Avocado shortage, record prices hit Chicago businesses

Taqueria Los Comales, like many other Chicago restaurants and retailers, has an avocado problem.

Because of a supply shortage this summer, the family-owned restaurant chain has had to pay a premium for the popular menu item in recent weeks, shelling out close to $100 for 48-count cases of avocados that usually sell this time of year for between $68 and $72.

"We can afford to lose a little profit, but we can't take it on the chin all summer," said Christina Gonzalez, manager of the Little Village location and daughter of Camerino Gonzalez, who founded the company in 1973.

"What do you do if you're a Mexican restaurant? Do you not serve avocado?"

Soaring avocado prices throughout the U.S. — largely a result of crop shortages in Mexico and California — have forced tough questions for Chicago-area businesses selling the fatty green fruit to consumers who can't seem to get enough. Shoppers likely have noticed steeper prices in stores and, possibly, smaller portions or fewer options at restaurants. It's not clear when prices could return to normal.

"Prices have gotten stupid and the main reason is prices are this high and people are still buying," said Peter Testa, president of Testa Produce, one of Chicago's longtime produce wholesalers.

The majority of avocados sold in Chicago come from Mexico, Testa said, and the Mexican producers may be reluctant to ease off the shortage-inflated prices because the demand remains so high.

As of Wednesday, the average wholesale price for a 48-count case of avocados was $83.75, more than double the $34.45 for the same time last year, according to the data from the American Restaurant Association. That's also the highest figure on record since the restaurant industry group began tracking the data in 1999.

Chef Rick Bayless, who opened Frontera Grill more than 30 years ago and now oversees 13 additional restaurants, said he tries to balance such price hikes on ingredients throughout the year instead of passing them onto customers.

"Occasionally, when an ingredient goes really high, we will figure out ways to use less of it (stop using it as a garnish or stop offering two guacamoles on the same menu, for instance), just to put less pressure on maintaining a sustainable food cost," Bayless said in an email.

Gonzalez, of Taqueria Los Comales, said she was temporarily pulling avocado from the menu this weekend until they can determine how to better address the pricing spike, a stopgap measure she's also recommending for the chain's other 13 locations, some of which are owned by other family members.   

One possibility is to mix in avocado pulp with fresh avocados to cut back on costs, she said. But they’re reluctant to raise prices. 

"We are hoping to weather this hurdle before taking such a drastic measure," Gonzalez said.

Speaking of weather, both Gonzales and Testa said they were concerned that weather from Hurricane Irma, currently bearing down on Florida, could further affect the avocado supply chain in both Mexico and Guatemala.

"It's not a good time to be in the produce business," Testa said. "It's good if you're making umbrellas."

The avocado shortage has also hit grocery stores.

At Pete's Fresh Market this time of year, avocados are usually on sale for two for $1 or three for $2. Not this year. Instead, smaller avocados are selling for $1.29 a piece and larger avocados cost $2.89, said Steven Sotirakopulos, one of the grocery chain's produce buyers.

Pete's Fresh Market is paying twice as much as it usually does for those avocados, Sotirakopulos said. And as a result of the higher retail prices, sales volume is about half of what it was just four months ago, he said.

"We can't make our normal markup because of inflationary pressures, but people still want their avocados. ... We're selling them as cheap as we can, put it that way," Sotirakopulos said.

Mary Bergen, an avocado grower in Ojai, Calif., said this has been one of her worst years in terms of output. Bergen typically produces about 8,000 pounds of avocados per acre on her 100-acre Rancho Dos Rios farm. This year will be closer to 1,000 pounds per acre, she said.

Avocados are a fickle crop, she said. One year is bust; the next year, boom.

A heat wave during the blooming season was the culprit for this year's disappointment, which was in lockstep with the underwhelming season experienced by many California growers, she said.

On the bright side, at least from a farmer's perspective, there's no shortage of demand to help offset the exorbitant costs of doing business.

"People wouldn't buy them at this price if they didn't love them," Bergen said. "That's the really hopeful part."

gtrotter@chicagotribune.com

Twitter @GregTrotterTrib

Copyright © 2017, CT Now
57°