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Chipotle Proves Sustainable Food Sourcing Is Profitable

Food

By any measure, the Chipotle Mexican Grill chain of fast casual restaurants has been a huge success. Founded in 1993 with one restaurant in Denver, it now has nearly 1,800 outlets across the U.S., Canada and Europe, opening 192 new locations in 2014 alone. Its stock has been trending steadily upwards for the last decade, while more traditional fast food chains like McDonald's, a former investor in Chipotle which divested in 2006, have been experiencing sales drops.

The Chipotle chain is proving that using sustainable, humane food sources doesn't conflict with being profitable.
Photo credit: Shutterstock

At the same time, it has been more conspicuous than virtually any other major food chain in touting its sustainability efforts. It released a mission statement in 2001 called Food With Integrity (FWI), which launched its journey to using more organic produce, pasture-raised dairy, and hormone- and antibiotic-free meat raised humanely as well as sourcing more of its food from family farmers in the area where each restaurant is located.

In January, it demonstrated its commitment to the program when it removed pork from the menus of hundreds of its restaurants after an audit of its supply chain showed pigs raised in confined quarters. That's in violation of the statement on Chipotle's website that says, "There are farmers whose pigs are raised outside or in deeply bedded pens, are never given antibiotics and are fed a vegetarian diet. It's the way animals were raised before huge factory farms changed the industry. We call this style of farming and ranching naturally raised, and since 2001, Chipotle has sourced 100 percent of our pork from producers who follow these guidelines."

In its earnings call this week, chain founder and CEO Steve Ells said that although that decision could cost the company $2 million in sales, he did not believe it would hurt the company in the long run.

"Recently we’ve seen strong evidence that our commitment to sourcing sustainably raised ingredients is resonating with many consumers," said Ells. "In January we decided to spend one of our pork suppliers after a routine audit reveal that they were not following all of our animal welfare protocols. Choosing to suspend the supplier meant that we would not be able to supply carnitas to about one third of our restaurants. While we could have chosen to replace this supply with pork from conventionally raised pigs, we decided not to because most conventionally raised pigs are subjected to conditions that we find unacceptable. These conventional practices are unacceptable to us and we refuse to serve pork from animals raised in that manner."

"Since we made this decision, the majority of sentiment from our customers has been very supportive in the email and web comments along with social media posts," Ells continued. "Customers are applauding our commitment to our vision, thanking us for standing on principal, commending us for taking action against the inhumane treatment of animals and congratulating us for standing by our business values."

Chipotle makes no claim to being fully organic and humane in its food sourcing, but it has expanded its efforts over time.

"Organic is great, but it’s not always appropriate for the food we serve," the company says. "Sometimes we can find farmers who focus on responsible or sustainable practices but aren’t certified organic. We make that call market-by-market, ingredient-by-ingredient, always keeping the big picture in mind."

It points to its sourcing of a key Mexican food ingredient, beans.

"Currently, a portion of our beans is organically grown, which has a number of benefits including a reduction in chemical pesticide usage," according to the company's website. "We have been increasing our use of organically grown beans over the last few years and may use even more in the coming years."

In the earnings call, Ells also said that the chain had served 165 million pounds of responsibly raised meat in 2014, an increase of more than 20 percent over 2013. He promoted the chain's appeal to younger diners and said, "We believe that our popularity among these younger consumers is tied to our vision and the growing interest in issues related to food and how it is raised. Our own research shows that these issues are clearly becoming more relevant and important when customers choose where they will dine."

The company's commitment to organic produce and humane animal practices has to do both with providing better quality of food to consumers increasingly concerned with the source of what they eat, but also to protect the environment.

"Industrial ranching and factory farming produce tons of waste while depleting the soil of nutrients," says the company's Food With Integrity statement. "These seem like bad things to us. So we work hard to source our ingredients in ways that protect this little planet of ours."

That concern extends to recycling. The company also uses 100 percent recycled napkins, saying that that saves more than 2 million gallons of water annually. Its burrito bowls are made from 91 percent recycled materials and its aluminum lids are 95 percent recycled.

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Up to half of the detrimental impacts of the "landscape simplification" that monocropping entails come as a result of a diminished mix of ecosystem service-providing insects, a team of scientists reported Oct. 16 in the journal Science Advances.

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"Our study shows that biodiversity is essential to ensure the provision of ecosystem services and to maintain a high and stable agricultural production," Matteo Dainese, the study's lead author and a biologist at Eurac Research in Bolzano, Italy, said in a statement.

It stands to reason that, with declines in the sheer numbers of insects that ferry pollen from plant to plant and keep crop-eating pests under control, these services will wane as well. But until now, it hasn't been clear how monocultures affect the number and mix of these species or how crop yields might change as a result.

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In almost all of the studies they looked at, the team found that a more diverse pool of these species translated into more pollination and greater pest control. They also showed that simplified landscapes supported fewer species of service-providing insects, which ultimately led to lower crop yields.

The researchers also looked at a third measure of the makeup of insect populations — what they called "evenness." In natural ecosystems, a handful of dominant species with many more individuals typically live alongside a higher number of rarer species. The team found as landscapes became less diverse, dominant species numbers dwindled and rare species gained ground. This resulting, more equitable mix led to less pollination (though it didn't end up affecting pest control).

"Our study provides strong empirical support for the potential benefits of new pathways to sustainable agriculture that aim to reconcile the protection of biodiversity and the production of food for increasing human populations," Ingolf Steffan-Dewenter, one of the study's authors and an animal ecologist at the University of Würzburg in Germany, said in the statement.

The scientists figure that the richness of pollinator species explains around a third of the harmful impacts of less diverse landscapes, while the richness of pest-controlling species accounts for about half of the same measure. In their view, the results of their research point to the need to protect biodiversity on and around crops in an uncertain future.

"Under future conditions with ongoing global change and more frequent extreme climate events, the value of farmland biodiversity ensuring resilience against environmental disturbances will become even more important," Steffan-Dewenter said.

Reposted with permission from our media associate Mongabay.

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