US Tariff Hikes: Current Trends in Food and Beverage Industry

The current trends in the food and beverage industry aren't just about consumer preferences or new product innovation, they're about protecting profitability.

In 2025, sweeping US tariffs have created the most complex trade environment F&B brands have faced in decades. Imports from Canada, Mexico, China, and over 60 other nations now carry steep duties, with some rates exceeding 60%.

The impact? Food prices could climb 25%, and nearly half of all supermarket products face cost pressure. This post unpacks where tariffs are hitting hardest, how they're disrupting inventory and accounting, and what you can do now to protect margins.

The current US tariff landscape for food and beverage

The 2025 tariff environment is broader, steeper, and more complex than anything F&B brands have faced in decades:

• Universal baseline tariff: A 10% universal baseline tariff applies to most imports, with higher reciprocal tariffs stacked on top for over 60 nations
• North American impact: While USMCA maintains exemptions for some agricultural goods, tariffs of up to 35% are in place for certain non-exempt imports from Canada and Mexico, two primary F&B trade partners
• Country-specific rates: Rates are punitive for major global suppliers: China (up to 26% and higher on certain products), Vietnam (46%), the EU (20%), and Japan(24%)
• Packaging tsunami: Critically, Section 232 tariffs on steel and aluminum have been expanded and increased to 50% for steel and 50% for aluminum, severely impacting packaging costs

Partial relief was announced in November 2025 for certain agricultural imports, but many processed inputs, additives, and packaging materials remain excluded.

For food and beverage brands operating across borders, tariffs are no longer an occasional disruption, they’re now a structural cost factor.

Where food & beverage brands are feeling it most

Tariffs are not just affecting primary ingredients; they are causing inflation across every touchpoint of F&B production:

Bonus Read: The 2025 Tariff Tsunami: What eCommerce Sellers Need to Know (and How to Stay Profitable)

Inventory cycle reality check

Traditional inventory management models weren't built for tariff volatility. Just-in-time strategies that worked in stable trade environments are now creating exposure, while attempts to buffer stock tie up working capital and warehouse space.

Several factors are compounding the challenge:

• Perishable limitations: Unlike durable goods, F&B products can't be stockpiled indefinitely to hedge against tariff increases
• Extended lead times: Stricter border inspections and custom delays are stretching timelines
• Outdated calculations: Reorder points and safety stock formulas based on pre-tariff conditions no longer reflect reality
• Cash flow pressure: Inventory hoarding and longer border delays are tying up cash and reducing operational flexibility
• Accounting blind spot: Outdated safety stock calculations are masking true costs in the books

The result? Many F&B businesses find themselves either over-exposed to tariff-heavy SKUs or tying up capital in buffer stock that may not fully protect against cost volatility.

Inventory cycle adjustments- What to do now

Proactive inventory management is essential in this environment:

1. Audit current inventory mix: Immediately identify SKUs with the highest tariff exposure (e.g., those using aluminum, Chinese ingredients, or Mexican/Canadian non-exempt imports).
2. Recalculate reorder points: Factor in the new reality of longer lead times and potential customs delays to avoid costly stock-outs or expedited shipping fees.
3. Prioritize Domestic/USMCA suppliers: Aggressively shift sourcing where feasible, leveraging domestic or lower-tariff USMCA-exempt suppliers.
4. Negotiate flexible terms: Work with international suppliers on pricing locks, volume commitments, or cost-sharing agreements for new duties.
5. Reduce SKU complexity: Consolidate around tariff-resilient products, simplifying production to regain control over rising COGS.
6. Improve demand forecasting: Tighten projections dramatically to avoid overstocking tariff-heavy items, which drains working capital.
7. Monitor landed costs in real time: Do not rely on estimates. Monitor landed costs continuously, not just at month-end, so margin erosion is visible early. This is where automation becomes essential.

Also Read: US tariff impact on ecommerce in 2026: Inventory cycles that reduce risk

Top 5 tariff-resilient food & beverage product ideas

As brands evaluate their portfolios, certain product categories offer more protection against tariff volatility:

1. Shelf-stable, domestically sourced foods (lower import dependency)

Products with long shelf lives and primarily US-based inputs are far less exposed to tariff volatility.

Why they work:

• Minimal reliance on imported ingredients
• Easier to hold buffer inventory without spoilage risk
• More predictable landed costs

Product examples: Gourmet dry pasta made from US wheat, specialized spice blends using domestically grown herbs, American-made cooking oils (e.g., soybean, canola) with minimal imported additives, and nut butter using US-grown peanuts or almonds.

Margin advantage: Stable sourcing makes COGS easier to forecast and protect.

2. Dry goods & mixes with flexible ingredient sourcing

Dry mixes give brands sourcing flexibility, ingredients can be swapped or blended without disrupting the product.

Why they work:

• Ingredients can be sourced from multiple regions
• Easier reformulation if one input becomes tariff-heavy
• Lower freight and storage costs

Product examples: Baking mixes (where cocoa or specialty starches can be sourced from non-tariffed regions like West Africa vs. China), protein powder blends (switching between domestic whey or USMCA-sourced pea protein), or seasoning packets using global-scale suppliers with diverse origin options.

Margin advantage: Ability to adapt BOMs quickly as tariffs change.

3. Functional beverages using US-based packaging

The 50% tariffs on aluminum and steel make packaging a major cost driver. Brands using domestic packaging suppliers, or alternative formats like glass, cartons, or pouches produced in the US, can avoid this exposure entirely while tapping into the growing functional beverage market.

