Chipotle pulls some jalapeños over Salmonella concerns

Chipotle Mexican Grill, the American chain of Mexican food restaurants, reported its best quarterly performance in years at the end of last month. However, a Salmonella outbreak associated with the jalapeño served at Chipotle marred the celebration. The bacteria spread across 27 states in recent days and has reignited the ghost of food safety that has haunted the chain for a decade.

In 2015, Chipotle had previously faced outbreaks of norovirus and E. coli, and it took two years for sales to return to normal. Now, with the contamination of the lettuce at Taco Bell also fresh in consumers' minds, the company faces a new reputational crisis. Chipotle's stock began to fall on Tuesday when the first news about the issue emerged, and it extended the losses on Wednesday as U.S. agencies linked the outbreak to the jalapeño served by Mexican food chains across the U.S. The stock fell 11% in the week and 21% over the past 12 months.

At least 300 people were infected and 30 hospitalized with the bacteria causing salmonellosis; more than 90% said they had eaten at Mexican food restaurants before falling ill. The infected jalapeño, produced in Mexico and distributed by Coast Citrus Distributors, began being pulled from the chain's stores as early as July 20, according to Barron's.

However, the damage was done. Chipotle's sales had already been impacted by the Taco Bell lettuce crisis last month, even without involvement in that case. Days later, the jalapeño crisis dealt another blow to the company, which had reported sales and earnings above consensus in the second quarter and raised its guidance for the year.

Despite this, some analysts expect the strong operational momentum of Chipotle to prevail in the long term, thanks to initiatives in menu innovation, reward programs, and the implementation of catering services. Chipotle's stock is valued at $43 billion on the stock exchange.