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Imagine to get a chipotle bowl without the fresh guacamole. The food would not know the same, and the ingredients would have nothing to keep them together to submerge them in a chip.
Although the additional guacamole costs around $ 2.65 to $ 4 depending on the location, the expensive addition is always worth it.
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As good as avocados can be, they are a expensive delicacy. Although the cost is still manageable, how much more are customers willing to pay for additional guacamole if the price is already high enough?
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On February 1, President Donald Trump announced 25% tariffs on all goods imported to the United States from Canada and Mexico and 10% in China, which entered into force on Tuesday.
However, after talking with countries leaders on Monday to potentially reach an agreement, President Trump arrested the early tariffs in Canada and Mexico for a month to negotiate more.
Most companies are concerned about negative financial repercussions that Trump's tariffs could contribute to their businesses and have begun to make changes in their supply chains to mitigate damage.
On the other hand, Chipotle states that he is not concerned about the effects that these tariffs could have in his most emblematic ingredient despite the uncertainty of potential price increases.
Chipotle states that he is not worried about Mexican avocados used to make his famous guacamole
Chipotle (CMG) He obtains 50% of his avocados from Mexico, and the second half comes from other Latin American countries, including Colombia, Peru and the Dominican Republic.
Although that may seem a fairly large percentage, only 2% of Chipotle's total sales come from Mexican imports, including avocados, tomatoes, files and peppers. And less than 0.5% come from Canada and China.
“If the tariffs recently announced in full effect, it would have a continuous impact of approximately 60 basic points on our cost of sales. In addition, we continue sure that we can compensate for the investment of the portion of 60 bases we made in 2024. Recently, we have begun to see that the impact decreased slightly as we expected, “said Chipotle's financial director Adam Rymer in a Profit call.
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In previous profits calls, Chipotle said he has been trying to get more avocados from outside Mexico. Considering that around 88% From avocados sold in the United States come from California, reducing their dependence on imports from Mexico is not as complicated as it seems.
In addition, when it was budgeted for avocados, it was predicted that Chipotle's estimated cost was higher than it really was in the most recent quarter, effectively keeping the company in line with its avocado expenses.
Chipotle also recently increased its menu prices by 2% last December due to inflation and price increases in its main ingredients so that it can increase its portions after the company received a violent reaction from customers.
Chipotle reveals his guide for the next quarter, but does not take into account important problems
Although Chipotle states that he is not concerned about the effects of Trump's tariffs on his finances, his guide could be otherwise, since he estimated that the cost of sales inflation is in low digits.
However, the guide does not include the impact of new tariffs on the Imported ingredients from Mexico, Canada and China or the investment of the 60 basic points.
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However, Chipotle's budget and the increase in appropriate prices could prevent the company from being affected by Trump's tariffs, at least in the rest of 2025, since it has more financial space to spend the possible tariffs.
Although Chipotle declared that the increase in the price of 2% will be carried out until December of this year, he did not mention whether the menu prices would increase again in 2026.
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