One Company Thinks They've Created Fast Food With a Conscience -- Are They Right?
If you look at the fast food industry through a Darwinian lens, successful evolution is about bigger and cheaper. How many calories can be squeezed between the book ends of a bun? How many pennies can the eager eater save? For a buck or less you can get a breakfast sandwich at McDonald's, a quarter-pound double cheeseburger from Burger King, or a five-layer burrito from Taco Bell.
Of course the quality of the food is questionable and the costs to your health and the environment either get externalized or are not paid for years, maybe even generations. But does it have to be that way? Do we have to compromise our values to get a "value meal"? Can we buy food made quickly and have it taste good and be better for us? Can fast food actually have a conscience?
Oprah thinks so. As the great influencer of consumer culture in America, the talk show maven recently hosted Steve Ells, the founder of Chipotle Mexican Grill in an episode on "Food 101." The show also featured best-selling author Michael Pollan, vegan actress Alicia Silverstone and the groundbreaking documentary film Food Inc.
Since its founding in 1993, Chipotle has begun to emerge as a kind of rock star in the food world. It's fast food, but it's fresh, and the company's "food with integrity" philosophy has earned it all sorts of accolades among sustainable eaters. For a restaurant chain, it has done so much right, including buying more organic and local produce and naturally raised meat. But in the long list of merits, there is a pretty serious stumble that has human rights activists howling.
The controversy comes from the sourcing of Chipotle's tomatoes: Florida, virtually the only place to get tomatoes in winter. Workers there are facing human rights abuses, and even at times, documented cases of downright slavery. A leading human rights group has been working with fast food companies like McDonald's and Burger King to improve conditions, but Chipotle has thus far refused to join the effort. As Sean Sellers asked in a recent story on Grist, "All of which brings us to a question posed by Eric Schlosser at last year's Slow Food Nation conference: 'Does it matter whether an heirloom tomato is local and organic if it was harvested with slave labor?'"
First, the Good Stuff
Chipotle is not your average fast food restaurant. This is evident for a lot of reasons, the most obvious being that you can't get a meal for a dollar or for that matter even a side of salsa. And that should be considered a good thing.
About 10 years ago, Ells, who is the founder, CEO and also a chef, was fiddling with the carnitas recipe, which just didn't taste as good as he thought it should. At the same time he read Ed Behr's newsletter, The Art of Eating, where he learned about Niman Ranch, a collective of family farmers who were raising pigs the old-fashioned way. These animals weren't given hormones and were free to romp in pig-style in the great outdoors.
Ells flew to Iowa to visit Paul Willis, a farmer participating in the Niman co-op. He liked what he saw there -- and liked it even more when he saw the alternative. After visiting the Willis ranch, he paid a visit to a concentrated animal feeding operation (CAFO) that was typical of the source for the kind of commodity pork he had been using. Conditions at the CAFO were horrifying.
Ells saw the light. "He realized that fresh wasn't enough," said Chris Arnold, Chipotle's spokesperson. "If you were going to serve the best-tasting food, you need to understand how animals are raised and vegetables are grown because those things impact on the taste and beyond that they have environmental, animal welfare, and social implications."
Fast forward to today. Chipotle sources 100 percent of its pork from Niman and other ranches that raise "natural" meat, as their non-CAFO style is called. The standard includes animals raised without antibiotics or growth hormones, given room to move around, and fed vegetarian diets.
About 100 percent of Chipotle's chicken and 60 percent of its beef come from naturally raised meat. And when you're serving 70 million pounds of meat a year, that's pretty significant. And it's not just meat, all the dairy is free of the recombinant bovine growth hormone (rBGH) and Arnold says they are working on moving more to milk products from pasture-raised dairy cows (which is far better for animal welfare, the environment and the health and taste of the product).
Chipotle also gets 40 percent of its beans from organic sources and buys produce from local farms when it is seasonally available. Local, by the way, is about a 200-mile radius. The minimum standard now is getting 50 percent of at least one produce item from a local farm, and more when they can, says Arnold.
