Latest news with #SteveElls
Miami Herald
01-04-2025
- Business
- Miami Herald
Forget E. coli; Pests force fast-food chain to close 2,000 stores
Back in 2015 Chipotle had an E. Coli scandal that literally threatened to put the company out of business. In a single year, the company's stock dropped by 37% of its market value and the company's profits plumetted. Related: McDonald's menu adds new value combo "The fourth quarter of 2015 was the most challenging period in Chipotle's history," Chipotle CEO Steve Ells said in a statement at the time. So, you would have to assume that the Mexican chain had a widespread outbreak that impacted hundreds, maybe even thousands of stores, and that it handled that outbreak poorly. In reality, that was not the case. The Chipotle case involved 1,100 people getting sick over a three-year period between 2015 and 2018. When the various stores (about 60) had reported incidents of people being sick, they were closed for half a day immediately for a deep cleaning. Once it was clear the issue was not isolated, the company shut down the entire chain in order to conduct more training and enact new procedures. Don't miss the move: SIGN UP for TheStreet's FREE Daily newsletter Chipotle clearly took the issue seriously when it could have clearly argued that if you cook fresh food, sometimes people might get sick. The company owned the issue and took responsibility but still saw the incidents drag on its business for years. Now, another restaurant chain has reported some massive health and safety issues and has taken a bold step to address them. Many restaurants in Japan specialize in a single dish. They may literally just serve that dish, or they sell it in many variants. Gyudon is a very simple beef and onion dish served over rice after being simmered in a savory/sweet sauce that's often topped with an over easy egg. It's a Japanese staple that's served in the United States but has not crossed over like ramen noodle bowls or teriyaki dishes. Sukiya is Japan's leading Gyudon restaurant chain with approximately 2,000 outlets nationwide, according to the restaurant chain's website. "At Sukiya, we offer a wide selection of delicious and affordable dishes in various sizes. Enjoy our combo menus featuring miso soup and salad, along with a diverse range of rice bowls and side dishes. We are sure to satisfy your cravings," it shared, The chain has closed nearly all of its roughly 2,00 locations after customers complained of rat and bug parts in their meals. Sukiay's closures will last from March 31 through April 4. More Retail News: Iconic U.S. grocery chain debuts first UK store after a decadeTarget makes bold move to answer Walmart, AmazonForget McDonald's, Walmart adds a new restaurant partner It has never had to close so many locations at once. "The move comes after a customer complained on Friday of finding part of a cockroach in a take-out item bought in Tokyo. That followed another incident in January when a bowl of miso soup served at an outlet in Tottori Prefecture had a rat in it," NHK reported. Sukiya plans to use the closure period to implement new cleaning protocols. It also plans to add new pest control measures. Food contamination stories seem to impact companies in different ways. Chipotle was greatly harmed by its E. coli scandal because its marketing had been built around its fresh found and higher quality. It remains to be seen how Sukiya is impacted, as it's in the early days of its scandal. McDonald's (MCD) , however, recently went through its own E. Coli issues related to slivered onions in what CEO Chris Kempczinski called "a handful of U.S. states." He addressed the issue during the chain's third-quarter earnings call. "While the situation appears to be contained and though it didn't affect Q3 numbers, it's certainly an important development which I know is on many of your minds. For over 70 years, McDonald's commitment to food safety has been uncompromising. Nothing is more important to us than the safety of our customers, and we've been proud of our industry leadership in this area," he shared. Consumers have traditionally been more forgiving of traditional fast-food chains when these incidents occur. He explained how this one was handled. Related: Chipotle responds to bankruptcy, store closure reports After the CDC first informed us of the investigation, we were able to quickly link the cases identified to slivered onions from one facility at our Taylor Farm supplier. It was a swift response and Kempczinski made an effort to show that these incidents are very rare. "The last serious public health issue in the U.S. associated with McDonald's occurred more than 40 years ago. The recent spate of E. coli cases is deeply concerning, and hearing the reports of how this has impacted our customers has been wrenching for us," he added. The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
Forbes
31-03-2025
- Business
- Forbes
After 32 Years, Chipotle Founder Steve Ells Is Finally A Billionaire
