In the wake of Chipotle's recent outbreaks of both E.coli and norovirus, Jim Cramer wanted to know how worried customers and investors should be.
At least 52 people were sickened after a multi-state E.coli outbreak was discovered to be linked to Chipotle. While health officials have not yet determined which ingredient caused the outbreak, the company has taken several measures to make Chipotle safer.
"We want to show all of our customers that the industry standards that we had been employing before — which are considered great standards — were not good enough. They were not good enough because something like this could happen," said founder and co-CEO Steve Ells.
"I will say though, that we can assure you today that there is no E. coli in Chipotle," Ells said. "We have thoroughly tested our food, we have thoroughly tested our surfaces and we are confident that Chipotle is a safe place to eat." He also confirmed that the company's new safety measures will put Chipotle well ahead of industry standards.
Since the saga began, Chipotle took responsibility for the issues, apologized and announced new industry-leading safety and food protocol to try to prevent a recurrence.
Looking at the stock, Cramer noted that Chipotle may have bottomed last week when it plunged down to $515 and did not dip any lower; the shares have climbed higher since.
Historically, health scares at restaurant chains can have a negative impact on both the stock and restaurant traffic for multiple quarters.
To find out of the company has been punished enough, Cramer spoke with Ells and co-CEO Monty Moran.
To implement a rigorous safety protocol, the executive said the company is working with a leading epidemiology team to develop new safety systems. Chipotle is widely known for its integrity in food selection and culture. Cramer asked the Chipotle leaders whether eating with integrity comes at the price of safety?
"We do not believe there is anything less safe about eating that way, and we believe that what we need to do now is put that same innovation that we put toward food with integrity and that we put toward our very special people culture — we've got to put that same kind of innovation into food safety now," Moran said.
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The CEOs assured Cramer that they have worked very hard to identify the source of the contamination, though it remains elusive. Both the company and the government have conducted thousands of tests on surfaces, ingredients and employees with no result.
However, the silver lining to such widespread testing is that Chipotle is now looking at every single raw ingredient that it has. This includes where it originates and is grown, and the path to landing in restaurants.