Say it ain’t so, Chipotle: How climate change may harm guacamole at the burrito giant
Could climate change hit guacamole next?
There was one news story in particular on climate change that really resonated with me and hit close to home. I’m not talking about this one explaining how the oceans’ oxygen levels are rapidly decreasing, or this one explaining how climate change might be making North American winters longer. No, the news story that really shook me to my very core was the one which warned that Chipotle may need to stop serving guacamole thanks to the effects of climate change.
Obviously, climate change has some incredibly serious implications for our planet and for the future generations of humans who may or may not want to live on it. According to NASA, higher sea levels, droughts, and heat waves are all lovely events we can look forward to over the next century thanks to changing climates [1]. Yet, for some reason all of these doomsday scenarios can often feel distant and ethereal, as if they don’t really apply to “us”, but rather to some nameless, faceless generation who will succeed us (even if this is wildly inaccurate and the effects of climate change are happening as we speak [2]).
So it’s not until something we take for granted, something we interact with every day and don’t even realize how much we love, something like Chipotle’s guacamole, is threatened that we sit up and take notice. But wait a minute, what does climate change have to do with Chipotle and guacamole? Let’s dig in and make sure we get the full scoop (pun most certainly intended)
Chipotle’s announcement
In their annual 10-k filing with the SEC in 2014, Chipotle listed some of their perceived risks of running a restaurant business. Specifically, they mentioned [3]:
Increasing weather volatility or other long-term changes in global weather patterns, including any changes associated with global climate change, could have a significant impact on the price or availability of some of our ingredients […] 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 […]
Climate change and guacamole
But how exactly could climate change lead to the higher avocado prices Chipotle was worried about? Well, scientists at the Lawrence Livermore National Laboratory ran studies to assess the potential impact of changing temperatures and precipitation on various crops in California, like the avocados that make up guacamole [4]. For instance, they simulated temperature increases between two to four degrees celsius, and what they found was that such changes could reduce avocado crop yields by 40% [4]. With a reduction in yield, it’s not hard to imagine an increase in prices and decrease in availability. Indeed, the price of a single avocado increased 46% in just the last year [5]. So it’s not crazy to think that could have an impact on Chipotle’s ability to continue serving the beloved guacamole.
Chipotle’s options
As of now, Chipotle seems to be downplaying the chances of a guacamole nightmare, saying they have no plans to make any changes to their offering [6]. In other words, there’s no specific public action they’re taking to mitigate the risk right now. But while they may be telling guacamole fans to rest easy in the near term, what steps can Chipotle take to protect their guacamole interests long term?
Obviously, they can encourage their growers to use more sustainable methods, but it’s not clear that this would be an effective or feasible strategy. Instead, Chipotle should tackle the bigger picture and use their unique position to make a stand against climate change. It’s really hard to get people to care about global warming. (If you’re in doubt about this, just ask former US Vice President Al Gore). So it’s rare that a news story on climate change can galvanize a population of people. And yet that’s exactly what happened with Chipotle and their guacamole scare [6,7,8]. Indeed, the controversy even inspired hash tags to “#fixtheclimate” and “#savetheguac:
Chipotle is in a unique position to capitalize on their place in the cultural zeitgeist and on the diehard devotion of their fans in order to have a meaningful impact. They can educate consumers on the consequences of climate change (beyond guacamole), teach them how to make small differences in their own daily lives, and motivate them to demand change from their lawmakers en masse. Indeed, the impetus for a large scale response to the perils of climate change doesn’t need to come from a doomsday story (as accurate as that story might be). No, the necessary inspiration can just as effectively come from the fear of losing something as seemingly trivial as guacamole.
Word count – 777
Sources:
[1] “The Consequences of Climate Change.” NASA, NASA, http://climate.nasa.gov/effects/.
[2] Cama, Timothy. “Kerry: Climate Change ‘Not a Distant Threat.’” Kerry: Climate Change ‘Not a Distant Threat,’ The Hill, 31 Aug. 2015, http://thehill.com/policy/energy-environment/252364-kerry-climate-change-not-a-distant-threat.
