Exclusive: Kraft Heinz asks coffee suppliers for 60 days' notice for tariff hikes

Reuters

08-05-2025

LONDON/NEW YORK, May 8 (Reuters) - Food maker Kraft Heinz (KHC.O), opens new tab, which sells top U.S. coffee brand Maxwell House, has asked its coffee suppliers for 60 days' notice before hiking prices due to U.S. President Donald Trump's tariffs, according to a document seen by Reuters.
In the document sent in April, the company asked suppliers to raise prices only if the tariffs are permanent and to immediately reverse them if the levies are removed, underscoring the struggle U.S. companies face to contain the fallout from Trump's erratic and punitive trade policies.
The document also dashes the hopes of investors in U.S.-based companies and Trump administration officials that companies with big buying power like Kraft Heinz could negotiate better deals from their suppliers to help offset tariffs.
Under the Green Coffee Association contract, which covers most shipments to the United States, tariff costs imposed at the market of destination "shall be borne by the buyer."
"No one (on the trade side) has hit the panic button yet, because it's crystal clear what the rules are," said a Europe-based coffee trader who ships beans to the U.S.
Kraft Heinz, whose brands also include premium Gevalia coffee, declined to comment.
The company also said in the document it hoped suppliers would work with it to "mitigate the impact" of tariffs.
The United States implemented a 10% universal tariff last month on all imported goods including coffee and is negotiating separate trade deals with different countries.
Trump paused plans for steeper tariffs on April 2, except for Chinese imports.
Kraft Heinz's well-worn brands like Lunchables, Kraft Macaroni and Cheese and Oscar Meyer are struggling to keep their position on grocery store shelves against private label and start-up rivals.
Its sales and volumes plunged in the quarter ended March 29, and Kraft Heinz lowered sales and profit forecasts for the rest of the year.
Coffee has not faced U.S. tariffs since colonial times, and both roasters and suppliers are grappling with how to handle them.
Kraft Heinz's coffee business reported net sales of $835 million in its fiscal year ended December 28, accounting for about 3% of its total net sales of $25.8 billion.
The packaged food maker has said it uses cash flow from coffee sales, which are not growing quickly, to invest in higher growth brands.
A coffee price hike may hurt Kraft Heinz's budget-friendly Maxwell House brand. A 27.5-ounce canister sells for $11.79 at Target (TGT.N), opens new tab, or about 21 cents per cup.
Kraft Heinz has bumped up its estimate for higher input costs this year to 5% from 3%, but its coffee cost increases are far bigger as raw bean prices have nearly doubled over the past year, thanks to adverse weather and crop shortfalls.
Roasters such as Kraft Heinz agreed on coffee prices months ago, when they entered contracts to buy raw beans from suppliers who source them from tropical regions, industry sources told Reuters.