Due to a weak harvest in California and low supply in Mexico, avocado prices are up 75% since July and 50% year year over year. Such a rise in cost could put one of the most popular menu items at Chipotle Mexican Grill (CMG) - Get Chipotle Mexican Grill, Inc. Report at risk.
Credit Suisse estimates that avocados account for 10% of Chipotle's cost of goods sold, meaning the fast casual chain racks in some serious cash from that "extra" guacamole.
So more importantly, does this mean your lunch is about to get more expensive?
No need to freak out just yet; at least for now the effect will be seen in Chipotle's margins rather than your guac.
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