Steve Ells opened the first Chipotle in a former ice cream shop near the University of Denver in 1993. Now, three decades and a fast-casual dining revolution later, he's the first-ever burrito billionaire. Forbes estimates that Ells—who was Chipotle's CEO until 2018 and its executive chairman until 2020—is worth $1 billion, making him one of 288 fresh faces on this year's World's Billionaires list, publishing Tuesday. He might be the unlikeliest of all. Last year, 130,000 Chipotle employees dished out $11.3 billion worth of chicken, steak and barbacoa across 3,700 global stores—enough to make Chipotle the third most valuable restaurant chain on the planet, with a market capitalization of $68 billion, behind only McDonald's and Starbucks. Yet Ells, 59, a classically trained chef more likely to discuss the 'provenance' of his ingredients than the profitability of his stores, made a few personal moves that seemed all but sure to keep him off the billionaires list. Beginning in 1998, he sold huge pieces of Chipotle to McDonald's in exchange for the fast-food chain's help expanding Chipotle from 16 locations to nearly 500. By the time the business went public in 2006, it was the Golden Arches, not founder and CEO Ells, that reaped most of the rewards. McDonald's owned 91% of Chipotle, which rocketed beyond a $1 billion valuation on its first day of trading; Ells owned less than 4%, a stake worth just $44 million at the time. Then he quickly began offloading what little stock he had, and kept selling even as the price shot through the roof over the next decade. By 2014, Chipotle shares were up 1,400% from the IPO, yet Ells had whittled his stake down to 1%, prompting Forbes to declare that Ells was not a billionaire—and 'may never be.' But Chipotle just kept on rolling, pushing past 1,000 locations in 2010, then 2,000 by 2016. Meanwhile, Ells got a big boost from Chipotle's compensation plan, which included an executive pay package granting him, and other execs, huge new batches of shares as the price of Chipotle stock rose. By the time Ells left the board in 2020, he had amassed an estimated $300 million (pretax) from all his sales and still owned around 1% of Chipotle's stock, worth about $170 million. Chipotle's stock price rising another 250% in the years since, and likely investment returns as markets surged, have pushed Ells onto the World's Billionaire list—more than three decades after he opened his first store, and despite his years of selling low then watching the stock price rise. Ells declined to comment on Forbes' calculations Not that Ells ever planned to get rich prepping burritos, bowls and salads for the masses. The son of a pharma executive, he was born in Indiana and grew up in Colorado, got an art history degree from the University of Colorado Boulder, then studied at the Culinary Institute of America before heading to San Francisco, where he served as sous chef at the landmark restaurant Stars. Inspired by the city's taquerias, he headed back to Denver with hopes of opening a taqueria of his own—but only to use the profits to finance his real dream: creating a fine dining restaurant. The first Chipotle opened its doors in 1993 with a strange name, a limited menu, a novel counter setup and high prices. In an era of 59-cent Taco Bell burritos, Ells charged more than $4. 'Customers would walk in, and poke their head in, and then turn and walk away,' he said onstage at a Wall Street Journal event last June. 'They didn't get it.' But Ells' fast-casual blend of quality food served at a fast-food pace caught on, and he soon ditched his fine dining aspirations, expanding to a second store in 1995 and a third in 1996. Store No. 1: A former Dolly Madison ice cream shop, Steve Ells opened the first Chipotle here, a few blocks from the University of Denver's campus, in 1993. "I remember the first couples day I was just looking, like, okay, when are the people coming in?" Ells once recalled. Ells had 16 locations by 1998, but needed a cash infusion to keep growing. 'We sent the business plan to 13 venture capital or investment banker-type companies that specialize in the restaurant business,' Ells' father, Bob Ells, told Bloomberg in a 2015 oral history of Chipotle. 'We got rejected by all 13.' McDonald's, then on an acquisition spree, decided to invest. Soon the fast food giant owned a majority of Chipotle, though Ells continued to run it and continued to insist on using fresh ingredients prepared on site. When McDonald's pivoted to focus on its core business just a few years later, it took Chipotle public in January 2006, and promptly sold off its entire 91% stake over the next nine months, when the business was worth around $2 billion. (That 91% would be worth $62 billion today.) Sales climbed from $823 million in 2006 to $4.5 billion in 2017 as Ells expanded the chain across the United States and into Canada and Europe. But, reeling from a series of foodborne illness outbreaks, he was replaced as CEO in 2018 by Brian Niccol, who led a turnaround that drove Chipotle stock to new heights. Ells stayed on as executive chairman until 2020, when he stepped down and left the board. A relatively private billionaire, he has purchased several Manhattan properties, including snagging a Greenwich Village townhouse for $30 million in 2021 and flipping it for a reported $5 million profit eight months later. Now he's trying to build the 'restaurant of the future.' Last year, he opened Kernel, a fast-casual, all-vegan concept using robots to help prep food. That menu flopped, so now he's switching to Counter Service, a sandwich concept with a storefront in Manhattan, hoping to find his next Chipotle. 'You've created big things from scratch—' the Wall Street Journal reporter interviewing Ells said onstage in July. Ells was quick to interject: 'I created big thing. We can see if we can go plural.'
