A Denver-based restaurant chain said it is confident it can keep the guacamole flowing without making its customers pay up, in spite of high avocado prices dipping into the Mexican Grill’s bottom line.
“We do not plan to raise prices and have not incurred any supply disruptions,” said Chipotle spokesman Chris Arnold, who adds the company tends not to adjust prices due to short-term, cyclical price fluctuations.
Chipotle chief financial officer Jack Hartung, during a third-quarter earnings call on Tuesday 25 Oct., said the company started seeing higher avocado prices this summer, and the increases only accelerated going into the fall.
Case pricing went from around $30 in the first half of the year towards $80 this month.
“Although we we had hoped that this would be a temporary spike, in recent weeks though, supply has become even tighter and pricing has become much more volatile than expected,” he told analysts on a third-quarter earnings call. “In fact, we’ve seen that some competitors recently have posted signs on their doors saying they are out of avocados altogether.”
Social media reports suggest that Chipotle’s Denver-based rival, Qdoba Mexican Eats, is among the restaurants struggling with a guacamole shortage at some of its restaurants.
The Hass Avocado Board, however, said such shortages should soon ease. Mexican growers have resumed shipments at higher than usual volumes.
The country could even swing from an avocado shortage to a guacamole glut in short order. U.S. avocado consumption runs around 43 million pounds a week. Shipments from Mexico for the week ended Oct. 25 ran 51 million pounds and could remain elevated for the next few weeks.
Imports are also ramping up from Peru and Chile, and the U.S. Department of Agriculture said, on Thursday, it may allow Columbia to import the fruit and prevent future shortages as avocados grow in popularity.
California’s recently completed avocado harvest came in at around 400 million pounds. But the worsening drought is expected to cut next year’s output of the water-intensive fruit by half of more, according to the Hass Avocado Board.
Source: denverpost.com
