Why Chipotle Isn't Worried About Its Guacamole Amid Mexico Tariffs

Despite the widespread anxiety surrounding President Donald Trump's potential tariffs on all Mexican imports, Chipotle is remaining firm in its ability to persist despite the uncertainty. The fast-casual chain relies on a sufficient avocado supply to produce its fan-favorite guacamole, but it has plans to evade possible tariff-induced pitfalls.

About half of Chipotle's avocado supply comes from Mexico, while the rest come from countries in South America and the Caribbean. Adam Rymer, Chief Financial Officer of the Mexican-inspired chain, said if Trump officially enacted the tariffs, the company would experience a drop of 60 basis points, or 0.6%, in cost of sales — that estimate suggests the tariffs wouldn't significantly affect the company.

The chain is also working to diversify its avocado sources. California produces an overwhelming majority of the avocados grown in the United States, so it also wouldn't be too difficult for Chipotle to tap into California as a producer.

In the most recent fiscal quarter, Chipotle overestimated its avocado costs, so it is still financially safe from potential increases due to the tariffs. That buffer is definitely a good thing, since the chain already increased its prices in December 2024 and promised larger portions after widespread customer complaints. The heightened revenue was meant to cover higher food and ingredient costs, but it could also help the company sustain tariff-induced costs, if it comes to that. 

So will Chipotle be getting more expensive — again? Well, the latest tariff news suggests the company won't have to worry about hiked import costs, anyway. Though Trump proposed a 25% tariff on all Mexican imports throughout his campaign, it appears that recent negotiations with Mexican president Claudia Sheinbaum may lead to an agreement. The tariffs were planned to go into effect in early February, but as the chances of reaching a lasting agreement increase, Trump decided to postpone implementing the tariffs for another month. 

Despite all this, Chipotle is still predicting relatively low sales growth. The chain is bracing for the broad impact of tariffs, market uncertainty, inflation, and higher costs of goods.