CHIPOTLE MEXICAN GRILL AND CORPORATE SOCIAL RESPONSIBILITY

An Evaluation of the Integration of CSR in Business

and Its Role in a Crisis Environment.

Alberto García Durán 10 January 2019

ADVERTISING AND MARKETING COMMUNICATIONS

MA Marketing Communications and Branding Edge Hill University

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Corporate Social Responsibility (CSR) is becoming an increasingly important driver for many businesses. This case study analyses Chipotle Mexican Grill as a company that embodies sustainability and places CSR at the core of the business. In order to evaluate the case study, the pages that follow will address the development of a competitive advantage based on responsible practices and the key role of marketing to communicate the positioning and raise social awareness before and after a corporate crisis. Over the years, Chipotle has positioned itself as a socially responsible organisation. The Mexican chain’s promising figures have encouraged other companies to imitate its business model, especially in terms of customisation and quality ingredients (Jennings, 2011) whilst offering a speedy service at affordable prices (Agrawal et al., 2017). However, the company has relied on the offering of “meats from ethically raised animals, organic vegetables and locally sourced produce” (Agrawal et al., 2017: 21) to set a point-of-difference among competitors and build a valuable competitive advantage with which to approach consumers (Moodie, 2015).

As Simpson and College (2015) state, Chipotle has made the most of that positioning by ensuring the integration of CSR in its business model and organisational culture and has gone beyond public relations to become a way of acting according to responsible values. The authors claim that the corporate’s Food with Integrity mission summarises its commitments in terms of “social consciousness, the environment and societal impact of the business” (Ibid.: 40). In addition to ensure the vocation of Chipotle towards CSR, the mission guarantees a holistic approach within the organisation, producing synergies and avoiding competing forces among organisational units (Ragas and Roberts, 2009) and helping to forge alliances with suppliers that share similar values and carry out ethical practices (Chipotle, 2018c).

The positioning has become a valuable asset for the company due to its alignment with the expectations of today’s consumers regarding the responsibilities of companies with society (Agrawal et al., 2017). Besides, as proved in the study of Yoon, Gürhan-Canli and Schwarz (2006), the perception of sincerity in the application of the measures is key to CSR practices’ success. Thus, as shown below, Chipotle has built its brand based on an honest approach to sustainability, and it has achieved it through marketing communications. Nevertheless, before proceeding to examine Chipotle´s advertising campaigns, it will be necessary to discuss the challenges that endangered the company´s positioning.

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Establishing an ethical positioning could entail certain drawbacks. Although Chipotle’s “focus on CSR strategic communication helps it build brand equity and brand loyalty, this strategy also makes the brand a larger target for activist groups and customer backlash” (Ragas and Roberts, 2009: 277). Actually, the increasingly polarised and politicised messages against traditional industry procedures, as illustrated in the next section, met opposition and faced boycotts among conservative political actors and the agricultural industry (Gilkerson, Swenson and Anderson, 2016). For example, the Center of Consumer Freedom launched the campaign Chubby Chipotle to evidence the hypocrisies and dismount Chipotle’s arguments about sustainability (Center for Consumer Freedom, 2015).

Despite the fact that the responsible positioning seems to have been successful among consumers taking into account the figures reported (Czaplewski, Olson and McNulty, 2014), not all stakeholders received the same attention from the company. Firstly, when attempting to influence end consumers, Chipotle generated hostilities among farmers, a key stakeholder (Swenson, Gilkerson and Anderson, 2016). In addition, shareholders and investors were sceptical of the positioning arguing that, even being the cornerstone of the business, the corporate management was not providing data that would justify efforts in CSR (Wong, 2014). It was only after the crisis of 2015 that the company presented its first sustainability report (Chipotle, 2016). In fact, the crisis marked a turning point for Chipotle in many aspects.

