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Fast Food

Chipotle's struggles continue as competitors move in

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A Chipotle employee prepares a burrito bowl. (Reuters)

Chipotle Mexican Grill has been busy handing out free burrito vouchers in an effort to win back customers.

But if you’re the sort who eats only non-GMO grub-- or if you're still worried about food safety issues, you’ll have to decide whether that carnitas bowl is even worth paying nothing for.

The fast casual dining chain, which proudly boasts about its “food with integrity,” saw its customers vanish and its earnings and stock prices plummet last year when 60 people in 14 states became sick with E. coli infections, and hundreds of other customers were sickened by salmonella and norovirus.

The company says it has taken measures to minimize the chances of future outbreaks – going so far as to close all its restaurants for a few hours one morning in February to educate its staffers on food safety. 

Now it’s trying hard to persuade its once-loyal customers to come back and enjoy some chips and guac.

To date, the burrito and bowl chain has given away coupons for 9 million free burritos, and they appear to be working-- at some locations. According to a survey conducted early this month, 41 percent of customers who received a coupon had visited Chipotle’s 3.8 times in the prior 30 days. The 59 percent who didn’t get a coupon came only 1.4 times.

But whether that burrito is “non-GMO,” as Chipotle says it is, is a matter of interpretation. The company proclaims that “In 2013, Chipotle made headlines for becoming the first national restaurant chain to voluntarily disclose the presence of GMOs (genetically modified organisms) in our food. In 2015, we succeeded in our quest to switch to serving food made only with non-GMO ingredients.”

Not really, says a Florida woman named Leslie Reilly, who sued the company in September, claiming she paid a “premium price” for her food because she believed it did not contain GMOs.

What if the ingredients – say, a cow or a chicken – have been eating feed that contains GMOs? If a steer eats feed that contains GMO corn, can you call the beef on your plate GMO-free?

No way, says Reilly. Yes way, says Chipotle.

There is no federal definition of non-GMO ingredients, but Reilly maintains that if genetic modification occurs at any step of the production process, food should not be labeled non-GMO.  According to the USDA, to qualify as organic, meat must be free of antibiotics or synthetic hormones and cannot be fed GMO feed. 

But Chipotle has made no claims about the relative organic-ness of its meat offerings

The Mexican Grill says it’s “working hard” on sourcing meat and dairy from animals that are not raised on GMO feed, but it’s not there yet. And besides, it says, many of the soft drinks it serves include high fructose corn syrup, “which is almost always made from GMO corn.”

U.S. District Judge Marcia G. Cooke denied Chipotle’s motion to dismiss Reilly’s case last week, rejecting the company’s claim that Reilly’s interpretation of “non-GMO” was “nonsensical” and not how most consumers would define it.

But as the chain continues to face more problems, its competitors are taking advantage of an opportunity to move up the world of fast-casual Mexican food.

Qdoba is not only looking to expand the number of its locations but has been snapping up larger store fronts to make itself into a destination-- not just a take-out place.  A new store design is being tested in about 30 domestic locations, which includes community tables, mix-and-match seating (no chairs bolted to the floor), and outdoor patio space, reports Eater. A company spokesman said the new move will help turn the eatery into more of a "gathering space" and new menu items will feature seasonal ingredients and shareable items.

Another chain looking to capitalize on Chipotle's woes is Moe's Southwest Grill. For the first time in three years, the Atlanta-based chain beat Chipotle in the Brand of the Year, Fast Casual Mexican Restaurant category on the consumer focused Harris Poll. Chipotle didn't crack the top four. 

The chain will be rolling out a national marketing campaign to highlight its "personality" and is working on an arsenal of new dishes at its Roswell, Ga. "innovation center."

Still, Moe's, with just 600 locations, trails behind Chipotle's 2,000 plus domestic outposts. 

So if GMOs don’t appear on your list of greatest concerns, enjoy your burrito. It’s on Chipotle.