For the past seven years, Chipotle has been scouring the Americas and the Caribbean in search of farms and suppliers that can satisfy its immense demand for avocados, reported the Wall Street Journal. “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.”
The hunt reflects how companies navigate rapid changes in the country’s trade policies, wrote the Journal. The U.S. imported “about $3.4 billion of avocados from Mexico last year, representing one of the largest commodity imports by volume.”
The QSR 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.
“We started thinking, ‘wouldn’t it be great if we had access to avocados all year-round from different countries of origin?’” said Carlos Londono, head of supply chain for the company. Chipotle identified half a dozen countries near the equator that could support avocado growth.
Chipotle has broadened its avocado sourcing to Peru and the Dominican Republic, and more recently, Brazil and Guatemala, wrote the Journal. The company hopes to develop new suppliers in countries such as El Salvador and Honduras.
Even with a more dispersed supply chain, about half of Chipotle’s avocados still come from Mexico. Chipotle typically pays $30 to $35 for a case, but it has spent more than $70 each when supply lessened, executives said. Each case can have around 48 to 84 avocados, depending on the season, size and where they are harvested.
The chain has said it aims to absorb the possible hit from tariffs instead of increasing prices for customers.