Is Chipotle Cultivating a Better World?

There’s no doubt about it. Chipotle is primarily targeting millennials. And it is doing so with non-traditional marketing.


Mark Crumpacker: Brand Genius

When Crumpacker (Chief Marketing Officer, Chipotle) released Back to the Start to YouTube in 2011, he never anticipated the reaction: 8.7 million views. “We didn’t think it would be quite the sensation that it was,” he stated. “It was a film. It didn’t have any promotional element built into it.”

Propelled by this success, Crumpacker created a second YouTube video, The Scarecrow, renowned for its message: “Cultivate a Better World.”

For those of you who missed The Scarecrow (view here!), the video begins with mournful music and a saddened scarecrow walking through a smoke-spewing factory named Crow Foods, Inc. The scarecrow observes a robotic crow inject and massively inflate a chicken, a cow tremble inside of a metal cage, and a machine stamp “100% Beef-ish” labels on boxes. The depressed scarecrow returns home to his farm. All of a sudden he sees a red pepper. The lighting brightens. The music turns joyful. The scarecrow harvests the vegetables, opens a burrito stand (but of course!), and a banner drops reading: “Cultivate a Better World.”

YouTube viewers flocked. Today, The Scarecrow has 13.82 million hits.

But not everyone was impressed with The Scarecrow. In fact, some had the exact opposite reaction. “Funny or Die” released a parody on Youtube called Honest Scarecrow (view here!) which essentially accused Chipotle for being an evil corporation and manipulating the consumer mind.

That’s not all. Agricultural producers from around the world responded furiously, contending that Chipotle hyped deceptive representations of traditional agriculture. Moreover, that no farmer would ever keep a cow in a metal cage or inject a chicken with green slime.

“We’ve never professed to being perfect. The commitment we’ve made is to constant improvement. The film is clearly a fictitious portrayal…meant to highlight issues like the overuse of antibiotics, harsh confinement of animals, and the extent to which food is processed.” – Chris Arnold, Communications Director, Chipotle

Yet, despite the naysayers, Chipotle sales have more than doubled in the past four years, hitting $3.21 billion in 2013 and rounding out 2014 with an estimated $4.11 billion.

What is Chipotle actually doing to Cultivate a Better World?

Introducing Food With Integrity.

Food With Integrity is our commitment to always look closer, dig deeper, and work harder to ensure that our actions are making things better, not worse. It’s our promise to run our business in a way that doesn’t exploit animals, people or the environment. It is the philosophy that guides every decision we make at Chipotle.” – Steve Ells, Founder and CEO, Chipotle

Efforts include:

  • Purchasing “naturally-raised” pigs and chickens (those which are raised outside or in bedded pens, never given antibiotics, and are fed a vegetarian diet).
  • Sourcing beef from ranches that “meet or exceed our naturally raised standards”.
  • Seeking to increase the use of organically grown beans.
  • Purchasing dairy from pasture-raised cows (cows which have daily access to outdoor pastures, are never given added hormones, and are fed a vegetarian diet).
  • Committing to empower, educate, and train employees from all over the world in attempts to increase cultural sensitivity and communication.

In February of 2014, Crumpacker was back at it. Chipotle released yet another video effort: “Farmed and Dangerous”, a dark comedy about – you guessed it – the evils of industrial agriculture.

But in May of last year, Chipotle shareholders demanded more.

Proposal: “Shareholders request Chipotle issue an annual sustainability report describing the company’s short and long-term responses to ESG-related issues. The report should include objective quantitative indicators and goals relating to each issue where feasible, be prepared at a reasonable cost, omit proprietary information, and be made available to shareholders by October 2014.”

Chris Arnold stated in an email: We have never done formal sustainability reporting quite simply because we have finite resources. We’d rather invest those resources in doing things that actually drive change, then in talking about that change.” 

Quite the excuse. Why not do both?

On May 15th, the proposal received a 31.3% vote.

My first reaction was disappointment. Why didn’t more shareholders demand transparency!? My second reaction was optimism. Might Chipotle have recognized the importance of transparency and reported anyway? Surfing the web resulted in zilch. Perhaps I missed it. I emailed Chipotle Investor Relations, just to be sure.

The Sustainable Investor: “Did Chipotle issue a sustainable report as of October 2014? If so, where might that be available? Thanks.”

Investor Relations: “Thank you for the email. Chipotle did not issue a sustainability report this fall.”

So there you have it.

We live in a world where the most meaningful ESG Vigilante may very well be the shareholder.

A note to shareholders: Get Louder.

Categories Company Case Studies, ESG Vigilantes

11 thoughts on “Is Chipotle Cultivating a Better World?

