How Suppliers Impact the Brand

By: Travis Terrill

In regards to trends of eating healthy in today’s society, it almost seems odd if the word “natural” or “free range” is not positioned right in front of the type of meat that is being bought or eaten. The trend some cattle farmers are supporting is raising the animals we consume to live a natural life free of many substances that used to be given to livestock. Although, this industry is still facing a great deal of resistance because of the hassle and risk of converting their farm to organic or natural.

Is the difficulty of holding a “natural” or “antibiotic free” label on the package of meat really worth it? Some companies are facing this decision the hard way because of a simple fact, production. Although the organic beef market has risen 324.1% and the natural beef has risen 38.9% in retail sales of beef in the United States from 2011-2014 combined both categories only total $0.9 billion dollars. While the whole beef industry for the United States consists of $23.6 billion dollars. This market is still very difficult to regulate as is buying from a reliable, valid organic source.

With products having a label as “organic grass-fed beef” it is understood that on average this type of cattle takes 20-24 months to reach maturity, while conventional cattle takes 16-18 months. When looking at these numbers it might not seem like an immense variance but it is a massive difference when it comes to disease. Having an antibiotic free animal live 4-6 months longer makes the risk of infection extremely high and the potential risk of losing the whole herd in increased as well. American farmers see the high risk of farming in this way and to most it is not worth the audits, paperwork, animal-welfare, and many other hassles of raising product organically or naturally.

In recent news, Chipotle Mexican Grill has received a vast amount of negative publicity against their “non-GMO” meat. What was Chipotle’s answer for these accusations? Outsourcing to Australia was Chipotle’s response because there is not enough quality supply in the United States. Having Chipotle making a commitment to be a non-GMO restaurant creates a massive amount of risks. If growth continues Chipotle will have to continue to find viable suppliers or invest in their own ranches that they manage to be organic.

Country Natural is a beef producer that relies on countless other cattle ranches to join their distribution company for organic raised beef. Country Natural relies on at least eighty co-owners for cattle production as well as recruiting other cattle farmers. Managing one company is a difficult task in itself, but to take the task of managing eighty farms and have the risk of an audit not meet the high standards that are set to maintain an organic beef product is extremely difficult.

While managing this many cattle ranches under one distribution company it is very easy to see where there could be an issue with quality assurance. Chipotle’s new position to obtain most of their meat products from Australia potentially could cause assumptions that there is no trust in the product lines of the United States. There are no excuses for the accusations of Chipotle and for them not having the correct type of meat that was marketed. But the low number of organic ranches does make it harder to maintain a consistent quality product. Having a slight miscue with supply of their product can taint their brand image and might risk them never getting the natural non-GMO image of their company back from society.

Source: “Beef’s Meaty Profits Slow Effort to Boost Antibiotic-Free Production,” The Wall Street Journal.

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4 thoughts on “How Suppliers Impact the Brand

  1. Ashleigh Sargent November 7, 2015 / 8:20 pm

    I thought about your blog post when while while reading about the E. coli outbreak on the West coast attributed to Chipotle. Chipotle already has a really interesting balance of promoting non-GMO, natural foods and providing “fast-food like” services for customers. For a company that claims to track where ingredients originate, the latest issues are going to pose significant marketing problems. The E. coli outbreak is currently being attributed to vegetables and fresher ingredients offered, rather than to Chipotle meat. I am interested to see how Chipotle responds to this outbreak in future campaigns, and I wonder if issues with vegetables will be handled differently than meat. Cases like these clearly demonstrate the valid reason for consumer distrust in the food industry and show the challenge for brands in the food industry to maintain their standards in a competitive market. http://www.usnews.com/news/science/news/articles/2015/11/03/dna-hunt-on-as-chipotle-linked-e-coli-outbreak-grows-to-37

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  2. Matthew E. Dulac December 3, 2015 / 9:53 pm

    Even though I think it is concerning that Chipotle sources their meat outside the United States, I also understand that Chipotle has grown substantially in a short period of time and it doesn’t appear that this growth is going to stop any time soon. If there isn’t enough meat in the United States, it is imperative that they find meat that can be raised in a similar manner and this is what Chipotle was able to find. Even though their meat may be from Australia, it is still going off their principles of being non-GMO and this is the only thing that should matter to their customers. As the prices rise at Chipotle and restaurants like Panera, this is what is concerning to the consumers. The quality of the food remains the same, the quality of the service remains the same, and these are the two most significant parts of the business and they remain unchanged. It is just contingent on whether Chipotle can continue to provide the same results and quality given the growth and this should be their chief concern today.

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  3. Patrick Coskren December 5, 2015 / 11:26 pm

    I found this article to be very interesting due to the latest headlines regarding Chipotle, as discussed in this post. The article analyzes if “natural” or “antibiotic free” meat is really worth the seeming hassle that it takes to raise the cattle. In today’s society one thing that is blooming is lifestyle changes and healthy diets to lose weight. All I seem to see and hear about lately are Beach Body challenges, Advocare, and eating paleo. This lifestyle of eating these “natural” and “antibiotic free” meats and foods are growing rapidly. It is surprising to me that both of these categories only gross $0.9 billion dollars. But I believe with the growth and spread of these new lifestyle and diet changes, the demand for this style of beef will increase. Chipotle is on to something using their “non-GMO” meat; and their numbers and growth support this decision. Travis did a good job tying the article to a current topic, while providing some solutions as well as thought provoking statements.

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  4. Bharat Mahajan December 7, 2015 / 8:52 pm

    Chipotle is not the first fast food chain that had trouble with its vendors. In the past we have seen Taco Bell, McDonalds and KFC go through similar problem. However it did not hurt them as much as it did to Chipotle. The reason? For Chipotle ‘Healthy Food’ was core to its brand. And to maintain its brand image Chipotle had no option but to move to Australia. In the future as the demand for organic food continue to increase, I expect organic food to eventually becoming a norm.

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