stock-price targets in two months, after the E. coli outbreak was reported.

“There’s nothing worse from a trust perspective. This is not the kind of problem that you can market your way out of,” said Mark Crumpacker, then chief marketing and development officer, Chipotle.

Chipotle went from a company that portrayed themselves as sustainable to being perceived as causing life-threatening diseases. Consumers thought the brand was “smug” and didn’t take it seriously enough in the beginning.

“We need to be clear that the fact of something being organic or natural is not an excuse for it to be unsafe,” stated Connolly. 

Chipotle was facing lawsuits, supply challenges, brand attacks, slowing sales and first quarter losses. Shares have fallen more than 40 percent from all-time high of USD $742 in July last year. Restaurant growth has also been a lot slower.

Nonetheless, Chipotle is bouncing back by proving they took the issue seriously through changes in internal trainings, practices and suppliers.

“Chipotle still has a very strong image and brand reputation for taste and uniqueness, but they cannot afford another mistake,” noted Connolly.

Chipotle is far from the first or last food company to be caught in a crisis. Connolly had some advice for all companies.

“We have one hour, the ‘Golden Hour’, to react to a crisis. What you do in the first hour is absolutely essential,” said Connolly.

Connolly recommended a strategy for businesses when faced with a crisis:

  • Acknowledge the situation within the “Golden Hour”
  • Promise to discover the cause, be relentless in this pursuit, share your findings and, most importantly, the actions you are taking to prevent any recurrance
  • Keep updating the public
  • Engage on social media

The bottom line is: A food safety crisis can be more preventable through proper crisis management, via four stages:

1. Prevention:

  • Employ a good food safety program. This is a minimum requirement.
  • Stay current on risk factors
  • Integrate from top to bottom. All members must follow protocol.
  • One conclusion from the Chipotle crisis is, when there are problems in several states within a few months, you have a systemic problem that you need to address in terms of education to your employees.

2. Preparation:

  • Proactively plan: Study other companies’ successes and failures
  • Monitor public discussion: Know where your customers communicate and use social media to stay in control

3. Management:

  • Acknowledge the issue
  • Buy time to get the facts
  • Do not deny involvement or responsibility
  • Do not attempt to estimate the magnitude of the problem
  • Commit to a speedy, but thorough investigation

4. Recovery:

  • Reassess your risk exposure at the end of the crisis
  • Explain implementation of changes
  • Evaluate again one year later to measure progress against your risk mitigation goals

 

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DHA: The New Sports Nutrition Kid on the Block

Submitted by eivantsova on Thu, 10/15/2015 - 14:51

While creatine, branched-chain amino acids and glutamine are well known and frequently utilized amongst fitness buffs and competitive athletes, there’s another nutrient taking its turn in the spotlight – DHA. DHA, short for docosahexaenoic acid, is an essential omega-3 fatty acid that has made a name for itself for its role in both cardiovascular and brain health. More recently, the sports nutrition community has taken notice of DHA’s ability to help speed recovery, increase gains and improve athletic performance.

DHA aids in the muscle recovery process as an anti-inflammatory agent and reduces DOMS (delayed onset muscle soreness), perceived pain and range of motion 48 hours post exercise.1These qualities, along with boosting blood and oxygen flow to muscles, may also decrease incidence of injury.

Increasing the amount of DHA you consume may help decrease muscle breakdown and increase protein synthesis by increasing the body’s muscle-building response to insulin and amino acids.2Fatty acids like DHA not only increase muscle gains, but may also increase the body’s level of calcium absorption, improving bone strength.3

A vital component in nerve endings, neurons and muscle membranes – DHA has been shown to improve reaction time of athletes during competition.4 DHA also decreases heart rate, which can help improve oxygen utilization during competition or tough workouts.5

References:

  1. Tartibian B, et al. (2009). The effects of ingestion of omega-3 fatty acids on perceived pain and external symptoms of delayed onset muscle soreness in untrained men. Clinical Journal of Sports Medicine, 19.(2),115-9.
  2. Smith G, et al. (2011). Omega-3 polyunsaturated fatty acids augment the muscle protein anabolic response to hyperaminoacidemia-hyperinsulinemia in healthy young and middle aged men and women. Clin Sci (Lond),121(6), 267–278.
  3. Maggio M, et al. (2009). The impact of omega-3 fatty acids on osteoporosis. Curr Pharm Des, 15(36),4157-64.
  4. Lewis E, et al. (2015). 21 days of mammalian omega-3 fatty acid supplementation improves aspects of neuromuscular function and performance in male athletes compared to olive oil placebo. Journal of the International Society of Sports Nutrition, 12,28.
  5.  Mori T, et al. (1999). Docosahexaenoic Acid but Not Eicosapentaenoic Acid Lowers Ambulatory Blood Pressure and Heart Rate in Humans. Hypertension, 34, 253-260. 
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Turning dirt into paydirt

Submitted by vrobin on Wed, 05/20/2015 - 10:39

Robert Walker, Alltech Crop Science 

Today more than 800 million people face hunger and malnutrition. As the population grows, food production will have to increase by approximately 60 percent by 2050. How do we feed, fuel and support the growing world population? 

Currently 33 percent of world soils are under severe pressure from human activities that degrade and sometimes eliminate essential soil functions. At Crop Science: Growing the Revolution symposium, Robert Walker, general manager of Alltech Crop Science, addressed the importance of soil.

“It takes 2,000 years for 10 centimetres of topsoil to form, and there are only 100 harvests left in UK soils,” said Walker, noting that a recent trial carried out in the UK found that city soils had 33 percent more carbon and 25 percent more nitrogen than their agriculture counterparts. Yet, he said, the agricultural soils produce more food.

The United Nations General Assembly declared 2015 the International Year of Soils, and Alltech continues to highlight its importance in the food chain. Soil has a lot more to offer than just food production – soil microbes must be explored.

“We have only identified 2 percent of all microbes in the soil. We need to be looking at the other 98 percent,” added Walker, underscoring that it has been 30 years since the last antibiotic was brought to market. Recently scientists found 25 new antibiotics in the soil so the potential is out there.

“Microbes in soil make the plant more resistant to pathogens. By adding microbes to the soil, it can add a lot of money to your yield. It's a business that is going to double in value,” Walker said.

Crop science has huge growth potential. We need to ask ourselves why big companies like Syngenta, Monsanto and Bayer Crop Science are acquiring interests in or entering the bio market. There is so much more to soil than meets the eye.

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<p>As the population grows, food production will have to increase by approximately 60 percent by 2050. How do we feed, fuel and support the growing world population? </p>

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