  1. Shame on investors for not demanding more – why would investors turn down the opportunity for better disclosure? And shame on Chipotle. 30 percent is a decent amount of shareholders. Why hide behind the 50% rule?

    Disappointed.. Chipotle….


  2. As a shareholder to Chipotle, I don’t want the company spending money to tell us what we already know. Chipotle has already disclosed what percent of their chicken and beef is from “organic sources.” It is not one-hundred percent, and so the press might start writing negative articles and depress the value of the stock. With all due respect, Jason, are you actually a shareholder?


  3. I am not a current shareholder, but how do Inknow whether I want to be a shareholder without the proper disclosure? Over 50 percent of the SP500 has some sort of sustainable reporting. What are they trying to hide? that presumption of something being hidden might be weighing on the stock!


  4. Given the multiple, I am guessing little is weighing on the stock. The company releases what they and the accountants believe to be material. What you are asking for is not material – by definition that means it won’t move the stock. Disclosure and shareholder requests are a slippery slope. They will never end, increasing the company’s costs and reducing its value. But, I suppose we need to agree to disagree. I subscribe to this site because I am focused on sustainable companies. Truth be told, I prefer less disclosure, as then the market is less efficient.


    1. Hi Kent – thanks for reading! This is an interesting point you bring up regarding materiality. Accounting standards of the likes of GAAP and IFRS were formed when the materiality of a company was thought to be defined by financial statement line items: assets, debt, etc.

      In my opinion, in today’s economy, non-financial risks and opportunities are material to a company’s ability to create long-term value. As such, I would have to disagree with your assertion that sustainability reporting is not material. That being said, I fully agree that disclosure and shareholder requests are a “slippery slope”!

      It just goes to show you can’t please everyone. I guess the question becomes who’s most important to please? Further, is a company willing to sacrifice some of this widespread pleasing to “do the right thing”?


  5. Agreed on the need to do research. Nice talking with you. Jason.


  6. Ideally there soon will be a standardized ESG reporting structure for publicly traded companies. The Sustainability Accounting Standards Board (SASB) is working towards this end, with the SEC involved from the early days. Any chance TSI will post about the sustainability reporting structures (SASB, GRI, CDP, etc)?Also the Chipotle’s of the world (companies emphasizing their sustainability but not issuing a sustainability report) (are there many?) would probably change their tune if the SRI investment fund companies (Trillium, Domini, etc.) decided to only invest in those companies that do report.

    Liked by 1 person

    1. I am 100% on your page greensportsblog. Mandatory sustainability reporting is the necessary fire to ignite change. In fact, TheSustainableInvestor wrote a post last June, contending just that:

      In the above post, I touch on the GRI, the IIRC, and the SASB. The efforts of the SASB are highly commendable, I have been following them closely. My main assertion is this: if companies are forced to adhere to a higher level of transparency, it is reasonable to assume consumption and investment decisions would alter. But to your point, TSI is due for an update on the reporting structures. Coming your way shortly!

      To your second point, I need to do a bit more research on how many Chipotle’s of the world are reporting on sustainable efforts, but my initial observation is that it is mixed. And the companies that are reporting are doing so differently. The major impediment lies in defining some of these efforts. For example, if you recall in my post re- McDonald’s quest for sustainable beef, the guidelines for sustainable beef are tremendously vague. Defining “sustainable”, especially when it comes to food, is a tricky task. For starters, the vastly different geographies and cultures of the world complicate things quite a bit.

      Now, assuming you are using the term “SRI” to refer to SRI, ESG, and impact investing (all slightly different, view my category “ESG Investing” ! ), most SRI/ESG/impact funds today (the good ones at least) identify a set of viable investments FIRST, and then apply an impact lens to this set of viable investments, seeking those investments that result in the largest positive impact. It is important to note the impact lens is applied second. If the SRI investment funds only invested in the companies that reported, I am not sure the causation would be that large. This is because SRI fund investment in Chipotle is plausibly very small relative to investment from non-SRI investors. Unfortunately, investing responsibly is still a very small subset of the overall investment landscape.

      Thanks, as always, for following along!


  7. How far along is the SASB in setting standards? Is this a near term event? Are companies adopting the format?


  8. SASB could become a “safe harbor” for companies. The disclosure requirements are not too severe. If a company complies with SASB and subsequently gets sued for non-disclosure of something that supposedly should have been disclosed but was not covered by the SASB, then the company can hide behind their SASB shield. Law firms may begin to recommend to their clients that a SASB filing can help their lawsuit defenses in the future. Maybe just wishful thinking….


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