Chipotle's E. coli crisis: A competitor's lesson in coming back

You're a restaurant owner with a crisis on your hands people ate your food, and now they are sick. Really sick. You aren't yet sure why, or how, but the news has spread across the continent, and you know you need to take action.

That was what faced Jack in the Box in 1993 171 people were hospitalized on the U.S. West Coast and four children died in an E. coli outbreak.

The company was in dire straits, desperate to change its image. And so it turned to marketing executive Rick Sittig, the man behind the Energizer Bunny, for an answer. And he invented Jack Box.

Sittig directed and voiced the spots for an ad campaign that ran for two decades, and in shortorder helped Jack in the Box fully recover, and expand. So what lessons can Chipotle which temporarily closed 43 restaurants this week in Washington and Oregon because of an E. coli outbreak learn from its fast-food competitor?

Could be worse

The first lesson, is that it could be much, much worse.

"Chipotle enjoys a very good reputation for their food quality," Sittig said. "Jack in the Box at the time did not enjoy a high reputation for their food quality. Jack in the Box was starting from a worse place."

In other words, there is no need for desperate tactics. No clown suits. No dynamite in the boardroom.

"Chipotle has a bit more credibility with their consumers they are going to be given a bit more benefit of the doubt than Jack in the Box," Sittig said.

3rd outbreak

But make no mistake, this is a crisis. It's the third outbreak of food contamination at Chipotle restaurants in recent months a salmonella outbreak affected 22 restaurants in Minnesota, and a norovirus outbreak was confined to one restaurant in California.

Still, Sittig believes Chipotle doesn't need a massive ad campaign, noting the company doesn't do a lot of advertising in the first place.

What the company should do, according to University of British Columbiaassistant professor of marketing Yann Cornil, is take a lesson from Canada's Maple Leaf Foods. Reeling from a Listeria outbreak, the company CEO got in front of television cameras repeatedly and offered apologies, explanations and promises to do better.

"Put a human face on this crisis. To have an actual human being represent this corporation that can be seen as a dark and grey impersonal entity," Cornilsaid.

Chipotle so far hasn't done that, instead choosing to respond directly to users on Twitter throughits corporate account, and issuing brief statements to the media via email.

"There are eight restaurants in the Seattle and Portland areas that may be linked to this. Out of an abundance of caution, we have closed 43 restaurants in those areas," said Chipotle communications director Chris Arnold in a statement. He later said no one at the company would be conducting interviews.

Right to close

Not talking might be a mistake, but Cornildoes give high praise to Chipotle for its quick decision to close 43 restaurants, even though only eight restaurants have been directly linked to illnesses.

"Not taking action is likely to attract even more attention and scrutiny by the media or food safety agencies."

Investors are already taking action, reflected in the stock price.Chipotle's stock dropped 2.6 per cent Monday, while that of its key rival in the industry, Qdoba Mexican Grill,rose 3.5 per cent.

Oh, and the parent company of Qdoba? Jack in the Box. Twenty-two years later, it could actually benefit from what once nearly destroyed the company an outbreak of E. coli.