Adding more organic beans and veggies is in the works, he says. It's a never-ending process to improve the sourcing for ingredients. This means you'll shell out $6 or more for a burrito, but most people think it's worth it. So many, in fact, that in 17 years Chipotle has grown to nearly 1,000 restaurants and is likely to add another 120 to 130 this year. For a while, some of that growth was being spurred by McDonald's, which owned a majority share in the company between 1999 and 2006.
But even after breaking free of the fast food giant, Chipotle is doing better than OK. It's serving about 700,000 people a day and made over $1 billion in sales last year. What's the secret to its success? "Our economic model is built to spend more money on food -- we have the highest food cost as percentage of revenue but we also have among the best profit margins in the industry," said Arnold. He attributes that to "efficiencies everywhere else."
The Trouble With Integrity
Ells's decision to move his company to more naturally raised meat came after seeing the exploitation of animals in CAFOs and not wanting his company to profit from that, said Arnold. The company's manifesto on its Web site reads, "Food With Integrity means working back along the food chain. It means going beyond distributors to discover how the vegetables are grown, how the pigs, cows and chickens are raised, where the best spices come from."
There is just one thing missing from this supply chain and that's the farm workers. And here is the source of Chipotle's trouble.
Last year the company decided to sponsor screenings of the documentary Food Inc. featuring leading food experts like Pollan. There was just one snafu. Two of the people responsible for the film, Fast Food Nation's Eric Schlosser, who produced the documentary, and its director Robert Kenner, were among a group of activists who signed a letter sent to Chipotle's Steve Ells calling him out on his tomato purchasing policies because of the gross human rights abuses and slavery in Florida's fields.
Since 1993 the Coalition of Immokalee Workers (CIW) has been focused on reforming the system that allows for these abuses. It has come to be known as one of the top anti-slavery organizations in the country, earning praise from Florida Governor Charlie Crist, FBI Director Robert Mueller, the Robert F. Kennedy Memorial Human Rights Center, and Anti-Slavery International, as Sellers wrote on Grist.
One of the strategies employed by CIW to improve conditions for tomato pickers has been to target fast food chains that buy tomatoes in bulk and have the market leverage to influence wages and conditions. CIW's Campaign for Fair Food has won over some of the largest and most stubborn fast food giants in recent years, including McDonald's, Burger King, Subway and Yum! Brands (the parent company of Taco Bell, KFC and Pizza Hut). The campaign calls for a penny per pound raise for workers and an improved supplier code of conduct -- it is basically a system that rewards growers that go above and beyond the bare minimum of the law. What the program does is create a market incentive for change. For instance, once Taco Bell signs on, it means they will give preference in where they buy their tomatoes to growers who are abiding by the penny per pound raise and CIW's code of conduct.
In addition to top fast food companies, Whole Foods and large foodservice companies Compass Group and Bon Appetít are also on board.
But, much to the bafflement of labor and human rights activists, Chipotle is not. In the food business, Chipotle, even with close to 1,000 restaurants, isn't considered a major player. But Chipotle's declaration of "Food with Integrity" has made it a target for CIW and other human rights activists. And its recent sponsorship of Food Inc. drew a large outcry for its blatant hypocrisy.
The letter sent to Ells that was signed by Schlosser and Kenner says, "Yet for us, naturally raised meat -- important as it is -- does not trump decently treated human beings. We are outraged by the working and living conditions we have seen in the Immokalee area of Florida, source of some 90 percent of the winter tomatoes consumed in the United States."
How Bad Is It?
To understand why this is such a big deal, it's helpful to know a little about the tomato picking business. Here's how CIW sums it up in its letter to Ells:
In the winter-tomato market, a small number of very large buyers dictate terms to the seven or eight entities that control land in tomato country; those growers, in turn, squeeze the workers in brutal fashion. Real wages have fallen dramatically in Immokalee over the decades and now hover well below poverty level; housing conditions would not be out of place in apartheid-era South Africa.
These are the normal conditions, experienced by thousands of workers in south Florida. No one can be surprised that in some extreme cases, right now, some of the people who pick our tomatoes are living in what can only be called modern-day slavery: held against their will and forced to harvest tomatoes without pay. In this context, Chipotle cannot claim the same integrity for the tomatoes it serves as it does for its meat, much less guarantee its customers that the tomatoes in its burritos were not picked by slaves.
