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Chipotle Cultivates a Homegrown Advantage

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In a move as smart and spicy as its signature burritos, Chipotle Mexican Grill (NYSE: CMG  ) (NYSE: CMG-B  ) is promoting a new documentary about the way our food is produced -- and playing up its own use of organic ingredients in the process.

The burrito chain started sponsoring free screenings of Food Inc. this past week in 32 U.S. cities. It's also been putting promotional materials in all its restaurants to spread the word.

Food Inc. exposes many disturbing practices in American food production, including the workings of industrialized farms and the influence huge agribusiness companies wield on regulatory policy. The film also features well-known voices in food ethics, such as The Omnivore's Dilemma author Michael Pollan and Fast Food Nation's Eric Schlosser.

Given some of the research I've done on agricultural monolith Monsanto (NYSE: MON  ) , I'm not exactly shocked that the company isn't joining Chipotle in sponsoring this film. In another complete non-surprise, Monsanto has responded on its website that "Food Inc. is a one-sided, biased film" that is "counter-productive to the serious dialogue surrounding the critical topic of our nation's food supply."

Know your burrito
Chipotle's move may seem a bit ironic -- last time I checked, it, too, was a corporation -- but the sponsorship is actually quite shrewd. Chipotle's mission includes a "Food with Integrity" vow; the chain consistently works to add organic, naturally raised meat and locally produced ingredients to its menu. But Chipotle recently admitted that most customers aren't even aware of these efforts. Promoting Food Inc. should help Chipotle emphasize its own role in what many consider a more responsible, natural, and environmentally sustainable way of eating.

Chipotle isn't alone in promoting healthy, organic eating. Whole Foods Market has long embraced such trends in sustainable food production (and consumption), and it could stand to benefit if Food Inc.'s audiences leave the theater hungry for more organic fare. So could Wal-Mart Stores (NYSE: WMT  ) , which has embarked on many environmental initiatives and even talked up gaining local farmers as suppliers last summer.

Unfortunately, there's a chance that Chipotle's efforts to promote Food Inc. could give the company a bit of indigestion. Chipotle's been receiving broadsides from many critics, including Schlosser, regarding its compensation practices for Florida's tomato-farm workers, even though it gets credit in the film for its sustainable meat buying. Giving the film such prominent promotion could call attention to the chain's own alleged failings.

Despite the controversy, though, the move should increase Chipotle's goodwill, while helping to emphasize one of its clearest differences from fast-food rivals such as Yum! Brands' (NYSE: YUM  ) Taco Bell, McDonald's (NYSE: MCD  ) , and Burger King (NYSE: BKC  ) . Let's just hope that if the company supports any similar efforts in the future, it'll first make sure it's truly ready for its close-up.

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Chipotle Mexican Grill has been recommended by Motley Fool Rule Breakers and Motley Fool Hidden Gems. Whole Foods Market is a Stock Advisor selection. Wal-Mart is an Inside Value pick. The Fool owns shares of Chipotle. Try any of our Foolish newsletter services free for 30 days.

Alyce Lomax owns shares of Whole Foods Market. The Fool's disclosure policy comes with a side of guacamole.

Read/Post Comments (4) | Recommend This Article (11)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 20, 2009, at 3:16 PM, Hermrc wrote:

    Should organic foods carry a label listing what animal manure was used for fertilizer if any? For instance, some people might like to know if pig manure was used.

  • Report this Comment On July 20, 2009, at 3:20 PM, robstuck wrote:

    Chipotle is gross. i prefer moe's, willie's, or qdoba.

  • Report this Comment On July 20, 2009, at 3:42 PM, bshater wrote:

    Good article. Saves me the time of trying another chain focused on marketing hype rather than tasty food or common sense.

  • Report this Comment On July 20, 2009, at 10:36 PM, JoeConsumer1 wrote:

    Too bad this isn't much more than a hollow, hypocritical marketing ploy. Naturally-raised beef is great, but it doesn't trump human rights. Chipotle, when will the contradiction end?:

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