Food industry executive here. Tariffs are about to change everything, AMA.

r/

Trump’s “Liberation Day” tariff announcement shook the foundations of our supply chains in unprecedented ways.

Contrary to his claims that the exporting countries pay tariffs, the fact is that the US importing companies pay the tariffs, and the cost is ultimately passed on to us as consumers.

Even the “baseline 10%” tariff is not a small number; it adds up quite a lot once all the parties, like distributors and retailers, apply all the margins.

Most products are imported and used as ingredients in “Made in the USA” products.

This is also true for all other industries, not just food.

Once Trump was elected and entered office, our industry stocked up heavily. We are depleting older inventory, and new inventory is affected by the tariffs across the board, which means inflation and shortages are about to explode.

This is relevant for the US.

AMA.

Edit: The AMA is closed. I will occasionally check on this post and answer questions, and I plan to do a follow-up AMA in 2-3 months.

Comments

  1. ny10019 Avatar

    Any idea what food groups in particular will be first to be affected?

  2. 1Xeverythingx1 Avatar

    If the tariffs get pulled off, how much damage is already done?

  3. InTupacWeTrust Avatar

    How much is the new inventory compared to your older inventory?

  4. Longjumping_Baby_955 Avatar

    What are you stocking up on before the prices go bananas?

  5. GabeDef Avatar

    Is the food industry concerned that consumers will cut back even further? Are states like California being asked to keep their growth for domestic consumption instead of shipping 68% of their growth to overseas markets?

    *EDIT: my embarrassing spelling mistakes – sorry!

  6. lahs2017 Avatar

    When might we start seeing the price increases?

  7. er3019 Avatar

    If the tariffs ever go away, will the prices come back down?

  8. Classy_Moose Avatar

    How soon do you expect us to feel the pain and what would you recommend we stalk up on now?

  9. RoundGround79 Avatar

    How soon will we feel the full negative effects as they relate to your industry?

  10. Somnisixsmith Avatar

    When do you anticipate consumers seeing empty shelves?

  11. Wide_Breadfruit_2217 Avatar

    Have you seen any signs that hotter places like California are ready to get into the tomato, pepper etc crops more? To make up for mexican produce production?

  12. AteRealDonaldTrump Avatar

    Why were prices higher increasing so much in 2022/2023 while your industry was also making record profits? From the outside it seems like the industry is looking for reasons to make huge profits for any reason. Raising prices on regular people just to continue those record profits is unethical, don’t you think?

  13. OutinDaBarn Avatar

    Does your organization plan on spelling out the tariff costs on products? Much like Amazon was talking about doing. People need to be more aware of why the price has increased.

  14. InternalEnvironment Avatar

    Knowing what you know, what are you doing to prepare personally? What do you think the average consumer should do right now?

  15. Maricaid Avatar

    What produce is the average American able to grow that will be heavily influenced by tariffs?

  16. Iwentforalongwalk Avatar

    Have you been trying to talk to politicians to get this madness stopped? Whats their response?.

  17. PODNJPE Avatar

    Will grocery store produce be affected due to most coming from South America?

  18. en-rob-deraj Avatar

    Are your margins going down or your profit margin percentage will stay the same?

  19. ProfX1987 Avatar

    What part of the industry are you in (i.e. distribution, manufacturing, brokerage)? I know this isn’t directly a tariff question but it would be informative to know where your perspective is coming from.

  20. Lingotes Avatar

    Have you hugged your trade compliance and import/export folks lately? If not, go give them a big hug. They are having a bad time.

  21. BidetEnjoyr Avatar

    Getting a lot of no shit common knowledge answers here.

    Pertaining to your position, can you tell us something new that we would benefit from knowing right now?

  22. Remote_Independent50 Avatar

    Will there be any positive effects of the tariffs?

  23. R3b3lAllianc3 Avatar

    Have you thought about anonymously leaking things to the media that prove this was directly caused by the man at the WH and his tariffs? Maybe leave a paper trail then.. leak

  24. Simple_Performer_303 Avatar

    Read the public annual reports. Three very large CPG manufacturers reported going into Q4 that volumes themselves were falling. Thoughts on this?

