Power Lunch: How Tariffs Could Impact the Food & Beverage Business

While the tariffs on Mexico and Canada have been paused after talks with the Mexican president and Canadian prime minister, the tariffs remain a pressing concern should negotiations stall in the future.

When tariffs increase, importers – not the suppliers or their country – pay more for raw materials and finished products, which can lead to higher prices for consumers. The cost changes ripple through entire operations, from supply chain planning to menu pricing. While previous administrations placed tariffs on steel, aluminum and electronics, the current push affects a broad range of food items — everything from produce to canned goods.

Two of the biggest categories are grains from Canada and fruit and vegetables from Mexico. Tomatoes, avocados, certain grains, cheeses, and meat products are at risk of steeper food import costs.

Key impacted items from Mexico:

* Fruit and preparations: $11,258.9 million

* Vegetables and preparations: $9,847.4 million

* Fresh or chilled fruit: $9,618.8 million

Key impacted items from Canada

* Grains and products: $8,954 million

* Cereal and bakery foods: $6,307.4 million

* Total vegetable oils: $5,058.3 million

With such sizable import volumes, tariffs on these goods could lead to price surges and supply constraints for U.S. distributors and retailers. Many businesses are closely watching how key imports from Mexico and Canada could drive up costs. Supply chain managers must rethink their vendor relationships to reduce food supply chain tariffs and keep distribution smooth.

From fresh produce for restaurants to grains for packaged food manufacturers, businesses will need to manage these revenue challenges by seeking alternative suppliers, adjusting menus or exploring cost-optimization strategies.

The impact of tariffs on restaurants often appears in the form of menu price changes, where owners pass on part of their added costs. Some large quick-service chains have the volume to negotiate better contracts, but smaller establishments lack that leverage. This discrepancy between large and small operators can widen profit gaps and threaten local eateries.

Beyond pricing, fresh produce shortages can occur if certain imports are either too expensive or stuck in customs. Businesses with seasonal menus or farm-to-table marketing may struggle to maintain consistent product quality if they must swap out their usual items.

Many brands now weigh trade-offs: either absorbing losses or raising prices to protect margins. As costs go up, some consumers may shift to domestically produced alternatives or cheaper private-label products. A drop in consumer spending is also possible if people cut back on dining out, especially with menu prices under pressure.

Kelia Losa Reinoso is senior content writer for Tastewise (tastewise.io), an AI-powered market intelligence firm for the food & beverage industry. Tastewise uses real-time consumer data and technology tools to keep brands informed about trending foods, shifting price thresholds and new dining behaviors, thereby helping food & beverage brands adapt to food tariff disruptions.