The cost of a burrito at Chipotle may be going up in the near future.
The company just reported their Q3 earnings, and in the earnings call CEO and Founder Steve Ells said that a 3-5% price increase could be on the way. The increase could come, in large part, as a product of the restaurant chain attempting to fully remove genetically modified organisms from their ingredients.
"We are not going to make a decision today on pricing but I think that it’s probably in kind of a mid-single digit range, whether that’s 3, 4, 5 kind of percent. What it will depend on is what happens with general ingredient inflation between now and then and then what it costs us to remove GMOs from the rest of our ingredients," said Ells.
"Once we have all that information at hand we’ll be able to do a better job of figuring out what the price increase might be. And in terms of timing it’s really hinging more on removing GMOs. We’d really like to make more progress, understand what that’s going to cost, how much time that’s going to take, all that kind of stuff and then we’ll feel better about coordinating a price increase around the time that we’re removing GMOs and we think that there might be an opportunity as well. We think it will be a pretty exciting time for us when we can announce that."
Current Chipotle ingredients that contain GMOs include soybean oil, corn flour, and cornstarch.
"We decided we'd rather try to avoid GMO ingredients until perhaps the science is more clear," said Ells earlier this year. "There are some things that we just can't, today, get non-GMO."
"I don't know that I can say today that we have no soybean oil, but very shortly, in weeks, we will have none. It will not be long before a Chipotle is GMO-free."
One of Chipotle's main marks of pride over the years has been their "Food with Integrity" commitment, which means that when possible, Chipotle sources uses ingredients that are sustainably grown and occasionally local.
"We are not aware of any other restaurant company anywhere near our sight that’s even attempting to do this and so to actually accomplish it will be pretty exciting and we’d like to time that excitement around with the price increase," said Ells.
Chipotle reported an 18% increase in revenue in Q3, up to $826.9 million.
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