Avocados will soon run out at smaller restaurants that don’t have the buying power of Chipotle Mexican Grill Inc.
For example, Salsarita’s Mexican-themed restaurants won’t be able to make any more guacamole in about a week — 10 days maybe if they can stretch it. The 75-unit chain isn’t optimistic about getting any more avocado supplies for awhile amid a suspension on imports from Mexico, which accounts for 80% of U.S. supply. According to Phil Friedman, Chief Executive Officer, the inventory remains as it is.
“We’ll use what we have. I’m not going to look for any type of alternative, we’re just going to announce to our customers that guacamole is not available until further notice,” he said in an interview.
Avocado crunch is the latest in a series of disruptions to the food supply chain. This has been disrupted by labor shortages and logistical headaches. It’s part of what’s behind the fastest pace of inflation for consumers in four decades.
The supply chain chaos is affecting small restaurants most. Businesses like Salsarita’s can’t negotiate large-order discounts, and don’t always have the cash reserves to pay premiums when competition for a product heats up. Costs are “horrendous,” Friedman said, noting that in addition to avocados, cups are hard to get currently.
“Everything we’ve gone through, every week is constant change with supply chain,” he said.
Even Chipotle, which recently opened its 3,000th location, said it has just “several weeks” of supply of avocados, and it can pull from other regions such as Peru.
“Our supply chain is hot on the path and working every angle, I assure you,” Chief Restaurant Officer Scott Boatwright said in an interview.
The U.S. Department of Agriculture’s halt on avocado imports from Michoacán, a coastal state just west of Mexico City, went into effect Feb. 11. In an email to Bloomberg, U.S. Department of Agriculture stated that a supervisor received threats after an inspector failed to certificate an avocado shipment. The agency said it won’t lift the ban until it’s sure employees are safe.
“We must have assurances that our employees’ lives are not at risk,” the statement said.
According to Mexican government data, avocado prices have risen by nearly three times since last year.
Many businesses are seeking alternative sources of avocados. According to Josh Jordan, a spokesperson for J.R. Simplot Co., there has been a noticeable increase in interest by food service customers from J.R. Simplot Co.’s frozen and prepackaged guacamole products. They have a shorter shelf life than fresh avocados.
Co-owner Neville Baay said that a 48-ounce case of avocados at El Barrio, a Mexican-inspired Mexican restaurant, in Birmingham, Alabama costs between $30 and $40. The price of avocados has increased to $65 USD. They might remove guacamole from their menu if the price rises enough. Guacamole is still a popular item.
“The Chipotles and Taco Bells of the world can ride with the current,” said Baay. “We have to take our lumps and hope it doesn’t get too bad.”