Avocado industry questions Chipotle’s fear of shortage - The Packer

Avocado industry questions Chipotle’s fear of shortage

03/10/2014 02:02:00 PM
Andy Nelson

BRE154474 DAvocado importers, shippers and industry officials don’t think the Chipotle restaurant chain’s fears that it may have to take guacamole off the menu are justified.

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.”

Comments (5) Leave a comment 

e-Mail (required)


characters left

California  |  March, 11, 2014 at 10:07 AM

They're just looking for any reason to continue to over charge for one scoop of guacamole. They figure if the big oil companies can manipulate the market why can't they.

Produce Guy    
Texas  |  March, 12, 2014 at 07:21 AM

Daniel, I don't think it is Chipotle that is trying to manipulate the market. It's the Mexican Avocado Commission that is.

March, 11, 2014 at 01:36 PM

After seeing some of the stuff they have put out about farmers and American agriculture, can you believe anything they say?

Salinas  |  March, 11, 2014 at 04:07 PM

Very True Jim. I'm for Chipotle and their socially responsibility initiative. It's the right thing to do, but when you give somebody too much power, they become arrogant. I guess they forgot they weren't the growers of the product, but the marketing end.

March, 13, 2014 at 07:48 AM

Produce Guy, I think all of the commissions try and manipulate the markets. It's what they do. For a restaurant to charge $1.99 for a scoop of guac which equals 1 48ct avocado they paid less than a dollar for and then scream about a shortage to the media is a joke. There's more fruit on the market now then ever and more regions coming on board. If they're saying there's a supply issue from a California avocado perspective they might have a point if they only used California fruit and the drought continues into next year. Otherwise its a publicity stunt with a price increase to follow

Feedback Form
Leads to Insight