SAN FRANCISCO – Whether at Tacolicious in downtown Palo Alto or at one of their three other locations in San Francisco or Los Angeles, Fernando Guzman says they go through a lot of avocados every day.
“We process about a thousand avocados,” he says. “Ninety percent of the volume of avocados goes to guacamole. That’s a lot of guacamole.”
So if there’s a problem with global offerings, Guzman, the restaurant group’s culinary director, says they feel it.
“The fewer avocados there are on the market, the more expensive it becomes,” he says.
Last week there was a problem in Mexico’s most important avocado domain, the state of Michoacan. According to a memo from U.S. Ambassador Ken Salazar, two USDA employees were attacked and detained while inspecting avocados there. They have since been released, but the US has halted inspections of avocados and mangoes for a week.
Only on Friday did Salazar say inspections would gradually resume.
“It will be a long time before we see the market normalize again,” Guzman said. “We don’t know how high they will go this time.”
Professor Daniel Sumner, an expert on agricultural and resource economics at UC Davis, says consumers may see a price difference when they go to the market.
“I wouldn’t be surprised if they were a little more expensive in some markets and not in others,” he said. “Earlier is more likely, just because they are rationing this disruption.”
Prof. However, Sumner doesn’t think this scenario will have a major impact on consumers dining out. It will impact restaurants that have to buy avocados in bulk, he says.
“Certainly, people in the industry have already noticed and have already made their plans and are already making adjustments,” he said. “Given that it was a week, there were supply-side effects.”
Guzman says the adjustments at Tacolicious will not include price increases. “No, we’re just covering the costs,” he said.
He says they’re bracing for smaller margins, but in this scenario that’s just the cost of doing business.
“We have never raised our prices when avocado prices rise,” he said. “I don’t think demand will decrease. People will still enjoy their avocado toast and their guacamole.”
