Holy moly! Chipotle Mexican Grill may stop serving certain items, including the ever-popular guacamole, because of global warming.
And Chipotle would rather cut menu items than pay higher prices for locally grown goods.
According to the company’s SEC filings, food price increases during 2013 have made them more wary of the effects of global warming on their food, and the company expects there to be “additional pricing pressures on some of those ingredients, including avocados, beef, dairy and chicken during 2014.”
“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. “Any increase in the prices of the ingredients most critical to our menu, such as chicken, beef, cheese, avocados, beans, rice, tomatoes and pork, would adversely affect our operating results.”
Chipotle’s use of locally-grown organic ingredients means that each store relies on local products, which can be impacted by local weather. In the case of California, the severe drought that’s hit the state has contributed to price increases for avocados which go into making Chipotle’s signature guacamole.
“Alternatively, 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,” the company added. “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.”
California growers have been worried about the impact of global warming on their avocado crop for some time, and the state has been looking into ways to mitigate the effects of global warming on farmers.
A report from the California Department of Food and Agriculture claims that the “combined impact of increasing and more variable temperatures and variable rainfall is to increase the probability of abnormally low yields in any given year for perennial crops such as almonds, table grapes, walnuts, and avocados.”
“While there may be some positive impacts and opportunities associated with new temperature regimes due to climate change, such as the ability to cultivate some crops in new areas, all negative impacts ultimately stand to reduce crop quality (such as decreased size and yields),” the California report adds.
ThinkProgress reports that Chipotle uses about 97,000 pounds of avocado daily and up to 35.4 million pounds annually, adding that “hotter temps will cause a 40 percent drop in California‘s avocado production over the next 32 years.”
California, however, is not the world’s (or even the United States’) main supplier of avocados. Mexico is the world’s largest avocado exporter and the U.S., is in fact, the world’s largest importer of the delicious fruit.
Despite Chipotle’s doom and gloom, it seems that the avocado company Calavo Growers’ stock has been performing quite well, reports Smallcap Network. The company, which packs 35 percent of California’s avocados, has been growing its business and doing well, in spite of fears that global warming will destroy avocado crops.
The company’s CEO noted, “The fresh avocado forecast points to another strong year for the all-source supply. We will again see robust supplies and all early indicators are tracking favorably for sustained, vigorous growth in U.S. avocado consumption in 2014. As significantly, avocado demand is expected to continue growing for many years to come.”
The company’s SEC filings also don’t mention any crop problems due to global warming. The filing does mention weather patterns, but nothing about rising global temperatures.
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