Chipotle has made significant strides in diversifying its avocado supply chain, reducing reliance on Mexican imports by sourcing avocados from Colombia, Peru, and the Dominican Republic. Despite these efforts, the chain may still face a financial impact if new tariffs are enacted by the Trump administration, which could lead to a 0.6 percentage point increase in costs. Currently, approximately half of Chipotle's avocados still come from Mexico, highlighting the challenges posed by potential trade policies. The company's fourth-quarter earnings report revealed lower than expected sales, indicating market volatility as a significant concern.
Chipotle's supply chain team has done a remarkable job over the last couple of years with vendor diversification, sourcing avocados from Colombia, Peru, as well as the Dominican Republic.
If the tariff takes effect, it could increase Chipotle's cost of sales by 0.6 percentage points. Chipotle also imports limes, peppers, and tomatoes from Mexico.
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