Meet Patrick Quade: The Man Who Exposed Chipotle's Norovirus Outbreak

Should Chipotle Mexican Grill, Inc. CMG have suspected the recent norovirus outbreak? Patrick Quade, the founder of iwaspoisoned.com and dinesafe.org, believes it should have seen it coming.

Iwaspoisoned.com is a website that allows individuals to self-report suspected foodborne illnesses. Quade's mission all sparked from a horrible personal experience in 2009, and he has now helped send shares of Chipotle down 14 percent after the outbreak in Sterling, Virginia.

“I had a BLT wrap from a deli in Tribeca, and I got really sick. I believed it to be food poisoning, and I called and told them, “Maybe you want to take a look at your food; there may be an issue with it.” And they hung up. Then, I said to myself there needs to be some way for people to report food poisoning incidents, and that way you (consumers) can see, say 50 other people were sick after eating [at a restaurant], that would be useful information for consumers and for restaurants. So, I built a website.”

At the time, Quade was the head of market structure at Morgan Stanley. It was not until 2016 when Quade realized he was ready to leave Wall Street to work full time on helping source food-poisoning incidents.

“By that time, I had enough inbound interest from industry, that I realized that it may be possible to fund the free consumer/public health agency services we provide by monetizing via services to industry, but I knew it would require a full-time effort to achieve that goal,” he said.

The Atypical Chipotle Case

It is definitely unusual for a stock to move down over 10 percent over a few food poisoning reports, but Quade claims he saw it all coming.

He presented Benzinga with data that showed the rate of illnesses reported from Chipotle locations to be nearly 9 times higher than its competitors.

“We figured out in 2015 that the rates were really elevated at Chipotle versus their peers, and this was before the first outbreak and before there was any selection bias. So, we think having that kind of information would have given them an early warning signal, as early as 12 months before,” Quade said.

Ever since the initial Sim Valley, California norovirus outbreak in 2015, Quade has reached out to Chipotle in order to offer them alerts on food safety concern reports to no avail, as the company will not respond to his calls. But, he still would like to be an ally to Chipotle and is ready to share his data with the restaurant chain.

“Their statements have been something to the effect of “crowdsource data is not reliable,” and they have not made a direct statement to me. But, I think the message to them is that we can absolutely be an ally if they subscribe to our alerts, receive our benchmarking, so they know how their brand is running, so we can help them,” Quade said.

Chipotle spokesman Chris Arnold recently told Bloomberg, “Overall, this kind of data may be useful, but the integrity of the data matters and, absent clinical validations, it’s hard to know how revealing the data may be.”

The Accuracy Of Iwaspoisoned.com Reports

Quade highlighted there certainly is some form of selection bias after there a new story is published about a food poisoning outbreak. However, the majority of the reports, which go through a frontend and backend review, have proven to be accurate.

“I think when there is a news story, there is some level of selection bias. So, this is why the single reports are not as meaningful as 10 or 15 reports. But, having said that, Chipotle had the highest rate of reporting of reporting by multiples before the first outbreak in 2015, and there was no selection bias at that time.”

Profiting Off Of Food Poisoning Data

Quade's other business, dinesafe.org, provides data to hedge funds on the latest outbreaks.

He highlighted how hedge funds are interested in bespoke data sources and how this data can certainly be a tool for finding the next big trading opportunity. The database costs $5,000 a month, and Quade highlighted how demand has surged since the latest Chipotle outbreak as more businesses are wanting to get involved.

Some of the latest restaurants to be reported on iwaspoisoned.com are McDonald's Corporation MCD, Panera Bread Co and Tim Horton's. However, most of these reports are coming from various store locations, which usually is not as strong of a signal of a food poisoning outbreak.

Overall, after seeing Chipotle questioned by these latest reports, Quade joked, “I would prefer not to eat at Chipotle.”