Written by Greg Henderson; Produced by Sara Brown; Photo by Wyatt Bechtel
Riding a crest of popularity in 2015, Chipotle Mexican Grill was a trendy lunch and dinner spot for many millennials. Touting its “Food With Integrity,” Chipotle’s profits had reached $445 million the year before on sales of $4.1 billion.
The first three quarters of 2015 brought more of the same, with revenue up more than 15% and profits up 25%. Then the crash came. In the fall of 2015 more than 500 people fell ill in several states after eating Salmonella- and E. coli-contaminated Chipotle burritos. The Centers for Disease Control and Prevention (CDC) found a critical lapse in the restaurant chain’s trace back system: once ingredients arrived in stores, all tracking stopped. Tomatoes and lettuce, for instance, came from many identifiable sources, but were mixed together during food prep.
In February 2016, the CDC concluded its investigation without tracking down exactly which food or ingredient was responsible, citing the problem of ingredients mixed at stores. For Chipotle, the outbreaks were expensive. The chain’s full-year 2016 revenue fell 13.3% to $3.9 billion, and profits dipped 95%, in part because of a PR campaign that gave away 6 million free burritos in an effort to win back consumer trust.
Critics said Chipotle’s failure to promptly resolve and explain the outbreaks, and to offer transparency to customers, deepened the foodborne crisis, and served as a warning to other food companies. In response, Chipotle implemented a new track-and-trace system that uses package bar codes to identify which supplier sent which item to which restaurant. Chipotle now says every ingredient is tracked “from seed to stomach.”
The Chipotle crisis should be a wakeup call. A national animal identification system is necessary, and many believe it’s not a matter of if a crisis hits the livestock industries, it’s a matter of when.
“Every week there are thousands of cattle sold at auction markets, and within 24 hours those cattle can be scattered a thousand miles from the auctions,” says Derrell Peel, Oklahoma State University agricultural economist. “A disease outbreak at one of those locations means it would take weeks to trace those cattle in an effort to contain the disease. That’s the shadow the livestock industry is living under [without animal ID].”
The livestock industry has always lived under that shadow, however, and the threat of a disease crisis such as foot-and-mouth disease (FMD) failed to budge those opposed to a national ID system. But America’s food system is rapidly changing, as Chipotle can attest, and containing a disease is just one of a list of reasons animal ID might soon become necessary.
JBS USA head cattle buyer Steve Williams, Greeley, Colo., sees three primary reasons for a national animal ID system.
“The first is our export markets,” he says. “Our export customers demand ID and a national system would make it so much easier to sell American beef. Disease containment is an obvious benefit, but our financial partners—bankers—would also like to see animal ID.”
All reasons have been mentioned in previous animal ID discussions, but the food system, and beef’s marketing channels, are changing. Amazon, the world’s largest data collection and management system, entered the beef business when it bought Whole Foods Markets for $13.7 billion in 2017. Traceability is a core component of its business model, and it’s unlikely it will make an exception for beef or other animal proteins.
“The lack of an animal ID system is hindering our market access and commerce,” says Derrell Peel, Oklahoma State University ag economist. “Virtually every other beef exporting country has an ID system in place.”
Uruguay, for instance, the tiny South American country with just 3.6 million people and 12 million cattle, provides a shining example of the benefits of animal ID. Since 2006, Uruguay has implemented one of the world’s most sophisticated supply chain tracking systems. Every calf born in Uruguay is electronically tagged, and every stakeholder in the beef value chain is obligated by law to abide by the system.
The Uruguayan tracking system follows every animal and every cut of beef from those animals—including hamburger—to the consumer. That means the movement of cattle through pastures and slaughterhouses is documented, creating transparency for established quality systems. It’s a primary reason Uruguay exports nearly 75% of its production and has become the largest exporter of beef to China, supplanting Australia.