The imposition of tariffs by the Trump administration on imports from Mexico, Canada, and China has sent shockwaves through the food supply chain. Victoria Gutierrez, chief merchandising officer for Sysco, a global food distributor, highlighted challenges posed by the 25% tariff on Mexican and Canadian goods and additional levies on Chinese imports. While Sysco had diversified its suppliers during the COVID-19 pandemic, products like avocados remain a concern due to Mexico’s dominance in supply. Companies are now scrambling to build inventories or find alternative suppliers. For instance, Westrock Coffee is exploring sourcing coffee from Honduras or Guatemala instead of Mexico. Perishable goods like avocados present unique challenges, leaving companies to either absorb the costs or pass them to consumers. Chipotle has stated it will absorb the costs for now, while Target plans to raise prices on affected produce. Analysts warn that passing costs to inflation-sensitive consumers may not be sustainable. Mondelez International faces challenges with its Salinas, Mexico, factory, which produces Oreos and Ritz crackers. Alcohol companies like Diageo and Constellation Brands are also impacted, with potential profit hits due to tariffs on tequila, whisky, and beer imports. Sysco continues adapting its supply chain, emphasizing flexibility amid ongoing uncertainties. — news from The Seattle Times
