As Wall Street worries about what potential tariff hikes in Mexico mean for global trade, Chipotle CEO Scott Boatwright told CNBC’s Jim Cramer on Tuesday that about 50% of the burrito maker’s avocados come from the country.
“Our supply chain team has done a remarkable job over the past couple of years with vendor diversification across all ingredients, specifically avocado,” Boatwright said. “We’ve moved into other countries of origin, like Peru, Dominican Republic, as well as Colombia. And today, only about 50% of avocados are sourced from Mexico.”
President Donald Trump over the weekend slapped a 25% tariff on imports from Mexico. But on Monday, he postponed the levies for a month and said he would continue to negotiate with the Mexican government, after officials agreed they would send more troops to the border in an effort to prevent drug trafficking. Boatwright conceded that what these tariffs mean for the food supply remains “top of mind” for many.
Chipotle posted its quarterly report Tuesday after close, beating on earnings and meeting revenue expectations. However, investors were disappointed by the chain’s same-store sales forecast for 2025, and shares dipped more than 5% in extended trading. The company reported that food, beverage and packaging costs rose this year, largely because it “focused on ensuring consistent and generous portions,” the success of its limited smoked brisket protein offering, and “to a lesser extent, inflation across several items including higher avocado and dairy costs.”
Boatwright said Chipotle opened 304 new restaurants last year, a record number for the company. He explained that a new artificial intelligence assistant launched in partnership with software outfit Paradox, known as “Ava Cado,” helps Chipotle hire the staff needed for these new locations. Once an applicant applies through Chipotle’s digital system, Boatwright continued, the AI assistant asks them initial questions and schedules an interview with the general manager.
“We leaned into AI hiring assistant by Paradox about six months ago that has put us on better footing from a staffing perspective,” Boatwright said. “And we’ve been, in the eight years I’ve been in the organization, pushing past numbers we thought were all-time highs just last year.”
