The Impact of Tariffs on Campbell’s Company
During a recent earnings call, CEO Mick Beekhuizen highlighted the challenges faced by Campbell’s Company due to a lack of domestic supply of certain steel derivatives used for canning. This limitation hinders the company’s ability to fully offset the impact of tariffs, with over half of the projected tariff exposure tied to Section 232 duties on steel and aluminum.
To mitigate these tariff costs, Campbell’s has implemented various strategies such as collaborating with suppliers, finding alternative sources, and implementing productivity and cost-saving efforts. Despite these efforts, the company still expects tariff-driven expenses to account for about 4% of the costs of products sold in fiscal 2026.
One area where Campbell’s has found success is with its Rao’s brand of premium pasta sauce. By working closely with Italian suppliers, the company has been able to navigate around tariff challenges. However, limited tinplate capacity poses a larger challenge, potentially leading to price hikes and financial strain for Campbell’s meal and beverage business.
According to CFO Carrie Anderson, the company is exploring alternative sources for many of the goods it imports, including tinplate. However, this transition process is complex and requires careful consideration to maintain product quality and consumer satisfaction.
Despite the obstacles posed by tariffs and limited domestic supply, Campbell’s remains committed to finding solutions and navigating through these challenges to ensure the continued success of its products.