Shake Shack, shareholders debate deceptive advertising claims about chicken hormones

“No hormones, ever” is what Shake Shack said about the crispy fried chicken in its sandwiches. A shareholder group says that’s a paltry claim, because literally no restaurant chain in the country uses hormones in its chicken. 

The company’s corporate communications and marketing are heavy on the claims. A 2023 letter from CEO Randy Garutti in its Stand For Something Good Report said the Shake Shack culinary team in 2023 focused on improving the food lineup with “hormone- and antibiotic-free proteins.” It touts its poultry – and bacon – as having no hormones, although the company notes with an asterisk that federal regulations prohibit the use of hormones or steroids in chicken and pork.  

Now, the company is facing a potential shareholder proposal asking it to show exactly how its chicken is hormone free or to provide an explanation and to publish a risk analysis of making those statements. The shareholder activist, The Accountability Board, said the claims are “difficult to understand.” The group focuses on stewardship and transparency, according to its website, and its portfolio includes investments in other fast food businesses including Jack in the Box, McDonald’s and The Wendy’s Company.  

Shake Shack this week asked the Securities and Exchange Commission to leave the proposal off its 2024 proxy statement without facing repercussions from the regulator. According to Shake Shack, it has already begun altering its wording to say, “no added hormones.”  

Josh Balk, chief executive officer of the Accountability Board, isn’t satisfied with that change. “Shake Shack can’t make harmful and false claims for years and quietly sweep them under the rug when caught,” he said in an email to Bloomberg. “And especially so by simply replacing one misleading claim for another.” 

A Shake Shack spokesperson acknowledged the change to “no added hormones” and added, “We are also not making any changes to our chicken suppliers or any of our supply chain and food policies — it is simply a language change.” 

Shake Shack isn’t alone in facing down shareholders who are disenchanted with animal welfare issues.  

Activist investor Carl Icahn famously took on McDonald’s for years over the fast food giant’s treatment of pigs. Icahn in his fight sought the help of other large investors but ultimately lost a proxy fight in 2022. 

McDonald’s pledged to avoid the use of gestation crates for pregnant pigs entirely by 2024.  

Subscribe to the new Fortune CEO Weekly Europe newsletter to get corner office insights on the biggest business stories in Europe. Sign up for free.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *

%d bloggers like this: