Chipotle Farmed and Dangerous Pushes Marketing Envelope

by Daren Williams, Senior Executive Director, Communications, National Cattlemen’s Beef Association, a contractor to the Beef Checkoff

Summary
With the launch of the Farmed and Dangerous web television series this past month, Chipotle upped the ante in its attempt to market burritos to socially-conscious consumers. At an estimated cost of well over $1 million dollars to produce, Chipotle is betting the campaign will sell a lot of $8 burritos. But some marketing and advertising observers question whether the gamble will pay off. Even Chipotle acknowledges their marketing strategy is risky. And many farmers and ranchers are voicing concerns over the sensational portrayal of “big ag” and “big food” as greedy scoundrels willing to risk food safety, animal well-being and the environment to make a quick buck.

Background
When Steve Ells opened his first Chipotle Mexican Grill near the University of Denver in 1993 he figured he needed to sell at least 100 burritos per day to turn a profit. Within a month he was churning out more than 1,000 burritos a day and two years later he opened a second store. By 1998, the fast-food burrito chain had grown to 16 stores, all in Colorado. That’s when McDonald’s Corporation took notice and invested in the company. By 2001, McDonald’s had become the majority investor in Chipotle (and five years later fully divested from Chipotle as part of an effort to focus on their core business).1

That same year, Chipotle released a mission statement called Food With Integrity, which became the foundation for the controversial marketing campaign that has included billboards (“Get your antibiotics from your doctor, not your beef”), animated music videos (Back to the Start and The Scarecrow), and now a web television mini-series. Made up of four 22-minute “webisodes,” Farmed and Dangerous is a satire of modern agriculture, or “factory farming” practices. The not-so-subtle message viewers are supposed to take away is that Chipotle’s burritos, made with “naturally-raised” beef, pork and poultry, are superior to other fast-food burritos (and therefore worth the hefty price tag).

Discussion
According to Chipotle’s mission statement, Food With Integrity means that “whenever possible” they use “meat from animals raised without the use of antibiotics or added hormones” (as well as sourcing organic and local produce “when practical”). The question is how do they define “possible” (or “practical” and “local”)? A closer look at their actual practices reveals a disparity between what they say and what they do that could ultimately damage their brand.

When faced with supply shortages of naturally-raised beef in 2013, Chipotle began waffling on their definition of naturally-raised, stating publicly that they may purchase beef from animals that were given an antibiotic to treat illness but not from animals that had been given antibiotics to prevent disease or promote weight gain. In fact, in their 2013 annual report they added the word “subtherapeutic” to their definition of “Responsibly Raised” meats.

Why the change? It turns out that only about 80 to 85 percent of the beef sold at Chipotle stores in 2013 met their old standard (no antibiotics, never ever).2 Looking at it another way, 15 to 20 percent of the beef they served their customers was “irresponsibly raised” (based on their definition). That puts them in a tough spot with their customer. Chipotle attempts to explain their conundrum to stockholders later in the annual report. “One of our primary goals is for all of our restaurants to serve meats raised to meet our standards, but we have and will continue to face challenges in doing so. Some of our restaurants served conventionally raised beef and chicken for periods during 2013, and some are continuing to serve conventionally raised beef, due to supply constraints for our Responsibly Raised meats. More of our restaurants may periodically serve conventionally raised meats in the future due to additional supply constraints.”

Imagine paying $8 for a burrito you believed was made with meat raised on small family farms without antibiotics or added hormones only to find out it’s the same meat from the same ranches, feedlots and processing facilities served at other fast food restaurants. Feel deceived? Chipotle is well aware they are walking a fine line with consumer trust. As they state in “Risk Factors” section of their annual report,  “…our marketing has increasingly incorporated elements intended to encourage customers to question sources or production methods commonly used to produce food. These elements of our marketing could alienate food suppliers and other food industry groups and may potentially lead to an increased risk of disputes or litigation if suppliers or other constituencies believe our marketing is unfair or misleading. Increased costs in connection with any such issues, or any deterioration in our relationships with existing suppliers, could adversely impact us or our reputation. Furthermore, if these messages do not resonate with our customers or potential customers, the value of our brands may be eroded.”

Indeed, farmers and ranchers have taken to social media to voice their concern over Chipotle’s marketing tactics. The Farmed and Dangerous series even prompted the Peterson Farm Bros., the Kansas farm boys responsible for the wildly popular YouTube parody videos “I’m Farming and I Grow It” and “Chore,” to write an op-ed published in the Huffington Post. In the words of Greg Peterson, “While it may seem that Chipotle is on the side of family farmers, the truth is that they are attacking thousands of family farms across America like ours that fit the definition of an ‘industrial farm.’"3

And it’s not just food producers who are questioning Chipotle’s tactics. Elizabeth Weiss, a writer for The New Yorker, had this to say about the series: “Even if no one would ever write of ‘Farmed and Dangerous’ that it represents ‘one of the high points in the TV medium’s evolution,’ that doesn’t mean that it won’t increase Chipotle’s appeal among consumers who worry about factory farming. But I wonder if it won’t make more viewers feel, well, a little icky.”4

Conclusion
America’s beef producers offer a wide variety of choices for consumers including grass-fed, natural, organic and traditional grain-finished beef. In marketing these choices to consumers it is important to stick to the facts and not misrepresent differences in production methods or the final product. Truth in advertising is an important element in maintaining consumer trust. Chipotle’s marketing team would be well-advised to assess their advertising and ask whether it truly meets their stated objective to source “ingredients that are grown or raised with respect for the environment, animals and people who grow or raise the food (emphasis added).” After all, Food With Integrity should be marketed with integrity.

Additional Resources

1 http://en.wikipedia.org/wiki/Chipotle_Mexican_Grill
2 http://www.bloomberg.com/news/2013-08-12/chipotle-to-allow-some-antibiotic-treated-beef.html
3 http://www.huffingtonpost.com/greg-peterson/the-peterson-farm-bros-be_b_4951436.html
4 http://www.newyorker.com/online/blogs/currency/2014/02/farmed-and-dangerous-chipotles-seasoned-premiere.html

Tags: Beef Issues Quarterly, Issues Updates, Spring 2014

April 8, 2014