• Transform magazine
  • April 27, 2017

Top

Spicing up brand reputation

Chillis.jpg

US-based fast food chain Chipotle, which serves classic Mexican food and grill, is a firm favourite with taco-lovers across America, Canada and the UK.

Chipotle has built its brand on an uncompromising message of freshness, quality and openness, offering an alternative from the ready-made and manufactured feel of traditional fast food outlets. But a recent spate of E-coli outbreaks across the US, traced back to Chipotle restaurants, has caused widespread outrage and caused customers and investors to question the company’s integrity. Can the brand rebuild its reputation?

Indeed, according to the latest study from UK-based Reputation Dividend, reputation amounts to so much of a company’s investment potential that it can be divided into components. These are then ranked according to importance - the top three most important considerations are cited as ‘financial soundness’, an ability to ‘attract, develop and retain talent’, and ‘quality of leadership’.

Proof of successful corporate responsibility is also the most rapidly growing factor in generating investor trust and building business confidence. Perhaps unsurprising given the increasingly unstable global environmental and social climate, this concept alone generated a shareholder value of £53bn in the FTSE 350.

The report also shows how companies such as Unilever, already highly regarded for practising exemplary CSR, continue to lead the way in creating a more sustainable business future.

Sandra Macleod, Reputation Dividend director, says, “Looking ahead, with volatility set to continue, not least because of the forthcoming EU referendum, the winners over the next twelve months will be those companies that focus on the operational and messaging priorities which support continued confidence through turbulent times. Reputation may be intangible but it has a very tangible value. ”

Although the Reputation Dividend examined UK-based business, regional similarity in business models and Chipotle’s popularity with UK consumers means the fast-food chain would thus be wise to acknowledge these research findings.

The chain’s management have, however, implemented a rescue strategy, impacting the external brand through the closure of every US store today, in order to train staff in basic health and safety procedure.

With brand reputation reportedly contributing £720bn to the FTSE 350 for 2015-16, hopefully a new marketing strategy will rekindle the otherwise good reputation Chipotle had so far enjoyed among consumers and investors alike.