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America's Love Affair with Avocado

economist.com

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Re: America's Love Affair with Avocado

#21

Post by ceeker »

hobs wrote: post #5
tgb wrote: post #4

Earlier quoted context omitted.

That's not what the article claims: > Chipotle, a Mexican-themed restaurant chain, said that “historically high avocado costs” were a big reason why it posted disappointing financial results last year.

What do you think disappointing financial results because of Avacados is claiming then?

This is the bit that you are missing:

>>Some restaurants were forced to add a surcharge on guacamole, or temporarily to scrap it from their menus altogether. Others swallowed the bill.

They could raise prices but they have chosen not to so far. They may have to in the future. That explains why their financials were not great.

Re: America's Love Affair with Avocado

#22

Post by mlevental »

simonsarris wrote: post #12
jcadam wrote: post #8

Personally, I hate avocado in all its forms (guacamole, etc.). I don't understand what people see, err, taste in them. My wife, OTOH, loves avocados (I had never tried avocado before she forced me to sample one while we were dating, which I ineptly pretended to sort of not hate), and if I forget to buy several when I do the shopping, I'll find myself trying to make up a story on the spot about how all the avocados at…

This is a strange way to be mean to your wife? I don't get it. EDIT: sorry! Somehow missed the "forget" part of the sentence. I don't eat fruit, I don't like the taste. When I see dried mangoes, I buy them for my girlfriend because she loves them.

>I don't eat fruit, I don't like the taste.

you can't be serious. you don't like any kind of fruit?

Re: America's Love Affair with Avocado

#23

Post by cvsh »

drawkbox wrote: post #16
pmorici wrote: post #2

I don't understand how high avocado prices could cause Chipotle to loose money. Guacamole is an optional add on why wouldn't they just raise the price of the guacamole to reflect the market price of avocado or use avocado futures to hedge their price risk.

Probably a reason they are adding other high margin products like queso to offset shrinking margins on avocado. Guacamole is always expensive but worth it. Though simplicity and just doing the same thing well is really what Chipotle is or was, much like In-N-Out doesn't need gimmicks, just the same good food consistently with well paid employees so it is quality. Hopefully Chipotle doesn't add too many things.

Based on casual observation of what other customers are ordering from my frequent visits to Chipotle, it seems like queso has been a complete failure. I don't understand why they thought cheese would be something people would pay extra for.

A) Cheese is not usually expensive, like avocado, and so not usually considered worth paying extra for

2) Cheese is known not to be healthy, and part of the appeal of Chipotle is the illusion that you're eating healthy food

3) A different kind of cheese is already available for free, so that substitute good is bound to drive down demand for queso

I did notice that they recently cut corn tortillas and one (or two?) of the meat options, so they at least seem to be cognizant of the benefits of reducing decision fatigue by concentrating on their best-selling options

Re: America's Love Affair with Avocado

#24

Post by rexpop »

simonsarris wrote: post #12
jcadam wrote: post #8

Personally, I hate avocado in all its forms (guacamole, etc.). I don't understand what people see, err, taste in them. My wife, OTOH, loves avocados (I had never tried avocado before she forced me to sample one while we were dating, which I ineptly pretended to sort of not hate), and if I forget to buy several when I do the shopping, I'll find myself trying to make up a story on the spot about how all the avocados at…

This is a strange way to be mean to your wife? I don't get it. EDIT: sorry! Somehow missed the "forget" part of the sentence. I don't eat fruit, I don't like the taste. When I see dried mangoes, I buy them for my girlfriend because she loves them.

This person habitually attempts to deceive their wife, and from their own account describes her feeling antagonized. I don't think they are "forgetting avocados" so much as they are bullying their partner with plausibly deniable emotional abuse.

Re: America's Love Affair with Avocado

#25

Post by traek »

tgb wrote: post #17
hobs wrote: post #5

Earlier quoted context omitted.

What do you think disappointing financial results because of Avacados is claiming then?

The post I replied to is claiming that they lose money on each sale of guacamole. (This is clear from bringing up the possibility of raising prices of the optional add on guacamole.) However, this is clearly much stronger claim than merely that Chipotle is doing worse financially than if their avocados cost less.

> The post I replied to is claiming that they lose money on each sale of guacamole. (This is clear from bringing up the possibility of raising prices of the optional add on guacamole.)

That's not what they're claiming, they're saying that if ingredient prices rise (e.g. for avocados) Chipotle can raise menu costs to protect margins. Nowhere is it implied that guacamole was being sold below-cost.

Re: America's Love Affair with Avocado

#26

Post by noway421 »

philipodonnell wrote: post #11
pmorici wrote: post #2

I don't understand how high avocado prices could cause Chipotle to loose money. Guacamole is an optional add on why wouldn't they just raise the price of the guacamole to reflect the market price of avocado or use avocado futures to hedge their price risk.

Raising prices for a chain like Chiptole is non-trivial. Think about all those menu boards listing the price of adding guacamole, every one of those has to be reprinted, distributed and posted. IT systems updated, etc. Not saying they don't do stuff like that all the time, there's just more of a lag between a commodity price rising and a chains ability to raise the price of the end product. These kinds of decisions a…

Also, the customers might not be happy. Especially if it was selling at no extra charge.

Re: America's Love Affair with Avocado

#27

Post by kiith_naabal »

msandford wrote: post #13
axaxs wrote: post #9

nearly $2.00 a piece wholesale? I'm curious why the market hasn't been flooded by now. *As pointed out below, it takes at least 5 years for an Avocado tree to produce fruit, which explains why there aren't quick adjustments.

What's the lead time on making an avocado tree? Not as bad as making more programmers I'm sure, but it's not fast either.

You're not wrong - avocados planted from seed take anywhere from 5 to 13 years+ before they flower and produce fruit.

http://ucavo.ucr.edu/general/answers.html

Re: America's Love Affair with Avocado

#28

Post by sciencesage »

philipodonnell wrote: post #11
pmorici wrote: post #2

I don't understand how high avocado prices could cause Chipotle to loose money. Guacamole is an optional add on why wouldn't they just raise the price of the guacamole to reflect the market price of avocado or use avocado futures to hedge their price risk.

Raising prices for a chain like Chiptole is non-trivial. Think about all those menu boards listing the price of adding guacamole, every one of those has to be reprinted, distributed and posted. IT systems updated, etc. Not saying they don't do stuff like that all the time, there's just more of a lag between a commodity price rising and a chains ability to raise the price of the end product. These kinds of decisions a…

A lot of chains use TV sets to list item pricing now, so that would make it easier. But I agree that it's usually not in the chain's best interest to raise prices often

Re: America's Love Affair with Avocado

#30

Post by optymizer »

jcadam wrote: post #8

Personally, I hate avocado in all its forms (guacamole, etc.). I don't understand what people see, err, taste in them. My wife, OTOH, loves avocados (I had never tried avocado before she forced me to sample one while we were dating, which I ineptly pretended to sort of not hate), and if I forget to buy several when I do the shopping, I'll find myself trying to make up a story on the spot about how all the avocados at…

I like avocados because they have a creamy and nutty flavor. They taste a little like green walnuts - not the dried ones from the store, but the raw walnuts from walnut trees. They get your fingers all dark brown when you try to peel the skin and they're delicious.

Also, I wasn't much of a fan of guac until we learnt how to make it at home 2 years ago. Since then we have guac at least twice a week. I still have some left in the fridge. You know what eating chocolate feels like, right? That's the feeling I have when I eat homemade guacamole.

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