During the second half of 2015, the company faced a crisis of an unprecedented scale concerning food safety and the outbreak of foodborne illnesses in its chains, infecting hundreds of customers, across several states, with E. coli, norovirus and Salmonella (Tuttle, 2016). Critics questioned the slow response of the organisation, the incapability of finding the sources of the outbreaks and, especially, the susceptibility of fresh food to diseases compared with processed ingredients of other chains (Stewart, 2016; Tuttle, 2016). Besides, the crisis not only entailed a major drop in the company’s share, but also had grave implications in its reputation, built up on the basis of fresh, natural and organic ingredients (Tuttle, 2016). In this way, the author notes that “the company’s greatest strength suddenly became its greatest weakness as ‘food with integrity’ turned into meals of uncertainty” (Ibid.: 16).

With the objective of restoring the brand image, the company made a substantial investment in food safety and marketing (Tuttle, 2016). On the one hand, the founder, Steve Ells, presented new protocols and stricter measures beyond statutory requirements, ensuring that customers and suppliers would not incur these costs

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(Ibid.). This relates to two characteristics of CSR exposed by Crane, Matten and Spence (2014) and Alexander (2015): the voluntary character of the programs and the non-externalisation of negative impacts on stakeholders, respectively. On the other hand, Chipotle carried out a shift into a new communication approach, as detailed below. Chipotle’s marketing communications seek to stimulate interest and open up discussions about the agri-food sector practices (Swenson, Gilkenson and Anderson, 2016) with topics regarding “healthy foods, humane animal treatment, and environmental sustainability issues”, according to Gilkerson, Swenson and An-derson (2016: 117). The authors state that the approach has focused on emphasising the unsustainable and negative practices sur-rounding the traditional industry while associating Chipotle with more ethical behaviours and natural ingredients.

In recent years, Chipotle’s advertising has been based on short stories about the embracement of sustainable behaviours. In 2011, the company launched its first two-minute video, Back to the Start, showing how a farmer decides to invest in more natural farming methods after being part, and judging the procedures, of an industrial farming cor-poration (Gilkerson, Swenson and Anderson, 2016). This decision of investing in storytelling could be associated with the persuasive nature of video advertising, which facilitates changes in consumption patterns (Bellman, Rask and Varan, 2017). Over time, those video campaigns have introduced more interactivity (Czaplewski, Olson and McNulty, 2014) and the study of Eberle, Berens and Li (2013) proves that interactive content, when promoting CSR, increases credibility in the messages and enhances brand identification. For example, with its second animated campaign, The

Scarecrow, Chipotle also launched an app with which people could impersonate a contem-

Exhibit 1. Development of the ethical storytelling of Back to the Start (Nexus Studios, 2012)

Exhibit 2. Interactive iPad app of The Scarecrow

(Chipotle Mexican Grill, 2014)

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porary hero whose mission was to save a city from the clutches of a devil industrial corporation and its non-responsible practices (Chipotle Mexican Grill, 2014). This kind of campaign can be considered unbranded entertainment due to the subtle presence of the brand and its claims (Simpson and College, 2015) and can benefit companies with engagement and credibility of their cause advertising (Bellman, Rask and Varan, 2017).

Nevertheless, the polarized messages of the campaigns favoured a wide range of reactions. According to Swenson, Gilkerson and Anderson (2016), while part of the audience believed the true commitment of the brand to create a better world, others

contended that Chipotle was being dishonest, manipulative and unfair with some actors of the food in-dustry. It is noteworthy that the increasingly aggressive tone of its advertising campaigns reached a high just before the eruption of the crisis.

In 2014, the company explored new advertising platforms and launched a miniseries called Far-

med and Dangerous in hulu.com and Huffington Post, which led to several critics from agricultural stakeholders and negative press within the industry (Gilkerson, Swenson and Anderson, 2016; Simpson and College, 2015). In this occasion, the campaign related the story of an evil fictional food company that developed aggres-sive industrial production practices, such as the use of antibiotics or the reliance on fossil fuels, and the fight of an ethical farmer against these procedures (Gilkerson, Swenson and Anderson, 2016; Simpson and College, 2015). The study of Bellman, Rask and Varan (2017) confirmed the effectiveness of the unbranded content campaign in terms of changes in beliefs and purchasing intentions, with customers evaluating posi-tively sustainable practices. How-ever, the authors highlight that, by having a subtle presence in the content and promoting sustain-able methods in general, the cam-paign not only benefited Chipotle but also competitors with similar approaches.

