Filed Under:Risk Management, Loss Control

Chipotle starting program to help farmers ensure safety of food

Chipotle has apologized for making customers ill and updated its protocols. (AP Photo/Gene Puskar)
Chipotle has apologized for making customers ill and updated its protocols. (AP Photo/Gene Puskar)

(Bloomberg) -- Chipotle Mexican Grill Inc., seeking to recover from an E. coli crisis that dragged down sales and profit, will start a program aimed at helping suppliers maintain food-safety standards.

Chipotle is spending as much as $10 million to fund the effort, co-Chief Executive Officer Steve Ells said during a meeting with employees on Monday. The money will be used to help local farmers offset the costs of new tests and food-safety protocols, he said.

“The money will be used to provide safety support and education that’s necessary to meet our standards,” he said in a clip that was broadcast via the Periscope app.

Chipotle has been struggling to regain its footing following an E. coli outbreak that sickened dozens and brought attention to previous cases of customers getting sick. The crisis has battered Chipotle stock price and crushed its sales, which dropped 36% in January.

Chipotle has apologized for making customers ill and updated its protocols, saying the changes will make the restaurant chain an industry leader in food safety. The company has insisted that it can regain its sales and margins, with a marketing pitch aimed at luring customers back to its restaurants slated to kick off this month.

The U.S. Centers for Disease Control and Prevention recently announced its investigation into the E. coli outbreak had concluded, briefly giving investors hope that the worst was behind Chipotle. But the chain also faces a criminal probe that stems from a norovirus outbreak in August at one of its restaurants in California.

Chipotle temporarily closed all its stores on Monday to hold the meeting with employees. They are scheduled to reopen at 3 p.m. local time.

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