Millennials: in wake of Chipotle, it's time to understand how the sausage gets made

 
 

Millennials: in wake of Chipotle, it's time to understand how the sausage gets made

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Today's Bloomberg Business has an in-depth article about Chipotle's Icarus moment, and tone deaf response. It also peels back the curtain on Chipotle's supply chain, and how much like McDonald's the company really is, despite constantly deriding other fast food companies. Some but not all know that McDonald's once owned Chipotle and no doubt Chipotle made a lot of money from that. Double standards aside, the article points out people are as incensed with Chipotle's tone deaf response ranging from snarky (one Chipotle restaurant posted a sign on the front door about order being restored to the universe soon) to the overconfident pretend-its-not-as-bad-as-it-seems PR.

Steve Ells, Chipotle's founder and co-chief executive has made the news rounds and after the appropriate apologizing, is proclaiming how safe the food now is and how we can all get past it, in a way that reminds me of Colorado's Governor, John Hickenlooper, drinking orange water from the Colorado river (after he added an iodine tablet) to prove the EPA's biggest fuck up in history was no biggie.

Now they have to revamp their food prep and take the same major precautions that their evil big business competitors seem a lot better at doing. So Chipotle will add cilantro to hot rice to kill microbes, and citrus juices like lime being added to salsa. Ever on brand, Ells enthuses: “And guess what? ....It turns the salsa a brighter red and gives a sweeter taste.” Hooray? I'm sure that will make the people who got sick at your restaurant come running back for more.

Sometimes you should just say sorry and leave it at that. Or at least think twice about the way you communicate because you might be sending the wrong message. Just ask Airbnb. Or Goldieblox for that matter.

Chris Collins, a 32 year old web developer in the Portland area was one of the many hundreds who got very sick from Chipotle. He describes in vivid detail the ordeal he went through and how he's still feeling the long lasting effects six weeks later and of course will now sue. But one part of his interview just jumped out at me.

“I trusted they were providing me with ‘food with integrity,’ ” Collins says, sarcastically repeating the company motto. “We fell for their branding.”

900 words in to Bloomberg’s nearly 4,000 word article, is a sticky quote “Millennials discriminate; bacteria are agnostic.”

Collins "advertising tricked us," lament doesn't exactly sound like a discriminating Millennial to me. I suspect it's because despite the reams of articles that have been written to the contrary, Millennials are a demographic like any other. You find where they hang out, and what they believe in and what their concerns or needs are and then you craft that communication around it. They are just as loyal to brands as any other demographic, provided the brands are appealing to their sensibilities. According to Nielsen, Millennials have the highest level of trust when it comes to online and mobile marketing. Precisely where Chipotle's advertising has thrived for the past few years.

I would suggest that in some ways Millennials are actually less discriminating. Or at least no more discriminating than any other demographic who doesn't really want to know how the sausage (burrito?) gets made. Sticking with Chipotle for a moment, for years they've been running a campaign of "It's us against them," almost like it was the little guy. A half second google search shows McDonald's stock is worth $111 a share and Chipotle's is worth $496 because Chipotle, too, is a huge big business. But that don't matter because the videos were massive hits and there are short stories on its packaging. In the same way Hillary Clinton likes to pretend she's a just a regular middle class person down with the struggle despite being worth thirty million dollars. Perception is reality.

This might also go a far way to explain why superficial clickbait stories and clicktivism campaigns with shaky foundations have thrived in this age. The brands and causes that are liked by Millennials are the ones who have figured out how to make you buy stuff because they keep their their very visible links to their nasty big business counterparts, and hypocritical flaws just beyond the reach of a microwave mentality.

Consider KONY 2012. It became a Millennial clicktivism hit in spite of its half-truths and other flaws. In an age of 140 chars, and tl;dr, who has time or desire to research? It's easy to hit like, retweet and share and then feel good about yourself than it is to cast a critical eye on the newfangled disruptor who has appeared as a sexy alternative to our parents' brands.

Consider Google, and Apple, two favored Millennial brands who for years have avoided paying their fair share in taxes and are hiding most of their money off shore but it's okay because doodles and smart watches.

Consider Amazon. one of its initial angel investors, Nick Hanauer, estimated the e-commerce juggernaut probably killed a million brick and mortar jobs since its inception in the 1990's making Walmart seem benevolent by comparison.

Consider Tom's whose activism brand has done more to hurt the local manufacturing economy of underdeveloped nations and is in fact creating a culture of dependency in the countries it purports to help.

My point is not to trash brands that do good or tech brands just to be a hater. It's to get people who say they care to actually do some homework so that next time you can call bullshit on the marketing communication. Brands shouldn't get a pass because they smile or say they do good or say they are one of us. If we're all citizen journalists more of us need to start acting like it by doing the research. If you don't want to get fooled by advertising, you need to get smarter.

Comments

The share price of a company is meaningless on its own in assessing the value of a company. The market capitalization of a company is "Share Price" x "# of Shares"

Chipotle's market capitalization is $15.19B while McDonald's market capitalization is $108.09B, meaning McDonalds is valued roughly 6.5 times higher than Chipotle.

It stands to reason that McDonalds would be valued at roughly 7 times the value of Chipotle - McDonalds is a far larger company that owns far more property. Mainly, McDonalds' footprint is global while Chipotle is overwhelmingly U.S.-focused. Chipotle does look to be expanding outside of the U.S., but they have a long ways to go to catch up to McDonalds.

Meant to put "6.5 times the value" in the last paragraph!

Yes, it also stands to reason that since Mcdonald's has been around since 1940 and Chipotle hasn't, McDonald's would have a greater chance at being worth a lot more more. I wasn't out to play Motley Fool on investments though. It's more that Chipotle is still a giant freaking company with market capitalization at 15.19 billion, as you pointed out.

My larger point, and indeed the point of the majority of this article is that Chipotle makes enough money to fall under the Big Capitalist rubric, and yet their advertising suggests otherwise, and when they get caught with a PR nightmare, they aren't so deft at handling it.

People would do well to follow the money.

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