Author:
Wayne Hsiung
Published on
January 22, 2014

Transforming Strength into Weakness





DailyFinance and the Motley Fool are two of the hottest sites in the investing community. And both point out the single most important factor that has allowed Chipotle to rise over all the other chains: product differentiation. 

This is an industry term for "what makes us stand out from the crowd." And what makes Chipotle stand out? Well, as the financial press indicates, its feel-good motto. 

Chipotle's "food with integrity" mantra has been a consistent theme throughout Chipotle's history of rapid growth. This mission to source ingredients in a way that is friendly to animals, farmers, and the environment has resonated with customers... 


Every time someone walks into a Chipotle, in short, they feel the "warm glow" of an ethical company. Indeed, in its Hollywood quality animated shorts, the company goes out of its way to show happy animals in sunlit fields. (Absurdly, it even shows a Chipotle employee -- chef's hat and all -- liberating pigs into green forests... but conveniently fails to point out that that that same employee will someday violently attack the pig.) 

What appears to be a strength, however, can rapidly turn into a weakness. If we can convince the public and press that there is a more insidious storyline here, that Chipotle's true motto should be, not Food with Integrity, but Food with Violence, then Chipotle's product differentiation strategy will suddenly collapse like a house of cards. Customers who have been paying $8 for a burrito will realize they have wasted their money. And many who shop at Chipotle, thinking that they are "friendly to animals" will be forced to confront the harsher truth: that Chipotle, far from being a loving and ethical company, is one of the largest animal abusers in the world. Chipotle's strength will transform into a weakness. 

The benefits of such a transition are not just limited to a single company, however. Where Chipotle goes, others follow. Companies that hope to take advantage of the exploding market for ethical foods will wade far more carefully. (Those who believe vegan options or welfare reforms are important should feel excited about this campaign, as it is perhaps the best way to see those incremental changes grow and sustain themselves.)  And a fervent public dialogue on "humane slaughter" will force countless unthinking but well-meaning consumers, who otherwise could be easily mollified into humane consumerism, into a more profound questioning of their worldview. Is killing gentle animals ever ok? (No.) What's the difference between a company like Chipotle and a monster such as dog fighter Michael Vick? (Absolutely nothing, except that Chipotle tortures and kills a few million more victims.) And perhaps, most importantly, can I be content as a humane consumer, or, if I want to be a "good person," do I have to do a bit more -- maybe a lot more -- than eat $8 burritos? (Resoundingly, yes.) 

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