After the crisis, the company has focused again on freshness and sustainability but with a less

Exhibit 3. Innovative format and platform of Farmed and Dangerous (Clio Awards, 2014)

Exhibit 4. Shift in the tone of A Love Story and Ingredients Reign (Passion Pictures, 2016; Wohl, 2016)

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offensive approach. It could be argued that the new strategy seeks to repair relations and restore confidence with certain stakeholders. In this way, after imple-menting a series of promotions and a loyalty program to counterattack the food scandal (Wohl, 2017), the company launched A Love Story and Ingredients Reign. The former campaign had the objective of raising awareness about a simpler way of consumption (Passion Pictures, 2016), whereas the latter was consistent with its wager on animated storytelling but opting for a more positive discourse (Wohl, 2016).

The investment in advertising doubled the pre-crisis figures (Kell, 2017) and Ingredients Reign marked Chipotle’s return to television (Wohl,

2016). Since then, the company has adopted traditional advertising and transmedia campaigns to strengthen its brand presence be-yond the digital world (Kell, 2017; Chipotle, 2018b). In addition to increase audiences by launching spots on national television, the company is also trying to reach new segments and explore new channels. With this aim, in 2017, Chipotle launched RAD Lands, a series available on iTunes with which children and par-ents could learn about sustainabil-ity along with The

Cultivators’ elite team (Chipotle, 2017). In its last campaign, For Real, the company introduced a new platform from which to show the real nature of its meals by creating a new Instagram account, @ChipotleForReal, in which Chipotle’s 51 ingredients are the protagonists (Chipotle,

Exhibit 5. Examples of different media—TV and outdoor—of the humorous

As Real as It Gets campaign(Mullenlowe Group, 2017; Kell, 2017)

Exhibit 6. Younger audiences targeted in RAD Land series (Chipotle, 2017)

Exhibit 7. Instagram account launched together with the For Real campaign (Chipotle, 2018a)

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2018b; Finney, 2018). It could be argued whether all these strategies could support a transition towards the recovery of the company. The case of Chipotle demonstrates that business and social interests are more connected than opposed (Porter and Kramer, 2002). In fact, the holistic approach of the company towards CSR and ethical behaviours, going beyond mere investments on res-ponsible activities, has become its biggest competitive advantage and point of differentiation. This is because, as maintained by Smith and Lenssen (2009), consumers are more interested in how companies build their benefits rather than how they expend them.

Nevertheless, customers are not the only stakeholder of companies. Although Chipotle’s positioning may have proved its effectiveness in penetrating the minds of customers, companies should not follow the example of the company when ignoring or, even worse, attacking part of their stakeholders. Instead, companies should pay attention to all their different interests and carry out actions in response, to the extent possible.

Furthermore, it should be noted the role of CSR in helping companies to recover from crises. The fact that Chipotle im-plemented ethical practices, such as the use of organic vegetables or animals raised without antibiotics, may have had to do, to some extent, with the emergence of the illness outbreak. However, the previous CSR-related actions undertaken by Chipotle and its real commitment towards sustainability could have helped the or-ganisation to recover its image and mitigate the damage of the crisis. This is because, as stated by Vanhamme and Grobben (2008), CSR is effective to tackle crisis when the organisations have a record on responsible behaviours.

As the case study has illustrated, the image and reputation in which brands work for long time can be tarnished without notice. For this reason, companies should value the investment in responsible practices and the enhancement of sustainable ap-proaches that could become a sustainable competitive advantage and, one day, could help them to emerge strengthened from a crisis. In fact, due to Chipotle’s long-term commitment to CSR, the company can still cultivate a better world by serving food with

integrity in its chains.

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