Chipotle, Say It Ain’t So: RIP Guacamole?

Source: http://www.flickr.com/photos/michaelbrooks/

Chipotle (NYSE:CMG) lovers, you may want to sit down for this. The chain said in its latest filing with the Securities and Exchange Commission that it may need to remove guacamole from its menu due to climate change. Chipotle cited the issue under the “risks to business” heading, and it’s safe to say the placement couldn’t be more appropriate.

United Press International reported the potentially devastating news on Wednesday, explaining that Chipotle was forced to make the warning in its latest SEC filing due to its recognition of the fact that food prices are continuing to increase — the costs of avocados, beef, dairy, and chicken are set to rise in 2014. That’s an issue for the popular Mexican fast food chain, which goes through a reported 97,000 pounds of avocado in a day, according to UPI. Chipotle may have no choice but to pull back on its guacamole production, considering it takes the chain 70 avocados to make just one batch of the good stuff.

Chipotle said its SEC filing, per UPI, “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.”

If Chipotle ends up suspending its production of guacamole in 2014, the news will undoubtedly come as a shock to customers and could even threaten the chain’s current successes. While fast food restaurants like McDonald’s (NYSE:MCD) and Burger King (NYSE:BKW) are suffering slowing sales and a lack of consumer demand, Chipotle’s lines are only getting longer, and its shares are also soaring.

Though consumers don’t visit Chipotle solely for its guacamole, the savory topping is something the chain is well known for. Chipotle said that the ingredients’ removal could affect restaurant traffic, comparable sales, and “could have an adverse impact on our brand,” UPI reports.

Still, nothing is official, and a good part of Chipotle’s decision hinges on the climate in 2014 and how the weather will affect the availability and cost of some of its key ingredients. UPI points out that the Denver-based company prides itself on sourcing organic and locally sourced ingredients, so it really can’t cut corners on obtaining its ingredients, even if it means absorbing higher prices. We’ll have to wait and see what’s to come for Chipotle’s guacamole. While some people may mourn the potential loss of their favorite ingredient, others may take to the chain faster than ever to get it while it’s still available.

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