Another virus outbreak slams Chipotle’s reputation

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BOSTON — The company’s “food with integrity” slogan seems absurd at a time when at least 141 Boston College students — including members of the basketball team — are sick after eating at a Chipotle restaurant near the campus.

The culprit this time: norovirus.

The latest crisis comes as Chipotle is still dealing with the fallout of an E. coli outbreak at several restaurants that made 52 people sick in nine states in October and November. There was also a salmonella outbreak this year.

No wonder Chipotle is in damage control mode.

Chipotle takes a social media hit

Chipotle has gone from beloved fast food joint for Millennials to the butt of jokes.

Here’s a sampling of social media posts about Chipotle this week. The hashtag #Chipotlecoli is trending:

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“They can’t go on TV and say ‘food with integrity’ anymore. Their whole advertising model is thrown out the window,” says Howard Penney, managing director of Hedgeye Risk Management, an investment research firm.

The fact that Chipotle has a larger Instagram following than chains like Panera, Wendy’s and Subway could backfire as even the loyal fans share their concerns.

Slow response

No one has died from either outbreak, but the company’s supply chain is looking deeply flawed. As is its PR.

Penney blasted Chipotle’s management team for its slow and seemingly tone-deaf response, calling it the worst he had seen in his entire two decade career.

“It’s gone right at the heart of the brand. If you’re hitting a Millennial male athlete, forget it. You can’t imagine a worse target audience,” says Penny.

This is starting to be compared to the Target data breach in late 2013 or Whole Foods being outed for systematically overcharging for pre-packaged food.

Stock price tanks

Chipotle finally put out a statement Thursday offering its “sincerest apologies” to the people who got sick. CEO Steve Ells went on NBC’s “Today” show to reiterate the company is making changes.

“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.

But the hit to the company’s reputation — and stock — have been clear.

Chipotle stock has cratered to $550 on Wednesday, an almost 30% drop from its all-time high of nearly $759 a share in early August.

Chipotle was struggling even before the food safety issues. Wall Street analysts have been slashing their forecasts. Many says it will fall further.

Deutsche Bank now predicts the stock could fall to $480 — a nearly 40% drop from its high.

“The customer reaction to E. coli headlines (which initially emerged on Nov. 1 and then recurred on Nov. 20) was more severe than expected,” wrote Jason West of Credit Suisse in a research note this week.

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