    I believe the only thing truly staving off a recession is the pricing action taken at this point. The recession is already here. Do you feel the same?

  25. spoildmilk Avatar

    How different will this be from the supply chain issues experienced during Covid? Do you have recommendations on how consumers can best prepare?

  26. Successful-Speaker58 Avatar

    Building materials here, 30 days from now we start increasing our prices, by the time it runs through everyone who has their hands on it the increase is gonna be 30-40%

  27. Hrbiie Avatar

    What are you personally stocking up on right now?

  28. XanaduRobot Avatar

    From a retailer perspective, comp sales are down and I think Tariffs are one part of a bigger problem. For example, McD releases show mid and low income earner sales are down, margins have been tight since the pandemic and immigrants are currently actively being deported in the US. We are already witnessing pullback from multinational brands and shrinkage with stores closing but the stockmarket is rallying. I do not believe tariffs are just rhetoric and along with our isolationist plans we will experience not only shortages but hunger.
    With hunger will come compliance and a willingness to work in currently not in existence (yet) company towns. As an industry expert do you feel companies will be able to weather these changes? Or do you think there will be foundational changes to restaurant retail and consumerism that will creep in so gradually we won’t even realize.

  29. thebrocktomb Avatar

    I run a couple boba tea shops in LA. All of our ingredients are sourced from Taiwan….my CoGs are fucked cause these dumbass tariffs.

  30. Unkindness0fDragons Avatar

    What should we do to prepare? Us living day to day and needing food, that is.

  31. BumperSticker00 Avatar

    How bad are you estimating the shortage in grocery stores will be?

  32. shivaswrath Avatar

    So we all got a wage drop of 10%?!

    So much winning!!!

  33. ionaarchiax Avatar

    Kinda sucks that bananas and avocados are going to be more expensive. I was hoping Mexico would be exempt.
    They got good organic stuff.

    Other than that, I can’t think of anything else.

    What else?

  34. xra335 Avatar

    Remember when the airlines blamed high fuel prices on the airlines as the reason to began charging for bags, fuel cost came down, never dropped bag fees. This will be the same across all industries.. covid car prices ever drop, nope!! It’s greed by corporations and them blaming someone else for it, this time the government is the fall guy..

  35. EventHorizon1003 Avatar

    We all need to rise up. Stop buying stuff you don’t need. How much more are the American people going to put up with? There needs to be a revolution. 

  36. amabama04 Avatar

    You may have already answered this, but what items do you see that will be most impacted from the tariffs?

  37. Holden22560 Avatar

    Non tariff question.
    What is the implication of cuts to the FDA and USDA? What do you think will happen in the near- / medium-term and how do we mitigate against this?

  38. Wazootyman13 Avatar

    Are there really people dumb enough to think other countries pay the tariffs??

  39. Shew73 Avatar

    What size company do you work for? Are you a multi-national or more of an “Expo West” kind of manufacturer? Are you at liberty to disclose which categories you work in?

  40. checkmyair2 Avatar

    What products are you seeing the most tariffs on? What country of origin?

  41. Skiingfun Avatar

    Americans don’t understand how hard the impact from Canadians simply abandoning the US will hit.

  42. gmoneyyyyyyyy Avatar

    Fellow food industry pro here. Can you share what your employees are being told about this? What is the general sentiment internally?

  43. Beepbeepboop9 Avatar

    wtf is a food industry executive? You’re the manager? or…?

  44. Patient-01 Avatar

    And yet no one bother to educate certain people how it works.

  45. Upstairs-Storage-548 Avatar

    Are there products you think wont be affected? Produce?

  46. Long-Blood Avatar

    Why did people with business backgrounds vote for this guy if they knew he was going to do this shit? He said he was going to do it, so why vote for him?

  47. Richyrich619 Avatar

    Its insane 3x price for saltines compared to store brand. I used to love diet dr pepper and go through 3 12 packs in a month. 14.50$, Its 20$ now at costco.

  48. Banp2014 Avatar

    What stocks to buy or avoid?

  49. Zealousideal-Pay4248 Avatar

    I’m in distribution, you’re not wrong. It’s coming!

