Part 5/8:
Chipotle’s history of food safety violations offers vital lessons. With the company being hit with the largest FDA fine for food safety violations—$25 million—it faced a downward spiral, reflected in its sales numbers plummeting as customers deserted its restaurants. The stock fell to a low of $5 per share in early 2018, down from its previous peak. Yet, this low point created an opportunity for savvy investors.
By late 2016, Chipotle undertook significant operational changes to prevent future outbreaks, including an overhaul of food safety protocols and an executive shake-up that brought in experienced leadership. These systemic changes helped re-establish customer trust, leading to a remarkable recovery that saw the stock exceed its pre-outbreak highs within 18 months.