Why they work:

• Using US-based cans or bottles avoids aluminum/steel tariff exposure
• Higher price points support margin absorption
• Strong demand supports selective price increases

Product examples: Ready-to-drink (RTD) coffees and teas packaged in US-manufactured recycled glass or sustainable paperboard cartons (Tetra Pak), rather than imported aluminum cans.

Margin advantage: Premium positioning + domestic packaging = better cost control.

4. Private-label staples with pricing flexibility

While private-label brands face margin pressure, those with strong retail partnerships and negotiated pricing flexibility can navigate tariff volatility better than brands locked into rigid pricing structures. The key is building tariff-adjustment clauses into contracts before costs increase.

Why they work:

• High volume offsets thinner margins
• Retailers expect periodic price adjustments
• Consumer demand remains strong even during inflation

Product examples: Commodity rice, beans, flour, or frozen vegetable blends (where a slight reduction in weight or a small, non-jarring price increase can cover the 10% baseline tariff) versus imported specialty cheeses or spirits that have rigid pricing.

Margin advantage: Predictable demand and the ability to renegotiate pricing more often.

5. Value-added products (bundles, subscriptions) that absorb cost increases better

Shift focus from single-unit sales to higher-value propositions, like curated boxes, subscription models, or product bundles, where the customer is focused on the perceived overall value rather than the unit price.

Why they work:

• Bundling masks, individual SKU cost increases
• Subscriptions improve demand predictability
• Stronger customer lifetime value offsets rising costs

Product examples: Meal kits featuring predominantly domestic ingredients but including one high-tariff specialty item; gourmet coffee subscriptions that bundle imported beans with US-made accessories; or "treat culture," affordable indulgences like small, premium snack packs.

Margin advantage: Higher average order value and smoother cash flow.

The hidden accounting risks tariffs create

Beyond supply chain challenges, tariffs create significant accounting complexity:

• Landed costs changing mid-month when tariff rates shift, or new duties are announced
• Inventory valuation mismatches when products ordered under one tariff regime arrive under another
• Multi-channel fee and refund complexity that already obscures true margins, now compounded by cost volatility
• Month-end close delays from manual reconciliation of orders, fees, and shifting costs

When cost data is fragmented across channels, spreadsheets, and accounting systems, you can't react quickly to margin erosion.

Why accounting automation matters in a tariff-volatile market

When costs move fast, the brands that win are the ones that can see true COGS and margins quickly, by SKU and by channel.

Webgility is built for this kind of operational reality: it automates ecommerce accounting workflows, so finance teams can stop chasing mismatches and start managing margin.

Skinny Mixes, a fast-growing food and beverage brand known for zero-sugar syrups and flavorings sold across multiple ecommerce channels. As order volume surged, the team struggled with manual reconciliation, delayed closes, and limited visibility into true margins across channels.

By automating ecommerce accounting with Webgility, Skinny Mixes :

• Order volumes increased 75% year over year after automation
• They were doubling online revenue year over year
• They added over $3M in annual revenue, and recovered 19% of abandoned carts

While that story isn’t “about tariffs,” it is directly about what tariffs amplify: the need to keep books clean and margins visible while order volume grows and costs fluctuate.

What Webgility helps with (in tariff conditions)

• More accurate channel-level reconciliation of orders, fees, refunds, and payouts (so margin doesn’t get distorted)
• Cleaner syncing into accounting systems (e.g., QuickBooks) so inventory and revenue reporting stay dependable
• Faster closes because fewer issues accumulate for the month-end triage

What to do next, a practical checklist for F&B leaders

Tariffs aren't just a supply chain issue, they're a financial visibility issue. Here's how to get ahead:

☐ Identify tariff-exposed SKUs and inputs: Map your product portfolio against current tariff schedules
☐ Audit inventory valuation and landed-cost processes: Ensure your systems can handle changing cost bases
☐ Stress-test margins by channel and SKU: Understand where you're most vulnerable before costs increase
☐ Diversify supplier relationships: Build connections with domestic and USMCA-compliant vendors as backup options
☐ Review packaging materials: Evaluate alternatives to tariff-heavy aluminum and steel where feasible
☐ Renegotiate contracts: Add tariff-adjustment clauses to supplier and retailer agreements
☐ Improve accounting visibility: Automate data flows between sales channels and accounting systems before tariffs force reactive decisions
☐ Set up real-time margin monitoring: Use tools like Webgility to catch cost erosion early, not at month-end

Winning the margin war: Strategy over reaction

In 2025, current trends in food and beverage industry operations have shifted from growth at any cost to disciplined growth. With US tariffs at historic highs, brands can’t run on supply chain autopilot.

The winners aren’t just reacting, they’re redesigning cost structures by diversifying USMCA suppliers, reformulating to reduce tariff exposure, and choosing lower-duty packaging.

The key is connecting supply chain decisions to financial reality. Tariffs move fast, so your cost and margin visibility must move faster. Tools like Webgility help automate accounting and track landed costs in real time, so you can protect margins and keep delivering value.

Ready to gain real-time visibility into your margins? See how Webgility helps food and beverage businesses stay profitable when costs keep changing. Book a demo today!

FAQs

Why are US food prices increasing?

Prices are rising due to a combination of historic 2025 tariff hikes, increased labor costs, and higher domestic production expenses.

What industries will be most affected by US tariffs?

Food and beverage, automotive, electronics, and manufacturing are among the hardest hit due to heavy reliance on imported materials and components.

What are the tariffs affecting in the US?

Tariffs are impacting imported ingredients, aluminum and steel packaging, specialty beverages, private-label goods, and nearly half of all supermarket products.