Consumer

Shelly Banjo is a Bloomberg Gadfly columnist covering retail and consumer goods. She previously was a reporter at Quartz and the Wall Street Journal.

If you didn't already think Chipotle was out of touch with reality, here's another reminder: The burrito chain may now be cooking up a new plan to sell burgers. 

In case you forgot, Chipotle has its hands full with a major PR crisis stemming from a series of food safety incidents linked to people who got sick after eating at its restaurants. Its stock is down 29 percent over the past year. Sales are in free fall. In some cases, it can't even give its burritos away

Raw Deal
Chipotle's shares have tumbled as it tries to recover from a food-safety crisis
Source: Bloomberg

Now, Bloomberg's Leslie Patton writes, the Mexican food chain filed a trademark application this month for a new restaurant chain called "Better Burger." Spokesman Chris Arnold confirmed the company is exploring the idea of applying the better-for-you Chipotle model to burgers. 

It's not such a surprise -- U.S. consumption of beef is expected to rise this year for the first time since 2006, stemming a decades-long consumer shift to chicken from beef. Excess cattle supply has led to cheaper beef prices, and it's hard to overlook the success of trendy burger chains such as Shake Shack, Five Guys and Smashburger. Plus, Chipotle's one time corporate parent, McDonald's, has likely taught executives a thing or two about running a burger company -- though the irony is that McDonald's sold Chipotle because the fast-growing chain had become too much of a distraction from running the Golden Arches.

Hold The Burger
Beef consumption has dropped dramatically, but could be mounting a comeback
Source: Bloomberg, USDA

But it's worth pointing out that a company having a hard time managing its supply chain and keeping contaminants out of its food might want to steer clear of one of the biggest culprits when it comes to food-borne illness: ground beef.

“Up to 28 percent of Americans eat ground beef that’s raw or under-cooked,” Hannah Gould, an epidemiologist at the Centers for Disease Control and Prevention, told Consumer Reports last December.

In an examination of 458 pounds of beef (or roughly 1,832 quarter-pounders), Consumer Reports found that every single pound of beef contained bacteria signifying fecal contamination (which can cause blood or urinary tract infections).

Meanwhile, 46 percent of E. coli O157 illnesses and 9 percent of Salmonella food-borne illnesses can be traced to beef, according to a February 2015 analysis of outbreaks from 1998 to 2012 by the USDA, CDC, and the Food and Drug Administration. 

Part of the problem has to do with people preferring their burgers cooked rare. But it also has to do with the way ground beef is made: Bacteria from slaughtering or processing other types of meat might stay on the outside of a steak, but is literally mixed into the beef when it's ground up. The meat of multiple animals is often mixed together in ground beef, which can contribute to spreading the bacteria. And increasing use of antibiotics in farming has led to antibiotic-resistant bacteria, which can lead to more serious infections, according to the Consumer Reports study. 

I might also remind you of the deadly 1992 E. Coli outbreak at Jack in the Box, which left four people dead and 144 people hospitalized. At least 29 people had kidney failure. It turned out Jack in the Box was under-cooking its burgers, and its suppliers were sending it contaminated meat.

While a burger chain remains just a consideration for Chipotle right now, it's probably best for the company to get a handle on serving safe burritos first before taking on another business concept that carries real risks. 

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Shelly Banjo in New York at sbanjo@bloomberg.net

To contact the editor responsible for this story:
Mark Gongloff at mgongloff1@bloomberg.net