Chipotle's Carnitas are back, but is Everyone Happy?

Last week I wandered into the Chipotle restaurant across The University of Texas campus here in Austin. A rumpled paper sign was still posted on the window, informing customers not to expect carnitas on the menu.

Chipotle surprised and amazed its customers and competitors when it announced in January 2015 that the company would drop its pork supplier because it found out that one of its farmers was not complying with Chipotle’s animal welfare standards. Chipotle requires that its pork suppliers’ farmers only use antibiotics on a limited basis, not for therapeutic reasons. The company also discourages its suppliers from using traditional farrowing practices, the use of crates and confined spaces.

Many farms find it difficult to comply with all of these standards. While some may limit or no longer use antibiotics, they may still find that farrowing crates limits sows from overlying piglets, despite animal welfare activists' dissent.

Almost a third of the Chipotle restaurants across the country went without carnitas, the menu item that uses pork as the main ingredient. To refill its supply chain with acceptable pork, Chipotle went all the way to England to source pork from Karro because of European standards for limited use of antibiotics.

Still, one has to wonder how Chipotle balanced the message of its stand for animal welfare with the extension of its supply chain overseas. Locavores must have shuddered when the effort to be consistent with animal welfare standards sacrificed a domestic supply chain. Less antibiotics traded for more cost and carbon? Who weighs these tradeoffs? The change in suppliers impacted Chipotle’s sales and stock price, although the company has maintained its relative value because of the demand for fast-casual food.  

These days customers are scrutinizing food companies such as Chipotle to ensure that they are transparent and consistent with perceived ethical practices. Everyone is now an activist shareholder, it seems. And the scrutiny is unrelenting; Chipotle recently came under attack for refusing to use GMO ingredients.

Increasingly, a food company’s supply chain is a topic of concern for consumers. Look for more pressure from the market to demand changes in sourcing, causing more than one supply chain manager to lose a few night’s sleep. An even greater kicker? The supply chain industry, where much of the insight into carbon intensity and animal welfare lies, is incredibly hard to crack into. Just try calling up Sysco or one of the other big food distributors to find out exact locations of warehouses and transportation routes. The supply chain is so opaque, in fact, that probably very few of us can say that we personally know anyone who works directly in food logistics . . . or even know that food logistics is a formal trade industry.