In its annual report to the Securities and Exchange Commission on March 5, Chipotle reported significantly higher prices for many ingredients in 2013, and the company expects high prices for avocados and other ingredients this year.
That led Chipotle to warn investors that it may have to temporarily discontinue some items.
“In the event of cost increases with respect to one or more of our raw ingredients, we may choose to temporarily suspend serving menu items, such as guacamole or one or more of our salsas, rather than paying the increased cost for the ingredients,” according to the SEC filing.
Chipotle also said that freezes, drought or other weather conditions could lead to spikes in produce prices.
“Increasing weather volatility or other long-term changes in global weather patterns, including any changes associated with global climate change, could have a significant impact on the price or availability of some of our ingredients,” according to the filing.
Higher prices for avocados, tomatoes and other ingredients “would adversely affect our operating results.”
Importers and shippers who did not want to be quoted disputed the assertion that there could be an avocado shortage.
So did Emiliano Escobedo, executive director of the Irvine, Calif.-based Hass Avocado Board.
About 1.69 billion pounds of avocados shipped in the U.S. in 2013, up from 1.35 billion pounds in 2010, according to the board. In 2014, 1.7 billion pounds are expected.
“The concerns about shortages disclosed by Chipotle in a report directed to investors doesn’t accurately portray the avocado volume and supply situation,” Escobedo said. “There is no hass avocado supply problem, and there is no shortage projected.”