Food Business News - March 22, 2016 - (Page 10)

Chipotle continues to struggle Continued from Page 1 Security. He also served as the associate director of the Biosecurity Research Institute at the university. The Centers for Disease Control and Prevention in 2015 linked food safety outbreaks that affected dozens of people to Chipotle. The C.D.C. on Feb. 1 of this year said the outbreaks appeared to be over, but Chipotle's sales figures are still ailing. Comparable store sales declined 22% in the week ended March 7, according to the March 15 S.E.C. filing. "We are pleased to show that over the past six months our sales have begun an upward trend, and we're beginning to recover lost sales since the C.D.C. completed its investigation and we began actively inviting consumers back into the restaurants," said Steve Ells, chairman and co-chief executive officer of Chipotle, at the Bank of America Merrill Lynch Consumer & Retail Tech Conference on March 16 in New York. Comparable store sales, however, fell 27% in the second week of March after news broke that Chipotle closed one Boston restaurant for one day. The closing came after some Chipotle workers, but not customers, became ill. "We are proud of what our teams did in Boston," said Jack Hartung, chief financial officer. "We are proud that they didn't work while sick. We're proud that the teams reacted quickly. We're proud that no customers were affected during this time, and so, our protocols are working. "Unfortunately, the press got a hold of it, and it did have an impact, but we are already seeing the recovery, and so even though this shows that we took a step backwards, we are already in the last day or two seeing that the sales are recovering." In relation to the first-quarter loss, Denver-based Chipotle expects increased spending in marketing and promotions in the first half of 2016, according to the S.E.C. filing. The chain also expects higher food costs because of additional food safety protocols. "Our earnings and margins are not going to be very impressive in the short term," Mr. Hartung said. "It is worse than I thought. There aren't new costs that crept in, just the costs that we knew were going to creep in and have a dampening effect on our margins and our earnings were higher than I thought." Chipotle said its free burrito offers via mobile and direct mail have been successful so far. Mark Crumpacker, chief creative and development officer, said redemption rates were 67% for the mobile offers. He expects the mail offers to have redemption rates between 20% and 30%. Mr. Crumpacker also addressed a question about how a cause for the 2015 food safety outbreaks was never found. "We have many more fresh ingredients than a typical fastfood restaurant, and so there are potentially a lot of sources for such an incident," he said. The restaurant chain worked with the C.D.C., epidemiologists, food safety experts and local health departments, he said. "We think we have a pretty good idea (about what caused the outbreak)," Mr. Crumpacker said, but Chipotle was not definite enough to disclose the reason. FBN General Mills invests in organic cottage cheese maker LOS ANGELES - Good Culture, which offers organic sweet and savory cottage cheese varieties, has closed on a $2.1 million strategic financing round. Lead investors are CAVU venture partners and 301 Inc., which is a business development and venture unit of General Mills, Inc. 10 FOODBUSINESS NEWS ® "We are so excited to partner with CAVU and General Mills and look forward to making Good Culture a household name," said Jesse Merrill, co-founder and chief executive officer of Good Culture, Irvine, Calif. "Cottage cheese needs a comeback, and Good Culture is now well-poised to make that a reality." The company offers such varieties as strawberry chia, blueberry acai chia, sun-dried tomato, kalamata olive and classic in 5.3-oz fully recyclable packs. The company does not use gums or thickeners in the cottage cheese, which is not only organic but also grass-fed and free of stabilizers and additives. The products are sold nationally in such retail outlets as Whole Foods Market and Sprouts Farmers Market. "We are thrilled to partner with Good Culture," said John Haugen, vice-president and general manager of 301 Inc. "Their mission and vision, coupled with General Mills' extensive resources, will give Good Culture tremendous opportunity to grow this remarkable, on-trend offering to meet the increasing consumer interest in nutrient-dense, high protein snacks." FBN March 22, 2016

Table of Contents for the Digital Edition of Food Business News - March 22, 2016

Food Business News - March 22, 2016
Chipotle continues to struggle
G.M.O. labeling: Back to the drawing board?
Dairy Business News - Picking the right fruits, nuts and seeds
Table of Contents
Web Contents
Editorial - Food industry faces challenges as obesity rate rises
General Mills invests in organic cottage cheese maker
Natural Products Expo West - When big companies buy small brands
Alexia Foods homes in on hot potato trends
What’s popping at Angie’s Boomchickapop
Four trends driving growth in organic
Kraft Heinz impressing investors
Wal-Mart revamping fresh food strategy
Target focused on the fundamentals of fresh
Science, safety and seaweed
Market Insight - Wheat, corn, soybeans: Which one will lead?
Flavor Trends - Beyond sriracha
Ingredient Innovations - Reducing the ‘ates’ in meat applications
New Food Products
Ingredient Market Trends - Millers forecast soft red winter wheat crop at 362 million bus
Ingredient Markets
Supplier Innovations and News
Ad Index
Food Business in the News

Food Business News - March 22, 2016