How Tariffs Are Shifting the Beverage Industry

On March 12, a 25% tariff on imported steel and aluminum went into effect in the U.S., sending ripple effects through industries that rely heavily on these materials. Canada and Mexico, which supply nearly 40% of imported steel, are directly impacted.

For canned products, this isn’t just a trade policy shift—it’s a fundamental change in costs. By April 2, tariffs on agricultural products will follow, further complicating supply chains.

One immediate consequence? The price of producing beer is climbing, particularly for craft breweries that depend on aluminum cans, kegs, and brewing equipment.

The Reality for Breweries: Higher Costs, Tough Decisions

Beer production at craft breweries is deeply tied to global supply chains. Many of the raw materials these breweries use come from canada and China, making them directly vulnerable to these new tariffs.

For example, ABC7 Chiacago reported that local brewery Werk Force Brewing Co. anticipated the tariff spike and stocked up on 160,000 cans—an eight-month supply. But not every brewery has the cash flow or warehouse space to make those kinds of preemptive moves.

For breweries that export to Canada—America’s largest craft beer market, accounting for 37.5% of exports—the stakes are even higher. Some breweries have already had products pulled from Canadian shelves in retaliation of tariffs.

A Limited Domestic Supply—and No Quick Fix

The big challenge? Finding alternatives. Katie Marisic, Director of Trade, Tax, and Federal Government Relations at Diageo, wrote for Brewers Association and shared a statement by the United States Aluminum Association.

"Even if every U.S. smelter was running at full capacity, it wouldn’t come close to covering the industry’s needs. Two-thirds of our primary aluminum supply comes from Canada, and 90% of our aluminum scrap imports come from either Canada or Mexico. Becoming self-sufficient would take billions in investment and decades of development."

Well-known NYC-based, Talea Brewery echoed this concern, telling CBS in a video interview that steel, aluminum, and grain are their most critical imports. With aluminum making up 25% of the cost of a case of beer, a cost increase could mean a 5-cent price hike per can—a seemingly small shift that adds up fast across mass production.

How Beverage Brands Are Navigating the Shift

With rising costs and supply chain volatility, beverage brands are adjusting their strategies. Some are forecasting demand further out and bulk-ordering materials to lock in current prices. Others are exploring alternative sourcing, though domestic options remain limited, especially given the vast demand of craft brewers - there are nearly 10,000 craft brewers in the United States.

These tariffs aren’t just a policy shift—they’re forcing an industry-wide rethink of supply chain planning, pricing strategies, and risk management. Brands that stay agile, optimize sourcing, and use real-time sales forecasting tools (like Pantry AI) will have the edge in navigating this evolving landscape.