“No hormones, ever” is what Shake Shack said about the crispy fried chicken in its sandwiches. A group of shareholders 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 claims. A 2023 letter from CEO Randy Garutti in his Stand For Something Good report states that Shake Shack’s culinary team in 2023 focused on improving the food lineup with “hormone- and antibiotic-free proteins.” The company advertises its poultry – and its bacon – as containing 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 faced with a proposal from a potential shareholder asking it to demonstrate exactly how its chicken is hormone-free or to provide an explanation and publish an analysis of the risks arising from such claims. Shareholder campaigner The Accountability Board said the claims were “difficult to understand”. The group focuses on responsible management 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 out of its 2024 proxy statement without facing repercussions from the regulator. According to Shake Shack, it has already started changing its formulation to say “no added hormones.”
Josh Balk, chief executive of the Accountability Board, is not happy with this change. “Shake Shack cannot make malicious and false claims for years and quietly sweep them under the rug when discovered,” he said in an email to Bloomberg. “And above all by simply replacing one misleading statement with another.”
A spokesperson for Shake Shack acknowledged the move to “no added hormones” and added: “We are not making any changes to our chicken suppliers or to any of our food and supply chain policies – this is simply a change in language ”.
Shake Shack isn’t alone in facing shareholders disenchanted with animal welfare issues.
Activist investor Carl Icahn has for years attacked McDonald’s over the fast food giant’s treatment of pigs. Icahn sought help from other large investors in his fight, but ultimately lost a proxy battle in 2022.
McDonald’s has pledged to completely avoid the use of gestation crates for pregnant sows by 2024.