CREDIT: AP Photo/Gene J. Puskar
It’s your choice, America. Fix the climate, or the guac gets it.
Chipotle Inc. is warning investors that extreme weather events “associated with global climate change” might eventually affect the availability of some of its ingredients. If availability is limited, prices will rise — and Chipotle isn’t sure it’s willing to pay.
“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,” the popular chain, whose Sofritas vegan tofu dish recently went national, said in its annual report released last month. “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.”
Chipotle did say that it recognizes the pain it (and its devotees) would have to go through if it decided to suspend a menu item. “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,” the filing read.
The guacamole operation at Chipotle is massive. The company uses, on average, 97,000 pounds of avocado every day to make its guac — which adds up to 35.4 million pounds of avocados every year. And while the avocado industry is fine at the moment, scientists are anticipating drier conditions due to climate change, which may have negative effects on California’s crop. Scientists from the Lawrence Livermore National Laboratory, for example, predict hotter temps will cause a 40 percent drop in California‘s avocado production over the next 32 years.
Chipotle’s commitment to organic, local, and sustainable farming practices is also one of the reasons why it may be more susceptible to unexpected climate shifts. As the company notes, its food markets “are generally smaller and more concentrated than the markets for commodity food products,” meaning Chipotle buys from producers that are less able to survive bad farming conditions without raising prices. And those prices have already been raised significantly over the last year, Chipotle 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 more price increases on beef could affect its decision to suspend guacamole service. While scientists’ understanding of drought and climate change is evolving rapidly, mainstream climatologists’ view of drought is that it is directly linked to man-made climate change.
Severe and prolonged drought has put a strain on farming practices in California, the state which holds the most Chipotle restaurants (288, according to its annual report. Ohio holds a not-so-close second, with 148 locations.). And it’s not just the beef. With water scarce, farmers are unable to plant as many seeds, so prices of produce are also projected to rise.
Chipotle has a commitment to using local produce grown on farms within 350 miles of the restaurants where it will be served, so its California locations are likely the ones at highest risk from experiencing the drought effects of climate change.