How Food and Drink Brands Can Soften the Impact of Trump’s Tariffs
President Donald Trump’s tariffs add new complications for US grocery shoppers, who are already tired of high food and drink prices. If President Trump’s proposals for tariffs become a reality, food and drink companies as well as retailers will need to justify any price increases, while maintaining an agile approach to their supply chains as they navigate the latest policy changes.
These tariffs will directly impact food and drink prices and supply, especially with the commonality of imports from Canada and Mexico. As of Monday (Feb 3rd), Canada and Mexico have reached a deal with the US to delay the tariffs for 30 days. Canada’s prime minister, Justin Trudeau, said tariffs on his country’s goods would be postponed as negotiations on a border deal take place. Mexico negotiated a similar delay by agreeing to send thousands of troops to the US-Mexico border.
Brands will need to prepare transparent and compassionate communication regarding the reasons for any consumer-facing adjustments. Clear communication is important to avoid drawing the ire of US consumers who are weary of having to adjust to new disruptions.
US consumers already feel like they have been unable to escape high prices. Any additional price hikes – no matter the cause – will be unwelcome by US consumers who are already worn out from years of higher cost of living, especially food and drink.
Consumers will feel the impact of tariffs
In his first term, President Trump used tariffs as a tactic to start negotiations with other countries. Thus it’s possible that the long-lasting tariffs could be less extreme or more specifically directed at industries where the US seeks a competitive advantage, such as technology or green energy.
Yet, as seen during the first Trump administration, tariffs raise prices on other necessities and strain consumers who are already feeling pinched. US consumers have found money-saving swaps in the past few years, but additional price hikes from tariffs would limit their options for low-cost food and drink alternatives. Higher living costs would be especially hard on the 27% of US consumers who describe their financial situation as tight, struggling, or in trouble. Higher prices also would limit the leftover money the 36% of US consumers who classify themselves as OK have each month.
Supply chain transparency
Tariffs also could cause brands to seek new sources for ingredients, packaging materials and imported products. Mintel’s 2025 Global Food & Drink Trend Chain Reaction predicted supply chain shifts and recommends brands encourage consumers to be open to new origins, ingredients, and other alterations that arise because of readjusted supply chains.
The current inflationary environment has made many US shoppers keenly aware of food and drink prices. Many shoppers will be quick to call out and question the reasons for higher prices whether they are from geopolitical causes like tariffs or not.
Cost-conscious shoppers will be more willing to accept a change in origin, formulation, or packaging if it is made to maintain pricing. Brands also can share other benefits of domestic production, such as Latin American beer brand Presidente’s note that it is “brewed in the USA for a fresher taste.” As seen during COVID-19, brands and retailers that are not impacted by tariffs can explain how their US business practices benefit people and the domestic economy.
What we think
Be open with consumers: Food and drink brands should prepare to be transparent and empathetic with consumers if tariffs cause any increases in price or adjustments in the usual supply chains for ingredients, packaging materials, or imported products.
Tread carefully with price increases: With more than half of US shoppers feeling impacted by high food and drink prices, retailers and brands must be strategic about any price increases related to tariffs. Maintain low costs on household essentials that are impacted by tariffs; while more price flexibility may be available for premium, non-essential imported items.
Explain any changes due to supply chain issues: If tariffs cause brands to find new origins, ingredients, or packaging, follow the recommendations from Mintel’s 2025 Global Food & Drink Trend Chain Reaction and be honest with consumers about the changes and the reasons they were enacted.
Other news from the department business & finance
