Roughly a year ago, Chipotle’s biggest problem was parents objecting to its cups. Revenues were rising, new restaurants were opening at a breakneck pace, and the burrito chain was on its way to fast food dominance. Then the first reports of food poisoning hit, and spread like wildfire. A year later, the company is still hurting.
Now Soylent is facing the same problem — as a combo of social media call outs and our increasing awareness of food safety issues smash into brands like a freight train. Looking at Chipotle proves particularly instructive about the damage this can do. It’s attempting to get into burgers as it struggles with a sinking stock price and a wolf, in the form of activist investor William Ackman, at the door out to change, and possibly disassemble, the whole company. And Soylent’s problems might be even worse.
Soylent sells “food replacement” items, powders, drinks, and protein bars that are intended to offer a quick meal; think Slim-Fast for nerds. In theory, one serving of Soylent has all the fat, carbohydrates and other nutrients needed in a quick, convenient package. Soylent is largely a niche product aimed at Silicon Valley coders, and has been subject to both admiration and scorn thanks to its oddly confrontational messaging (it announces it’s “proudly made with GMOs”), deliberately generic packaging, and unconventional CEO. But the product has proven popular among the time-crunched and those that have little interest in food beyond nutrition.
Lately, however, the company has been plagued by reports of diarrhea, vomiting, and other issues. The problems started with its recently launched “food bar” product, with dozens of users reporting severe stomach problems. The issue has spread quickly, with Soylent’s flagship product, a meal replacement powder, now also causing illness.
Not helping matters is the fact that Soylent can’t seem to figure out which ingredient is the culprit. It claims to have tested its facilities and come back clean, and that as far as it can tell, the issue is with one of a handful of ingredients, which the company is removing in a new formulation it hopes to launch in a few months. But the problem may be unstoppable already, as Soylent’s niche audience consists almost entirely of people heavily plugged in and extremely vocal about their concerns (sometimes with winning puns).
Food companies can recover from scandal, if they’re big enough and work hard enough. Few remember Jack In The Box’s 1993 food poisoning catastrophe, which killed four children and permanently injured 178 others, thrusting E. Coli into the public consciousness. But more and more, one scandal is all it takes to sink any company, and food companies in particular face a vicious spiral of negative social media posts, followed by negative news coverage, each feeding off the other. Sweeping stories under the rug doesn’t work in the internet era.
The interplay between tech, food, and upset users has been a big conversation late. The entire restaurant industry seems to be at war with Yelp and its userbase over unfair reviews and entitled service, with the widely held belief that bad Yelp reviews can drive a restaurant out of business. Local restaurants, and niche food companies, in particular, are even more vulnerable because their audience is only so large, and once negative word gets out, it can be impossible to dislodge. Being Googleable for the wrong things is hard to shake. Remember the homophobic pizza shop? It closed in less than a week after it went viral.