At a time when the US beef market is struggling with declining volumes and consumers are starting to care increasingly about ethics, sustainability, animal welfare and nutrition, differentiation offers a way forward for beef producers. The emergence of grass-fed beef is a clear manifestation of this trend. However, before grass-fed has any chance of becoming a mainstream choice, several hurdles need to be overcome. Sourcing is one of them, as illustrated by the current supply troubles experienced by rapidly growing fast food chain Chipotle Mexican Grill.
Chipotle Leads the Way
Chipotle Mexican Grill has been in the news again this spring, not only for defending its drive to exclusively offer grass-fed beef in all of its restaurants but also for deciding to source this product from the distant shores of Australia. According to Chipotle founder Steve Ells, due to the number of its outlets having mushroomed from 800 back in 2008 to the current 1,600, domestic supplies were no longer sufficient.
In line with the company’s much publicised “food with integrity” philosophy, it is committed to serving “responsibly raised” beef, free from hormones and antibiotics and raised with high animal welfare standards. And the strategy seems to be working so far. Our consumer foodservice data show that Chipotle’s sales rose from US$1.3 billion in 2008 to US$3.2 billion in 2013, enabling it to jump from 35th to 17th in the chained consumer foodservice rankings over that period. However, by sourcing its beef from abroad, it may be committing a serious faux pas, a point which we shall return to shortly.