Chipotle Mexican Grill, Inc. (NYSE:CMG) has taken aggressive actions to implement industry-leading food safety and food handling practices in all of its restaurants and throughout its supply chain. Its enhanced food safety program will establish Chipotle at the forefront of food safety protocols in the restaurant industry.
“While Chipotle’s food safety practices were already well within industry norms, I was asked to design a more robust food safety program to ensure the highest level of safety and the best quality of all meals served at Chipotle,” said Mansour Samadpour, Ph.D., CEO of IEH Laboratories and Consulting Group. “I am happy to report that our proposed program was adopted in its entirety, without any modification. While it is never possible to completely eliminate all risk, this program eliminates or mitigates risk to a level near zero, and will establish Chipotle as the industry leader in this area.”
Work on Chipotle’s enhanced food safety program began immediately after reports surfaced at the end of October that linked 11 Chipotle locations in Washington and Oregon to E. coli cases in those states. Even though there is no evidence of exposures after the period ofOctober 13 to November 7, and no new illnesses have occurred since then, officials at the Centers for Disease Control and Preventionhave indicated that additional cases may yet be reported as cases make their way through various state health departments to the federal health officials.
Specifically, Chipotle has set an objective to achieve the highest level of safety possible. The company retained Seattle-based IEH Laboratories to help it identify opportunities to enhance food safety practices throughout its operations – from the farms that supply its food to its restaurants that prepare and serve it.
Chipotle’s enhanced food safety program is the product of a comprehensive reassessment of its food safety practices conducted with IEH Laboratories that included a farm-to-fork assessment of each ingredient Chipotle uses with an eye toward establishing the highest standards for safety. Specifically, program components include:
- Implementing high-resolution testing of all fresh produce in which a series of DNA-based tests will ensure the quality and safety of ingredients before they are shipped to restaurants, a testing program that far exceeds requirements of state and federal regulatory agencies, as well as industry standards.
- Initiating end-of-shelf-life testing where ingredient samples will be tested to ensure that quality specifications are maintained throughout the shelf life of an ingredient.
- Pursuing continuous improvements throughout its supply chain using data from test results to enhance the ability to measure the performance of its vendors and suppliers.
- Enhancing internal training to ensure that all employees thoroughly understand the company’s high standards for food safety and food handling.
Thousands of food sample tests from Chipotle restaurants linked to the incident have shown no E. coli. No ingredients that are likely to have been connected to this incident remain in Chipotle’s restaurants or in its supply system. No Chipotle employees have been identified as having E. coli since this incident began.
“When I opened the first Chipotle 22 years ago, I offered a focused menu of just a few things made with fresh ingredients and prepared using classic cooking techniques,” said Steve Ells, chairman and co-CEO of Chipotle. “We do the same thing today, even with nearly 2,000 restaurants, and we are working harder than ever to ensure that our food is safe and delicious.”
According to the Centers for Disease Control and Prevention, there are about 48 million cases of food-related illness in the U.S. annually, including 265,000 cases of E. coli.
Since this incident began, Chipotle has continued to serve more than 1 million customers a day in its restaurants nationwide without incident. (Original Source)
Shares of Chipotle Mexican Grill closed yesterday at $565.31, down $9.35 or -1.63%. CMG has a 1-year high of $758.61 and a 1-year low of $532.03. The stock’s 50-day moving average is $621.84 and its 200-day moving average is $668.52.
On the ratings front, Chipotle has been the subject of a number of recent research reports. In a report issued on November 23, Piper Jaffray analyst Nicole Miller Regan reiterated a Buy rating on CMG, with a price target of $737, which represents a potential upside of 30.4% from where the stock is currently trading. Separately, on the same day, Wells Fargo’s Jeff Farmer reiterated a Hold rating on the stock and has a price target of $527.50.
According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Nicole Miller Regan and Jeff Farmer have a total average return of 1.5% and 19.2% respectively. Regan has a success rate of 53.7% and is ranked #1372 out of 3631 analysts, while Farmer has a success rate of 86.4% and is ranked #353.
The street is mostly Bullish on CMG stock. Out of 21 analysts who cover the stock, 11 suggest a Buy rating , 9 suggest a Hold and one recommends to Sell the stock. The 12-month average price target assigned to the stock is $690.97, which implies an upside of 22.2% from current levels.
Chipotle Mexican Grill Inc operates Chipotle Mexican Grill restaurants, which serves a menu of burritos, tacos, burrito bowls (a burrito without the tortilla) and salads, made using fresh ingredients.