[3] “SEC Filings.” Chipotle Investor Relations -, 5 Feb. 2014, http://ir.chipotle.com/phoenix.zhtml?c=194775&p=irol-SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTkzNjIzNTImRFNFUT0wJlNFUT0wJlNRREVTQz1TRUNUSU9OX0VOVElSRSZzdWJzaWQ9NTc%3d
[4] “Rise in California Temperatures Likely to Affect Crops.” EurekAlert!, 4 Dec. 2006, www.eurekalert.org/pub_releases/2006-12/dlnl-ric120406.php.
[5] Chamlee, Virginia. “What Do Skyrocketing Avocado Prices Mean for the Nation’s Guacamole Supply?” Eater, 25 July 2016, ] http://www.eater.com/2016/7/25/12270508/avocado-prices-chipotle-guacamole.
[6] Complex. “Fact: No One Cared about Global Warming until Chipotle’s Guac Supply Was in Jeopardy. Http://T.co/67kBxT83EP.” Twitter, Twitter, 5 Mar. 2014, https://twitter.com/complexmag/status/4412769764151459844.
[7] Huntsman, Liddy. “It’s up to Us, America. We Need to Save the Guacamole at @Chipotle. #Fixtheclimate #Savetheguac.” Twitter, Twitter, 5 Mar. 2014, https://twitter.com/HuntsmanLiddy/status/441215988240244736.
[8] Jayakumar, Amrita. “Don’t Panic. Chipotle’s Guacamole Isn’t Going Anywhere (for Now).” The Washington Post, 5 Mar. 2014, https://www.washingtonpost.com/news/wonk/wp/2014/03/05/dont-panic-chipotles-guacamole-isnt-going-anywhere-for-now/
Cover Image: https://www.flickr.com/photos/stevendepolo/13746431403
From this read, it seems that Chipotle is doing very little to save avocados! Guacamole and chips are such a key product offering to Chipotle, so they can’t ignore the implications of climate change, especially as it affects one of their major customer value propositions. I agree with you that a big opportunity is for Chipotle to become more deliberate and conscious about partnering with more eco-friendly, globally responsible avocado growers. Companies such as Starbucks ensure that their supplies and products are sourced from sustainable partners, so I am not sure why Chipotle thinks that they can ignore the impact of their business model on the well-being of our environment. As the company begins to locate environmentally friendly suppliers, I think that in the interim, Chipotle could be more thoughtful about the amount of guacamole that their assembly lines slap on to each burrito bowl. Limiting the quantity distributed to each customer could help alleviate some of the pressure that is coming from reduced avocado yields. There is no need to dump that much guacamole on each person’s burrito bowl, especially since often times, people are unable to even finish an entire burrito bowl!
Hi Pasha! I wrote about this topic as well and I was intrigued by your approach to the guacamole situation. I think Chipotle has a lot of credibility and clout in their promotion of sustainability, not only in their sustainable sourcing but also in the annual Chipotle Cultivate festivals that promote greater awareness of food sustainability. However, given all of the hullabaloo over the recent E. coli outbreaks, how can Chipotle pivot the focus to the effects of climate change? Moreover, how can Chipotle galvanize millennials from talking about climate change on social media to actually taking action? I think the real challenge for Chipotle will be having consumers not only “talk the talk” but also “walk the walk”.
Pasha, thank you for the funny and entertaining read! I always enjoy a good scoop of guac pun.
The comment above really resonates with me. How can Chipotle actually get its consumers to do something about climate change? I think they’ve clearly already started to set an examples as corporation, and that goes a long way. However, Chipotle could have huge impact if they actually encouraged their customer to do something to help. I think the sentiment you expressed at the beginning of the post — guacamole is something we all touch and see everyday. Chipotle has the unique power to engage people around a product they love, and they should use it! Chipotle could have enormous impact on our environment.
Pasha — great piece and clearly a topic and company that adds a bit of spice to the climate change debate.
