### **Tariff Tactics: How Food Brands Are Navigating Rising Costs**
The food and beverage industry has found itself on the frontlines of an unexpected battle: rising **tariffs**. With imports facing hefty price increases, brands are forced to rethink their strategies in order to survive. Some companies have adapted, while others are struggling to keep their heads above water. But how are these businesses managing to keep their brands intact during such turbulent times?
#### **The Tariff Impact: A Shockwave Across the Industry**
When former President Trump raised **steel and aluminum tariffs** to an astounding 50%, the repercussions rippled through every corner of the food and beverage sector. The immediate fallout? A stark divide among brands.
– **Coca-Cola**, for example, cleverly circumvented skyrocketing metal costs by shifting much of its beverage production from **cans to plastic bottles**. On the flip side, companies like **Campbell’s** and **Hormel**, which heavily rely on canned goods, faced severe challenges as tin prices soared—leaving no quick escape route from those increased costs.
As tariffs on ingredients and packaging from trade partners like **China**, **Canada**, **Mexico**, and the **European Union** rolled in, the pressure intensified.
> “If you’re importing ingredients or products from overseas, you’re feeling it in your margins already,” said Joe Camberato, CEO of **National Business Capital**.
**Almost 60%** of business leaders signal that their operations are experiencing significant strain due to the tariffs. An **Endeavor Business Intelligence** survey revealed that over **one-third** of these leaders indicate operating costs have surged by at least **10%**.
#### **The Market Response: How Prices Are Shifting**
As **packaging** costs climb, food producers understandably raise their prices. Retailers then pass these increases onto consumers, leading to reduced demand and ultimately causing farmers to cut back on production.
Importers, eager to beat the clock on fresh tariffs, often flood ports, creating a chaotic environment where shipping delays can wreak havoc on supply chains.
> “Tariffs cause immediate cost increases at the sourcing level, triggering a chain reaction through manufacturing, distribution, and retail,” said Jake Hyten, CEO of **Superior Supplement Manufacturing**. “Ultimately, consumers feel the pinch through higher prices and diminished product availability.”
#### **Upcoming Challenges: Tariff Trouble Ahead**
The looming threat of tariffs continues, suggesting widespread implications for industries.
> “These ripple effects often compound across the supply chain,” noted Tarun Chandrasekhar, Chief Product Officer at **Syndigo**. “An upstream change in ingredient sourcing might trigger delays, disrupting distribution and leading to retail out-of-stocks, ultimately eroding brand trust.”
This trade turmoil is reminiscent of the tense U.S.-China relations from 2018-19, with some experts claiming this is the most intense trade conflict since the **1930s**.
**So, what can brands do to dodge the fallout from these fluctuating tariffs?**
> “You’ve got to stay ahead of it,” emphasizes Camberato. “Know your numbers, watch your margins, and be prepared to adjust your pricing.”
### **10 Secrets to Thriving Amid Tariff Uncertainty**
Experts share a wealth of strategies for navigating tariff-induced challenges:
1. **Diversify your supplier base**
2. **Build relationships with alternative suppliers**
3. **Secure multiple supply routes**
4. **Source locally whenever possible**
5. **Narrow product assortments to manage risk**
6. **Utilize free-trade zones to defer duties**
7. **Explore alternative materials for packaging**
8. **Embrace analytical tools**
9. **Leverage AI and predictive technology**
10. **Establish a robust data foundation that keeps all partners informed**
### **Looking Ahead: Preparing for the Future**
In this challenging climate, **2025** presents an opportunity for food and beverage leaders to get creative.
> “There’s a science to classifying items for imports to avoid tariffs,” explains Amrita Bhasin, CEO of **Sotira**. “Companies are likely to explore substitute materials or hybrid solutions to categorize imports in ways that incur lower tariffs.”
However, with tariffs expected to persist into **2026**, brands must remain vigilant.
Meyer states, “Current uncertainty in trade policy suggests that these tariffs aren’t going away quickly.”
Supply chain dynamics in the food and beverage sector have always been fluid. Now, as Frank Kenney, Director of Industry Solutions at **Cleo**, points out, businesses are left toggling between volatility and opportunity.
> “With tariffs like changing weather fronts, companies must swiftly adapt to shifting implications or risk alienating consumers.”
It’s clear: **strategizing quickly** is no longer optional. The real cost of tariff volatility isn’t just delayed shipments; it’s the potential for frustrated customers and the erosion of trust that brands cannot afford to overlook.
### **Stay Informed: Listen to The Food Institute Podcast**
Dive deeper into the nuances of food economics and consumer behavior by tuning into **The Food Institute Podcast**. Learn about **channel differentiation**, consumer product selection, and key macro trends from industry leaders like Nik Modi of **RBC**.
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As the food industry navigates these challenging waters, ingenuity and flexibility will be paramount. The brands that harness their strengths and stay informed will not just survive—they’ll thrive in the era of tariffs.
