Guacamole lovers flinched when President Trump threatened a trade fight with Mexico, which accounts for roughly 90% of U.S. avocado imports.
Chipotle Mexican Grill CMG 2.15%increase; green up pointing triangle was ready.
For the past seven years, the burrito chain has been scouring the Americas and the Caribbean, seeking out farms and suppliers that can satisfy its immense demand for the large-pitted fruit. In the past, Mexico had supplied 85% of Chipotle’s avocados, leaving the chain at the mercy of the country’s weather and other factors, such as cross-border trade.
“We essentially take every avocado from California that we can. We’re very proud of that. But obviously, there isn’t enough,” said Jack Hartung, Chipotle’s chief strategy officer.
Chipotle’s globe-spanning hunt for avocados reflects how companies navigate rapid changes in the country’s trade policies. Mexican imports were subject to a 25% tariff for a few days in early March before the president paused the levy on goods that comply with the North American free trade pact.
The U.S. imported about $3.4 billion of avocados from Mexico last year, representing one of the largest commodity imports by volume.
Food-industry supply chains can take years to build. At many companies, executives are deciding whether to redraw trade lines to avoid the levies, absorb rising costs or pass them along to customers.
Holy guacamole
Few companies can match Chipotle’s avocado appetite. The California-based fast-casual restaurant chain estimates that it bought around 5% of all the avocados consumed in the U.S. last year. Since domestic production is limited, most of the roughly 132 million pounds of avocados Chipotle used across its 3,700 locations last year were imported, executives said.
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