Sunday, April 26, 2015

Chipotle Says It Has Finished Removing GMO Ingredients From Menu – Wall Street Journal

Chipotle Mexican Grill Inc. CMG 0.30 % said it has finished removing genetically modified ingredients from its foods, becoming the first major restaurant chain to do so amid growing U.S. consumer questions about the agricultural technology.

Chipotle, which has 1,831 restaurants, has been working for more than two years to eliminate ingredients made with genetically modified organisms, or GMOs—corn, soybeans and other crops whose DNA is altered to achieve traits like pest-resistance. The company had said it hoped to be done by the end of 2014, but the transition "took a little longer than we thought," a Chipotle spokesman said late Sunday.

The Food and Drug Administration has approved a number of genetically modified crops, which proponents, including many science groups, argue are safe. Critics claim they cause a variety of environmental ills and could be harmful to human health. The skepticism is part of a wider backlash in recent years among consumers seeking simpler, more natural ingredients.

Chipotle in 2013 began telling consumers which of its menu items contained GMOs. Founder and co-Chief Executive Steve Ells has said Chipotle is making the move to avoid GMOs until the science around the technology is more definitive. The effort involved substituting a non-GMO sunflower oil for a genetically modified soybean oil it had been using, and sourcing non-GMO tortillas.

Chipotle's completion of its GMO-elimination process was reported earlier Sunday by the New York Times and CNN.

Other food makers, such as Ben & Jerry's ice cream, also have found it tougher than anticipated to make the move.

More than 90% of the corn and soy grown in the U.S. comes from genetically engineered seeds, making it difficult for big food companies to find enough beef or chicken that comes from animals given non-GMO feed, cooking oil and other processed ingredients. Chipotle already has run into shortages of beef and pork that meet its other quality standards.

But as more U.S. farmers are motivated by the premium price they can get for non-GMO crops, the supply increases.

"Non-GMO” is one of the fastest-growing label trends on U.S. food packages, with sales of such items growing an average of 13% a year since 2010 to more than $ 3 billion last year, according to market-research firm Nielsen.

Chipotle has benefited from Americans' efforts to eat simpler foods they perceive as healthier. While its same-restaurant sales continue to rise at a more rapid pace than more traditional competitors like McDonald's Corp. MCD 1.79 % , some Wall Street analysts worry Chipotle's growth rate is cooling. Its quarterly revenue, reported last week, increased 20%—below analysts' expectations, sending shares down about 5%.

Write to Annie Gasparro at annie.gasparro@wsj.com

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