Key Takeaways:
- J.M. Smucker Co. is planning to increase coffee prices for the fourth time since June 2024 due to tariffs impacting the cost of coffee bean imports.
- The primary driver of direct material costs related to tariffs for Smucker is coffee bean sourcing, with the company mainly procuring from Brazil and Vietnam.
- CEO Mark Smucker highlighted the challenges of managing U.S. tariff impacts on green coffee, the company’s largest tariff-impacted import.
Insight Analysis:
Smucker purchases approximately 500 million pounds of green coffee annually, making it the company’s most impacted import by tariffs. Most of the company’s U.S. production is domestically sourced, with popular brands including Folgers, Dunkin’, and Café Bustelo.
The company is working on mitigating cost increases through alternative sourcing strategies and responsible pricing, as retaliatory tariffs from countries like Canada contribute to higher costs.
Other food and beverage companies, such as Campbell’s, General Mills, Tyson Foods, and Coca-Cola, are also facing challenges with pricing due to tariff-related negotiations.