  50. stupidhobbits1 Avatar

    If tariffs aren’t repealed in this administration do you think it’s likely they’ll be repealed next administration regardless of who’s president or do you believe we’re in this for the long haul?

  51. Defiant_Dickk Avatar

    Is it really as bad as you’re implying? Or is this all sensationalized?

  52. NumberMuncher Avatar

    Any food products that will be weirdly unimpacted?

  53. expsg18 Avatar

    Remember, some of you voted for this. Enjoy.

  54. Ephendril Avatar

    Have you seen any direction on how the tariffs have to be paid? I imagine going from no tariff to tariff is a drastic admin change

  55. Adrasto Avatar

    I saw you specified “USA”, however, I was wondering if you could also tell how you think those tariffs can influence the European market. Thanks for doing this AMA, really interesting (and sad), to read.

  56. 58G52A Avatar

    I’m also a food industry executive. I can tell you that deporting a big chunk of our food workers is already resulting in labor shortages, increased labor costs, and higher food prices on top of the tariffs.

  57. Captain-Comment Avatar

    Are the food warehouses going to start getting less food delivered?

  58. movieperson2022 Avatar

    I can’t believe I’m asking this, but I need hope… is there going to be any consumer benefit at any point? I know the president claims “short term pain for long term gain,” but I don’t think history (or your answers) bears that out. Realistically, is there any positive in the horizon for — especially low income — Americans as buyers? From my study of this, the answer is no, but hoping you have some “from within the industry” insights.

  59. IllI____________IllI Avatar

    Chiming on after AMA has ended; I work at a fairly prominent bar in my city, known for having a broad but very good selection of spirits. We’ve already gotten notified from our liquor reps that MANY of our staple back-bar bottles won’t be available anymore in as little as two weeks. The landscape of availability is going to change DRASTICALLY in this country in ways that people haven’t truly grasped.

  60. LastPosition6766 Avatar

    Respectfully, Milton Friedman may have a different take on why prices for everything are high. Gas prices, trade balances, high wages, manufacturers, etc do not produce inflation. Only government spending and the government’s printing of money causes in inflation. He would be against tariffs but not because of inflation.

  61. Dazzling_Sport1285 Avatar

    To this day, I’m still amazed at how most people still don’t know it’s the Americans paying for the tariffs, not the exporting countries.

  62. Cheap-Republic2995 Avatar

    Why are we even producing cars in North America? It is the one industty that we have held onto but we cannot compete with the quality of cars coming from overseas or the innovation. Why are we protecting huge corporations by paying more for a worse product?

  63. winnerchickendinr Avatar

    Not if the company does what’s right. Follow GM and eat the tariffs

  64. ContractNo1561 Avatar

    How will this effect a larger company like kraft heinz ?

  65. Shugginton Avatar

    How much longer do we have till prices shoot up? Sorry if this question was repeated

  66. Content_Sandwich6346 Avatar

    Is America winning yet though?

  67. Otherwise-Court-1715 Avatar

    Are you seeing any impact in food safety?

  68. flgirl-353 Avatar

    My small company exported 10×40’ containers monthly to China. All their orders were put on hold the very next morning the tariffs were announced. I am praying Vietnam and the Middle East continue to purchase our goods. Half our revenue comes from exports. Very stressful time.

  69. didled Avatar

    Be honest, how soon do you expect the average store to be barren?

  70. Ok_Exit9273 Avatar

    Will your team blame the price hikes on the tariffs (as jt should be) or will they claim other reasons. Consumers need to know why

  71. Big-Possession-5462 Avatar

    More of a comment than question. You all are complicit. You raised prices on food during the pandemic and never lowered them – all while reporting record profits.

  72. IcyAbbreviations1960 Avatar

    One of our suppliers imposed a 32% tariff a week ago

  73. jadejadenwow Avatar

    World economic forum 2030 “you will own nothing and be happy”

  74. scarier-derriere Avatar

    Are you concerned about famine or Americans going hungry?

  75. TotheMoonorGrounded Avatar

    When do the tariff related costs actually hit you on a calendar timing? I thought all the tariffs were effectively delayed till a future date

  76. wilburstiltskin Avatar

    The larger problem facing the food industry is who will pick the crops? Immigrants do most of the work in the fields because it’s difficult, hit, boring work.

