Chipotle Guacamole at Risk Due to Climate ChangeBy: Kathy Karadza - March 6, 2014
The restaurant chain said it uses 97,000 pounds of avocado per day (which amounts to 18 tons per year), and almost 70 pounds in just one batch of guacamole.
While scientists said the avocado industry is currently fine, negative climate change could dramatically affect the crop. Scientists at Lawrence Livermore National Laboratory, for example, predict that warmer temperatures will cause a 40 percent drop in avocado production in California over the next 32 years.
Chipotle warned investors that severe climate changes could eventually affect the availability and prices of some of the guacamole’s ingredients and the company may not be willing to pay the bill if that is the case.
“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,” Chipotle said in its annual report.
“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,” read the report.
Chipotle did recognize the menu change could have a negative impact on the restaurant chain.
“Any such changes to our available menu may negatively impact our restaurant traffic and comparable restaurant sales, and could also have an adverse impact on our brand,” noted the company.
Chipotle’s commitment to local, organic, and sustainable farming practices is another reason it may be more vulnerable in the event of an increasing climate shift. Chipotle’s food producers are generally smaller operations and may not be as able to survive poor farming conditions without raising prices, which has already been practiced over the past two years, the company said.
“For instance, two years of drought conditions in parts of the U.S. have resulted in significant increases in beef prices during late 2013 and early 2014,” the company said, noting that further increases in the price of beef could affect its decision to remove guacamole from its menu.
Severe drought has put a strain on farming practices in California, the state in which the most Chipotle restaurants are located, at 288. The company is committed to working with local and sustainable farmers within 350 miles of the restaurant locations, so the drought in California has had quite an impact on costs because local producers are not always equipped to operate under poor weather conditions without increasing prices.
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