Tariffs have become a defining factor in global trade this year, and food companies are among the hardest hit. From rising input costs to disrupted sourcing strategies, the burden of tariffs is reshaping how food manufacturers, processors, retailers and distributors operate their businesses and, ultimately, their supply chains.
Nearly 60% of business leaders say their operations have already been significantly affected by new tariffs imposed by the Trump administration or by U.S. trade partners responding to those measures, according to a survey recently conducted by Endeavor Business Intelligence. The survey also revealed that more than a third of business leaders say their operating costs have jumped by at least 10%.
Such is the case with J.M. Smucker, the food and beverage company that is raising coffee prices again in the face of tariffs J.M. Smucker says it is planning a hike for “early winter” that would make coffee over 20% more expensive than a year ago.
Smucker purchases 500 million pounds of unroasted coffee beans annually, mainly from Brazil and Vietnam. Imports from the two countries face total U.S. tariffs of 50% and 20%, respectively. Other than its coffee, J.M. Smucker sources most of its U.S. production domestically.
Many food companies are experiencing an impact in three key areas of their business strategies: Purchasing, Supply Chain, and Go-To-Market Strategies. Let’s take a closer look.
One of the most immediate effects has been increased costs for raw materials and ingredients. Many food companies rely heavily on imports for items, ranging from soybeans, corn derivatives and specialty ingredients to packaging materials. When tariffs are imposed, these imports can become more expensive, squeezing already thin margins. For food companies in highly competitive markets, passing those costs onto consumers can carry a risk, leading to difficult trade-offs between generating profits and retaining market share. It’s imperative to carefully evaluate a path forward in the wake of tariffs before reacting.
Levies appear to have a potential impact on nearly every industry player in the coming weeks.
The ripple effect of tariffs also disrupts supply chain flexibility. Food companies thrive on sourcing options that balance cost, quality, and reliability. Tariffs, however, force companies to shift suppliers, restructure contracts, or increase reliance on domestic sources that may be more costly or less available. These adjustments complicate long-term supply planning and make operations more vulnerable to additional shocks.
Some key supply chain areas that can be impacted include:
Higher Input Costs. Tariffs make imported raw materials, components, or finished goods more expensive. Companies must decide whether to absorb the added costs, pass them to consumers, or cut costs elsewhere.
Supplier Disruption & Realignment. Long-standing supplier relationships can become less viable if tariffs make sourcing from certain countries too costly. Also, food companies may be forced to find new suppliers, shift to domestic sourcing, or diversify to multiple regions.
Inventory & Production Planning Challenges. Sudden tariff changes can trigger stockpiling before increases, followed by shortages. For food manufacturers in particular, such changes may adjust production schedules, which disrupts logistics and warehouse operations.
Increased Supply Chain Complexity. Businesses may need to redesign supply chains strategies around tariff “workarounds,” such as assembling goods in non-tariff countries. This can increase (and complicate) compliance documentation and customs requirements.
Global Competitiveness Pressure. Retaliatory tariffs from trading partners can reduce demand for exports. U.S. producers may face surpluses domestically and shrinking international markets.
Strategic Shifts. Companies invest more in nearshoring, reshoring, or regional trade agreements to reduce tariff exposure. For many, long-term supply chain strategies now often include tariff resilience as a core element.
Tariffs further hinder global competitiveness. U.S. food exports—from meat to dairy to packaged goods—face retaliatory tariffs in foreign markets. This reduces demand overseas and can create surplus inventories at home, driving down prices domestically and hurting farmers and processors alike.
Several specific examples highlight these impacts:
Meat processors have faced retaliatory tariffs on beef and pork exports to China, reducing international demand and creating oversupply in U.S. markets.
Dairy producers have seen tariffs sharply reduce sales in key markets such as Mexico and Canada, pushing them to seek new buyers in less traditional regions.
Consumer packaged goods companies have dealt with higher input costs for aluminum cans and imported ingredients, forcing them to absorb costs or reduce margins.
To mitigate these challenges, many food companies are rethinking their supply chain strategies. Some are diversifying supplier bases to reduce dependence on tariff-impacted regions. Others are investing in automation and process efficiencies to offset cost increases. A growing number are exploring nearshoring options to stabilize supply while reducing exposure to trade disputes.
Still, the long-term impact is clear: tariffs are no longer a short-term policy issue but a structural challenge. For many food companies, this means integrating tariff resilience into every level of their business strategy — from procurement to production to transportation and distribution. The industry’s ability to adapt will determine not only profitability but also its role in feeding a global population under constant economic and geopolitical pressure.
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