    Just wait until June and fruit starts to ripen.

  77. Tsenios Avatar

    When do you thing will be the tipping point the inventories start depleting on average ? Are we talking days, weeks ?

  78. -Silky_Johnson Avatar

    Company specific wise this would be a win for costco no?

  79. TipperGore-69 Avatar

    In your opinion, why is this admin dead set on tariffs?

  80. BigPoppaJay Avatar

    I was planning late last year to open my food truck I’ve always wanted. Have the funding from my own savings and have wanted this a while. Paused all of that beginning of the year cause I can’t trust my own knowledge of food markets from the last ten years in the industry to carry forward. Shifted back to the junk resale market because this is a time when people shift their buying habits and tons of people strike out for necessities second hand. All in all the junk business is hot right now.

  81. Responsible-Test8855 Avatar

    Yet nobody I know is even attempting to grow a garden except for those who always have. I live in an apartment and have tomatoes and peppers in pots.

  82. notwyntonmarsalis Avatar

    How long do we have before we meaningfully feel the impacts?

  83. Moist-Golf-8339 Avatar

    Outdoor industry logistics manager here: tariffs are also about to tank the outdoor industry. I’m really not happy about the food industry having these issues, too. 😬

  84. Bobandaran Avatar

    Yeah I just got my first bill with a tarriff line item on it. Very cool, my prices have to go up. But people are saying tariff line items are the best line items, ask anyone. Many such cases!

  85. extralongusername420 Avatar

    Question: Do companies/grocery stores stop selling higher end products during a recession?

    I ask this question because I started noticing something odd: I live in a major US city in the Midwest, and I grocery shop at multiple different stores every week. The good cuts of beef at the local grocer and the seafood section at Costco have disappeared seemingly overnight. The generic brand sodas are suddenly on display where name brands used to be. It’s starting to feel very early 2000’s to me but maybe it’s just a coincidence. Let me know your thoughts!

  86. williamjamesmurrayVI Avatar

    The restaurant industry needs to die so it can be reborn as a functional system that doesnt put the burden of paying employees directly on the customer.

  87. No-Anywhere-7835 Avatar

    Locally owned Specialty retailer here (beverage) … we maintain our gross margins regardless of our cost from distributors, so our prices follow the cogs. Now, we had to raise our margins due to fixed cost escalation and labor wage increases that were driven by the low unemployment rate and COVID. Insurances up between 5-12%, triple nets the same, taxes up, utilities and professional services all up. We absorbed some of those and gave up 30% of our net profit margin to stay competitive with larger retailers. Do large retailers keep the margin, well their record profits might indicate so. They have scale, purchasing leverage, lobbyists and deep cash reserves to not only squeeze more from the consumer but to also suffocate independently owned and operated competition that cannot equal their resources in dollars, professionals and stamina. There are tangible and measurable reasons why locally operated retailers are marginally more expensive than the chains but I assure you price gauging is not one of them… we walk the same streets, attend the same schools, understand the community (and most care).

  88. ChickNuggetNightmare Avatar

    I am in another industry than food entirely, and can assure you THE EXACT SAME from other parts of our economy. I have the same overhanging anxiety cloud that I had at the beginning of covid. I have already told my employees to expect anything from hour cuts, to layoffs, to company closure. I feel like August will be the tipping point- where things will be obvious to US retail customers AND will have given us enough time to see how the market will react to the cost hikes; if we’re still profitable or I will need to make some hard and sad decisions.

  89. riggles1970 Avatar

    Have food industries thought about reducing packaging or looking at reusable packaging? I would think that we make very little of this in the US.

  90. miketierce Avatar

    Serious question is there room to absorb the impact in executive compensation or is passing the price to the consumer really the only way?

  91. One-Attempt-2710 Avatar

    I manage a very popular cafe for a chain / corporation.

    My cafe is a very high performing cafe compared to some of our other ones and I believe my bosses are already having to prepare to close stores and our slower stores are going to be the first to close, I think my cafe will probably be okay but I feel so bad for my colleagues.

