Chipotle Mexican Grill, under fire for recent outbreaks of food-borne illnesses, is defending its model of using food from local suppliers.
Chipotle's share price dipped under $500 after the Centers for Disease Control and Prevention announced earlier in the week it is investigating another, more recent outbreak of a different strain of E. coli linked to the restaurant chain.
Recent safety concerns were a departure for the fast-casual dining darling that was known for its healthy fare. Chipotle was one of the top 10 most reputable brands earlier this year, in a report by the Reputation Institute, a global consulting firm that surveyed 27,000 people on 1,000 U.S. companies.
Experts now say the chain may have to rethink its famed local sourcing, which has become a double-edged sword for the company.
"They're trying to be a big chain acting small," Larry Light, former global chief marketing officer at McDonald's, said Tuesday on CNBC's "Closing Bell." "Given its size, it's got to become more like a typical fast-food chain. ... They cannot rely on personal relationships like a small restaurant, with small local suppliers. They're going to have start using bigger-scale, national suppliers."
Chipotle spokesman Chris Arnold said locally grown produce accounts for a relatively small percentage of Chipotle's produce, about 10 percent, as many of the chain's ingredients already come from larger regional or national suppliers. Arnold said there is no evidence the outbreaks were caused by a local supplier and, in fact, the geographic reach suggests that it probably is not.
"We think there will still be room in our system for local suppliers, and will work with them to help bring them in compliance with higher standards for testing and safety," Arnold said Tuesday by email to CNBC.