The numbers are staggering. Tomato pickers have been making about the same money since 1978 -- 45 cents per 32 pound bucket, which means that workers have to pick and haul over two tons of tomatoes a day just to earn minimum wage for a 10-hour day. And those are the workers who are actually able to collect their money and aren't just ripped off come pay time.
Of course, the pay and conditions for farm workers across America, not just tomato pickers, is dismal at best. As Americans' consciousness about eating healthy food increases, as we talk more and more about organic and local, where is the conversation about the plight of farm workers?
"Broadly speaking, however, labor and human rights have been strictly segregated from the sustainability agenda," Sellers wrote in his Grist article. "Thus it is possible for Chipotle to dream of 'revolutionizing the way America grows, gathers, serves and eats its food,' without ever once mentioning the human beings who plant and handpick the majority of our fresh fruits and vegetables."
There are three million farm workers in the U.S., Sellers reports, and they are the backbone of a trillion-dollar food industry. Thus far, it has been organizations like CIW which has continuously rallied to change the course of business and consumer consciousness. So why hasn't Chipotle signed on?
It's not that the company is unaware. And it is not that it doesn't care about workers. Last year, Chipotle finally agreed to the penny per pound raise, but did it on its own terms, and not through CIW. (And consequently, not in a way that could be verified.)
"We think we have a lot of common ground with the CIW in that we're both working to improve elements of the food supply system," said Chipotle's Arnold. "Where we differ is the CIW is looking at one piece of the puzzle, farm worker rights in Florida. We're looking at it very holistically. That's why we were the first large commercial buyer to strike a deal with a grower that actually allows for the improvement of wages for farm workers."
But critics blasted Chipotle's go-it-alone approach as lacking transparency, and its unwillingness to work with actual farm workers through CIW. The main premise behind the Campaign for Fair Food is not just better wages, but allowing the workers to have a say in what a fair tomato industry would look like and what reforms need to be made. "That's why Chipotle's response to this thing has been so unsatisfactory," said Sellers. "They have refused to recognize the importance of worker participation in advancing and defending their own labor rights."
Sellers quotes Gerardo Reyes of CIW, who said, "Under their plan, Chipotle will review its own code of conduct and decide if any changes are appropriate, Chipotle will oversee its own payments under its penny per pound plan, and Chipotle will verify its own compliance with the changes it is proposing. That's just not credible. Transparency, verification, and participation are essential elements of the agreements we have reached with other fast-food leaders, and they are essential elements in any defensible definition of social responsibility."
Arnold contends that Chipotle has built a "ten-year-plus track record of driving positive change in the food supply industry with out third party agreements." But, it could be argued, third parties are one of the most crucial forces in trying to improve labor conditions.
As an example, Chipotle previously had backed an industry-established group called SAFE, Socially Accountable Farm Employers, which was basically set up by the industry to monitor itself. As you can guess, SAFE didn't pan out that well and has been largely discredited. In fact, two of the farms certified by SAFE were implicated in a 2007 slavery case.
"Chipotle had no idea it was buying from one of the growers tainted by the most recent slavery prosecution until the CIW told them about it," said Sellers. "They would have known much earlier if they had a real working relationship with the CIW."
To make matters worse, Sellers says Chipotle has publicly slighted the accomplishments of CIW and real efforts for change in labor conditions for farm workers. He quotes Ells in a talk given to the University of Pennsylvania's Wharton School of Business last fall: "I mean, they just don't see the bigger picture," Ells said. "To change the fast-food paradigm is huge. We're trying to do the right thing."
CIW member Leonel Perez disagrees. "Steve Ells says that our campaign will not change agriculture. But seven giant food retailers and three Florida tomato growers -- including the third largest in the state and two specialty growers -- are now working with us to improve thousands of farm workers' wages and working conditions. If Chipotle is serious about improving farm workers' lives, they will follow the lead of Whole Foods, McDonald's and others in signing a binding agreement with the CIW."
Whether Chipotle will be willing to team up with CIW in an effort to improve labor conditions is yet to be seen. Sellers has invited Ells to a public debate about the issue, but Ells has yet to take him up on the offer. Still, it's not too late for Ells to be consistent about changing the fast-food paradigm.