How does the old adage go? Another day, another tariff. While that might not be exactly it, these days, it’s not just trade talk — it’s bottom-line reality. A new wave of global tariffs is crashing into the beverage industry, bringing cost hikes, supply chain snags, and enough unpredictability to make your procurement manager lose sleep.
Increasingly turbulent waters are challenging profitability for producers across the bev-alc industry. We’re talking 25% duties on imported canned beer and empty aluminum cans. Price jumps on wine bottles, corks and oak barrels. Export and import hits that put American spirits at a global disadvantage. Even with the recent 90-day pause on tariff enforcement, everyone knows: this is a temporary detour, not a permanent fix.
So what’s the playbook? Resilience and adaptability are essential for survival. Smart producers aren’t just reacting, they’re retooling. And at the center of that strategy? Beverage ERP.
First, What Tariffs Are We Talking About?
A quick snapshot:
- Beer: U.S. craft brewers get about 40% of their barley from Canada and rely heavily on Chinese equipment. Tariffs on both threaten cost structures.
- Wine: Tariffs on EU wine imports could spike up to 200%, with packaging materials (glass, cork, labels) also caught in the crossfire.
- Spirits: U.S. distilleries face retaliatory tariffs from overseas markets, job losses and supply shortages — especially in bottles, stills and flavoring agents.
According to the American Craft Spirits Association, distilleries are sourcing heavily from outside the U.S.:
- 30% import from Canada
- 50% from Mexico
- 52% from the EU
- 55% from China
These aren’t optional extras but critical inputs like agave, yeast, barrels, tanks and toppers.
Don’t Wait — Tariff Strategies Started Yesterday
In a recent webinar hosted by the Brewers Association, Craft ‘Ohana President & COO Scott Metzger advised on strategies to implement now:
- Talk to your suppliers: Start building or strengthening those relationships. A little goodwill goes a long way in a disrupted market.
- Forward contract where it makes sense: Lock in pricing on materials you know you’ll need.
- Form alliances to share resources: Small bev-alc producers can join a co-op with other companies to share costs of personnel, software, bulk supplies, etc, ultimately operating as a multi-location entity.
Adding to the conversation, Steve Rannekleiv, Rabobank’s global beverage strategist, emphasizes keeping an open line of communication with your banker because all of this is financial planning.
Further, now is the time to re-evaluate product portfolios. New formats (like 19.2 oz single cans of craft beer) and adjacent categories are gaining traction, and ERP gives you the agility to pivot production when consumer demand shifts.
Know your winners and losers. Leverage your beverage ERP system’s sales and cost analytics to double down on what’s working and scale back what isn’t.
Immediate Action Steps for Beverage Producers
- Strengthen supplier relationships: Build robust, proactive relationships with suppliers. Transparent communication, forward contracting and long-term agreements can insulate producers from short-term volatility. Businesses can stabilize costs and improve financial predictability by negotiating fixed prices for critical inputs like barley, hops or glass.
- Diversify and localize your supply chain: Reduce reliance on single-source international suppliers. Beverage producers can significantly reduce tariff exposure by sourcing domestically or diversifying their global suppliers. Leveraging beverage ERP solutions helps quickly identify alternative suppliers, enabling producers to pivot swiftly and avoid severe disruptions.
- Adopt cooperative purchasing and shared services: Smaller-scale producers often face disproportionate impacts from rising tariffs. Cooperative models allow these businesses to pool purchasing power, share logistical costs, and collectively negotiate better deals. This model reduces costs and strengthens resilience during uncertain economic conditions.
- Prioritize high-margin products: By emphasizing items that deliver the greatest profit margins, producers can better absorb increased input costs and maintain healthier financial outcomes. Focus resources on high-margin products during turbulent times. Beverage ERP analytics enable producers to identify top-performing products and realign production strategies swiftly.
The Strategic Advantage of Beverage ERP Software
Beverage-specific ERP software is a powerful ally in a volatile tariff environment, providing critical tools for cost control, inventory management and strategic planning. It’s the operational brain that helps producers stay agile when the game changes.
Here’s how beverage ERP helps producers navigate tariffs without torching profitability:
- Track true landed costs: Tariffs cascade through your margins. A solid beverage ERP system gives full visibility into true landed cost: base price + tariffs + freight + duties + fees. No more guessing. No more underpricing. You get product-level insights that let you price smarter and protect your margins.
- Real-time cost visibility: Real-time cost management enables beverage producers to track expenses closely and respond quickly to market changes. Producers gain immediate insights into cost fluctuations, allowing swift adjustments to pricing strategies to protect profitability.
- Enhanced inventory management: Co-ops and multi-location operations (growing trends in the craft space) can use ERP to share inventory, bulk-buy and keep operations lean. Think of it as a collective defense against cost surges. No more silos. With shared views of inventory, supplies and production, co-located breweries or distilleries can negotiate better rates and move materials smartly, minimizing excess stock costs and preventing production downtime due to shortages.
- Advanced demand planning and forecasting: Accurate predictions allow producers to proactively manage their resources, optimize procurement strategies and prepare adequately for potential supply chain disruptions. Instead of throwing darts, you can focus production, promotion and inventory on your top performers. And when a particular ingredient or packaging element becomes prohibitively expensive? Your planning engine already has the data to help you adjust.
- Data-driven supplier negotiations: When your glass bottles or steel tanks go up 30% overnight, switching suppliers quickly becomes survival, not strategy. ERP helps you:
- Map existing vendors across regions
- Onboard new ones fast
- Set preferred suppliers by item
- Track vendor performance over time
Comprehensive analytics provided by beverage ERP gives producers valuable leverage in supplier negotiations. Armed with precise data on historical purchasing patterns, cost trends and supplier performance, producers can negotiate confidently, securing favorable pricing and terms even during tariff turbulence.
Big Picture: Consolidation, Closures and…Opportunities?
Idealists and realists may argue, but the truth is clear: few, if any, will escape this tariff cycle unharmed. Closures are coming, but new opportunities await those who stay nimble and strategic.
We already see more M&A in craft beverage, co-ops and contract production deals. ERP plays a central role here, helping merged entities operate as unified businesses, not patchwork systems.
Even equipment auctions, real estate or supplier renegotiations can become strategic wins — if you’ve got the data to move quickly.
Let’s talk. If you’re ready to see how beverage ERP can help your business in a tariff-driven market, reach out. Let’s get you prepared for whatever comes next.