Agreed with #CE# above regarding the Starbucks model of impacting suppliers. Chipotle already “charges extra” for consumers who want guacamole. Why not use price to their advantage? While I shudder at the thought of even higher guac charges, Chipotle can use price to limit total guacamole volume consumed at their stores while keeping revenues tied to guacamole consumption relatively even. This tactic would ensure that only those who truly “need” guacamole with their meal are willing to pay up for it while protecting their top line. What’s more, Chipotle can earmark a percentage of the guacamole revenues they earn to fund an initiative to support guacamole farmers, and thus mimic Starbucks’ model focusing on a key input to their product mix.
I have to disagree with JBD. If we simply allow pricing to dictate what we are willing/not willing to serve and transitively support, where does it end? Do we not walk into the tragedy-of-the-commons situation where you can pay your way out of any situation, if you have the means to? One could argue that you didn’t tell the farmers to keep growing avocado’s, you just buy the ones that are available; however, I think that by creating a market you do indeed influence the producer side of the equation in terms of how to operate and how much to produce. Such is the reality of our markets. Now, some would argue that this exact market system has us moving toward an unsustainable future. I myself and not so convinced. Perhaps, with the right regulation and subtle adjustments to how our markets work, we can have our guac and eat it too. IF Chipotle halted all further purchases of avocado’s, perhaps they could instigate a conversation on both the customer and producer ends of this supply chain to really ACT on making sustainable change. People need a reason to revolutionize and act. Perhaps if we continue pricing to avoid our problems, we won’t see action until it is too late.
Great article and very interesting focus on Chiptole’s responsibility in the current scenario. I find remarkable that it was a wake up call for people who refused to acknowledge climate change and therefore Chipotle’ not only can capitalize on the moment but has a very strong responsibility to act on it and drive change.
It is interesting to see how different parts of the equation reacted to the issue and the impact the issue had on them. On the supplier’s end, it was interesting how it was not until this moment that my country’s production questioned their practices and started designing actions steps to ensure that resources are sufficient to our people before capitalizing on potential exports. As I have mentioned in previous posts, avocados are part of the culinary culture of Mexico. Being an ancient source of protein for the people, avocado is included in 3 of the 3 meals that every Mexican has daily. Since the avocado “trend” in the US, Mexico has exported millions of avocados to its northern neighbor experiencing a huge inflow of resources into the Mexican economy and providing jobs in the Mexican fields, but also creating an inherent shortage in people’s homes and rising avocado prices. The cultural shift and struggle that derives from this tensions is an increasing concern among agriculture officials who are in search of solutions to this growing problem.
Great job Pasha! So true that it takes something deeply personal for you to truly understand the impact climate change will have on your life in the future. For me, it was the potential impact to skiing, something I grew up around with my family. For you, it was the extra $1.95 you (BALLER!) drop on that burrito 3-4 times a week. Let’s hope policy makers and business leaders reach similar epiphanies. Otherwise, we’ll have a shredless, guacless, no fun, no taste world – and who wants to live in that!!
Great post Pasha. The power of a company to galvanise individuals to action is intriguing and whilst Chipotle hasn’t actively been encouraging its customers or proactively educating them about the challenges behind guacamole procurement, I think this could be an interesting channel for them to tap into. It would allow them to not only stimulate positive conversation and action against climate change but would also allow them to engage with their young clientele in a more meaningful way than just through an large carnitas burrito with extra guacamole.
I am disappointed though by their inaction thus far on climate change despite their acknowledgement of the risks it presents for a core part of their offering. The big question I have is how we collectively (as a society/country/world) can encourage companies to take some responsibility for positive action. If we can’t do this for companies whose business models are already threatened by climate change, I’m not sure how we’ll be able to effect positive change from those who are more insulated from global warming’s effects at present.
Thanks Pasha! I think the unique position of Chipotle is it’s vertical integration that provides them lots of control on their supplies. Taking into account potential climate change it may become a great disadvantage. While other fast foods can easily switch suppliers, Chipotle becomes extremely vulnerable to anything happening on their fields. I wonder if they are making efforts in diversifying their supply chain? Also it may be hard, since natural products are already the part of Chipotle value proposition