With all the hubbub surrounding a new marketing campaign by Chipotle restaurants, Missouri Farm Bureau President Blake Hurst opines in the latest American Farm Bureau Focus on Agriculture column that Chipotle may be missing the point – just how different is their business model from that of today's farms?
Here's his take:
Chipotle, At It Again
by Blake Hurst
Fast-casual restaurant chain Chipotle is at it again, posting a new Web ad contrasting the dangers of industrial farming with the moral beacon that is Chipotle. It showcases beautiful video, haunting music, a barren landscape scarred by industrial farming and a scarecrow as the hero.
In many ways family farms in the Midwest are the industrial farms that serve as the evil foil in Chipotle's marketing campaign. Many of today's misguided food writers would no doubt agree. Here's how one recently described a farm that is large but "not necessarily" evil: "Unlike many Midwestern farm operations, which grow corn and soy exclusively, here are diversity, crop rotation, cover crops and, for the most part, real food—not crops destined for junk food, animal feed or biofuel. That's a good start."
Most farms in the Midwest hit every checkpoint on the way to evil according to that definition. Corn, soybeans, genetically modified seed, pesticides, commercial fertilizer, cows and pigs eating what they produce…and some of their corn likely goes to an alcohol plant! They're so industrial that they are beyond redemption.
On the other hand, most are family farms, using no hired labor. The largest Midwestern farm is about 1,000 times smaller than Chipotle. If size matters, and all Chipotle videos make it clear that it must, Midwestern farms are small businesses.
In the latest video, the evil industrial food firm is called Crow Foods, Incorporated. It's not clear what constitutes a large enough company to achieve "crow" status, but surely Chipotle's corporate sales of $3 billion come close. Even the largest of Midwestern farms will have gross annual sales comparable to only one of Chipotle's 1,430 locations. And any of those farms would be pretty darned happy to equal Chipotle's operating margins of 30 percent.
As for the whole diversity thing, admittedly, most Midwestern farms aren't very diverse.
Although most farmers used to raise pigs and cattle, many have decided to concentrate on crop farming while other farms raise livestock. To put it in terms even a scarecrow might understand, they've decided to specialize in what they do really well. It's like a restaurant concentrating on selling burritos and beans instead of offering a full menu. The owners of such a restaurant chain probably would consider it to be more efficient because it didn't offer dozens of menu items. Restaurants used to offer more items, but many today have adopted what one might call an industrial model, preparing only one kind of food really well.
Chipotle often posts signs letting customers know that the "proper" kind of pork or beef is temporarily unavailable. Why are these signs necessary? Conventional grocery stores never have empty meat counters. Shortages only occur when the market price won't cover the farmers' costs of production or the price offered by Chipotle is less than competitors are paying. The Chipotle video implies that conventional farmers won't change because they're somehow morally deficient or suppliers force them into the wrong production practices or they just lack imagination. Nothing could be further from the truth. If Chipotle would raise the prices paid to family farmers, the meat promised to customers will become available. Pay farmers enough, and they'll probably wear scarecrow costumes to deliver meat to Chipotle's stores.
According to Bloomberg News, in the last year, Chipotle has dropped from using 100 percent "naturally" raised beef to only 85 percent. There is a very simple solution. Pay more.
Instead of spending millions on ad agencies and marketing campaigns damning conventional farms, Chipotle might better spend that money increasing the prices paid to farmers. Even scarecrows respond to incentives. Only 30 percent of Chipotle revenue goes to buy food that is sold. Increase that percentage and Chipotle would be able to operate with the kind of "integrity" it urges on the rest of the food industry.
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