Indeed Brewing Company is “scrambling” to figure out what kinds of impacts new steel and aluminum tariffs will have on the business, including a brewery in Milwaukee.
That’s according to Ryan Bandy, the Minneapolis-based company’s chief business officer. In an interview yesterday, he said U.S. craft breweries have largely shifted to using cans instead of bottles over the past decade or so, estimating 70% of the industry’s product is now sold in aluminum cans.
“One of our biggest expenses in a given year is cans, so even going up by a percent or two, for a lot of us, that’s not necessarily a margin we have, especially mid-sized manufacturers,” he told WisBusiness.com. “In past times that we’ve seen can prices go up, especially in a quick way … it’s a really hard battle.”
President Donald Trump recently announced he will enact a 25% tariff on all steel and aluminum imports. Bandy says the move is “definitely going to impact the industry,” especially smaller businesses that aren’t able to stock up on cans before price shifts take effect.
“We either have to eat that margin, or we have to pass it along at least to the wholesaler, and then some wholesalers pass it on — most of them do — to the retailer, and then obviously that hits the consumers at some point,” Bandy said.
The company, which has had a presence in Milwaukee for more than five years, is in the process of tracing the supply chains of its own suppliers to determine where they get their aluminum. Depending on those suppliers’ inventory levels and business models, cost impacts could take months to see, Bandy explained.
“That’s the hardest part about this stuff, is you know that it will affect you, you just don’t know how and when,” he said. “Some form of it is a waiting game, and some form of it is trying to get proactive, and make sure you try to make the right decisions.”
That could include switching suppliers, though he noted it’s not as easy as calling up a different shop in town and switching immediately.
He said company leaders are looking into that possibility, as well as buying as many cans as possible at the current price point. But that poses a challenge of its own, he said, as many smaller companies don’t have enough cash flow to buy supplies for the coming year or two.
“Where can we add on surcharges, or increase the product’s price, those are all the things that we have to be looking at. Not saying we will, but certainly something that we have to do some exploration on,” he said.
See more information from the national Brewers Association on potential tariff impacts on the industry.