    Our already expensive coffee will be seeing price increases over the next few months and a regular cup of drip if going to hit upwards of $6 for a small drip coffee…. any sort of milk based bar drink is definitely going start running about $7+ for a small with no modifications.

  92. jjgg89 Avatar

    What’s some of the solutions you have come up or work arounds? Is the no place in the states to get your stuff?

  93. Cautious-Box-8759 Avatar

    The two household food staples I can think of that are essentially 100% produced overseas are bananas and coffee. (Yes I know about Kona coffee, but that’s a specialty product and not a STAPLE) we can stockpile coffee and we have. There’s no way to stockpile bananas. How much price movement can we expect at retail?

  94. Surprise_Yasuo Avatar

    Ima be real, I don’t really trust folks in your position at all with the “greedflation” we’ve seen since Covid. We constantly hear corps having record profits but then still increasing prices

    I think tariffs are dumb and bad policy, and I know the cost will get passed onto the consumer, but pretending like y’all’s greedy asses weren’t fucking us long before current admin is hilariously disingenuous

  95. hicho309 Avatar

    The most expensive part is the freight, and since that’s domestic and not subject to tariffs, the actual FOB increase is much lower than 10%, or whatever the proposed tariff is. I’m sure you probably know this already?

    For example – say freight is $5k, and entire shipment of potatoes are $2k + 10% tariff, this is an increase of only about 3%.

  96. Street_Bet_7169 Avatar

    Well you dumb ass people voted him in office….you got what you wanted, you have only yourself to blame.

  97. For_Aeons Avatar

    I’m a corporate chef and back in October, ownership looked at me sideways when I began migrating our product catalogs. They didn’t put up a fight, but they were certainly confused why I was replacing menu items with new lower priced items and reducing our imported products.

    Drove the TFC down to like 25.5% when their historical actual was up near 30.5%. They kept asking what I was doing, but neither owner is particularly business savvy or analytical.

    I set the entire staff at around 5-8% over market pay rates in BOH.

    They’ve recently started paying attention to the news and asked me yesterday, “Wait, is this what you’ve been getting us ready for?”

    It’s gonna be a wild ride…

  98. Greedy_Car3702 Avatar

    Seems to me that food service may be an industry that is positively affected by tariffs. If other countries throw up tariffs on US agricultural products then prices for US consumers should drop. Things like fish, shrimp, and avocados may go sky high, but beef, pork, wheat, soybeans and corn should be much cheaper.

  99. 1ntrepidsalamander Avatar

    Some states like California are suing because of the tariffs. Is it possible this will lead to meaningful changes? Or is it just smoke and mirrors?

  100. teleheaddawgfan Avatar

    And once the prices go up, they will NEVER come down!

  101. OffensiveAppetite Avatar

    This is a hard question to frame (and probably harder to answer) because many people are already experiencing hunger, and to a certain extent it’s probably a linear relationship between food costs and hunger, but I’d guess there are also demographic tiers where people spend as a luxury, and then those approaching “without consideration.”

    Do you expect we’ll see effects that will worsen existing conditions but not challenge these structures, or essentially shift demographic groupings, such that people might go from “I don’t buy fancy stuff” all the way to “I need help?”

  102. PenguinHuddle Avatar

    How will this effect produce prices from Mexico, Central and South America?

  103. wak3l3oarder Avatar

    Do you think people will move out of major cities due to food shortages? Im more on a farm area I’m not worried about food at all since all my meals are sourced locally. I hardly eat fast food and local farmers still have great prices.

  104. Brief_Cook_3807 Avatar

    I work in the cosmetic industry and things are insane. Getting cancelled orders as retailers don’t want to hold stock. Nearly all packaging comes from China or Mexico, and the tariffs are ridiculous. No domestic company can produce packaging at the cost and efficiency of China, and that’s not going to change anytime soon.

  105. purple_hamster66 Avatar

    I went to the farmer’s market, where everything is locally produced, and the price spikes were outrageous. $21/lb for ground turkey! So what is the root cause of US producers increasing food prices to this extent?

  106. AvgBoomer Avatar

    The shipper pays all fees and tariffs. Look up freight forwarders to learn how it works.