Latest news with #MaxwellHouse
Yahoo
08-05-2025
- Business
- Yahoo
Exclusive-Kraft Heinz asks coffee suppliers for 60 days' notice for tariff hikes
By May Angel and Jessica DiNapoli LONDON/NEW YORK (Reuters) -Food maker Kraft Heinz, 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. TOUGH TIMES 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, 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. Sign in to access your portfolio
Reuters
08-05-2025
- Business
- Reuters
Exclusive: Kraft Heinz asks coffee suppliers for 60 days' notice for tariff hikes
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.
Business Insider
02-05-2025
- Business
- Business Insider
Starbucks is embracing a tough cost-cutting method that's led workers elsewhere to bring their own coffee to work
Starbucks is planning to use a cost-cutting method with a tough reputation as it continues its turnaround. The method, called zero-based budgeting, asks managers to justify every item they spend on each year, instead of using the previous year's spending as a baseline as many companies do. Starbucks executives say ZBB will help them find savings as they spend more on their Back to Starbucks plan, including paying for more hours for the baristas who staff its stores. "We're going to be looking at ways to grow the business and also take a really hard look through the zero-based budgeting approach to understand where else there might be some offsets," CEO Brian Niccol said during the company's earnings call on Tuesday. "I love deploying a few tools like zero-based budgeting" to "help us get after some of those maybe-stranded costs," CFO Cathy Smith, who joined Starbucks in the last few weeks, also said on the call. A Starbucks spokesperson did not respond to questions about how the company planned to use zero-based budgeting. ZBB gained popularity in the 1970s, thanks in part to former president Jimmy Carter, who advocated — ultimately unsuccessfully — for its use by the federal government. More recently, some major brands have adopted the strategy. Private equity firm 3G Capital has deployed the method at Stella Artois-maker AB InBev and Kraft Heinz, the company that makes Oscar Mayer and Lunchables, for instance. The strategy, which includes moves like making all senior execs fly coach class even over long distances, did lower costs and improve the companies' margins. But in some cases, the spending cuts were so severe that it made it tough for employees to do their jobs, Business Insider reported in 2021. One employee, who had recently left Kraft Heinz at the time, told BI that she could only spend $5 annually on office supplies. She also had to bring in her own Keurig pods from home since the company, which makes Maxwell House coffee, provided no coffee in the office break room. Other Kraft Heinz employees told BI that strict spending controls hampered the development of new products and ultimately made it less competitive. Some companies have adopted the method at key turning points. Managers at X, formerly known as Twitter, reportedly had to use zero-based budgeting after Elon Musk bought the company in 2022, for instance. And in 2020, General Motors implemented ZBB as a way to manage its way through disruptions caused by the pandemic. The company temporarily cut spending by slashing advertising and furloughing some employees, then-CFO Dhivya Suryadevara said at an investor conference.
Yahoo
04-04-2025
- Business
- Yahoo
Lori Falce: President Trump doesn't understand groceries
Apr. 4—Groceries are not old-fashioned. For some reason, President Donald Trump appears fascinated with the word. It started back in August on the campaign trail, when he was working on his economic record and the high prices Americans were seeing on food. He stood at the Trump National Golf Club Bedminster in New Jersey in front of a display of Wonder Bread, Hunt's ketchup, Hillshire Farms lunch meat, Maxwell House coffee, Cinnamon Toast Crunch and Froot Loops and talked about what Americans couldn't afford. A box of Cheerios caught his attention. He hadn't seen them in a long time, he said. But on Wednesday, he brought the focus to food again in the midst of his post-stock-market-closing speech announcing a wide roll-out of tariffs against most of the world. "An old-fashioned term that we use — groceries," he said, seeming to roll the word around in his mouth, tasting it. "It's such an old-fashioned term but a beautiful term. Groceries. It says a bag with different things in it." Groceries aren't a quaint idea for a billionaire's or politician's amusement. Cheerios aren't a nostalgic throwback. Food is a necessity. Groceries are what keep families going. They are the breakfast you grab on the way out the door. They are the lunches your kids take to school. They are the dinners on the table at night. And they cost more than they did before. According to the U.S. Bureau of Economic Analysis — a nonpartisan, nonpolitical, policy-neutral government agency tasked with giving "accurate and objective" economic data — consumer spending in February was up $87.8 billion. For food and beverages, that was an increase of $10 billion over January. The U.S. Department of Agriculture says that won't stop. In March, it predicted food costs would increase 3.2% in 2025. The tariffs could change that. Aside from the tariff impacts feared early on in the Trump administration for Mexican and Canadian products, like produce and maple syrup, the new announcement could hit hard. America imports most sugar. Staples like coffee and chocolate come from parts of the world with very different climates. We can't just start growing bananas in Pennsylvania. Placing tariffs on these products is different from placing tariffs on cars. While the cost of auto tariffs can be far-ranging because of how many businesses rely on them, that's a game of increments in most cases. American households don't buy cars every day. And with high prices, they are likely to try to stretch out buying a replacement as long as possible. But groceries? That's not an old-fashioned word. That's a weekly trip to the store. The groceries have to be replenished. The kids have to be fed. Groceries are more than "a bag with different things in it." Groceries are the thing many families have already been stretching as far as they could. The tariffs mean that bag will have less in it. Lori Falce is the Tribune-Review community engagement editor and an opinion columnist. For more than 30 years, she has covered Pennsylvania politics, Penn State, crime and communities. She joined the Trib in 2018. She can be reached at lfalce@
Yahoo
03-04-2025
- Business
- Yahoo
The First Trump Tariff Americans Will Feel Every Morning Has People Steaming
Donald Trump's new trade war will likely mess with your cup of joe. The price of coffee could be set to soar for Americans after the president on Wednesday announced tariffs on countries worldwide, including steep rates on Brazil, Colombia and Indonesia ― from where the U.S. buys the majority of its unroasted coffee beans. The move prompted an immediate backlash online with critics pointing out America's minimal coffee-growing capacity, due to the climate, which makes the importation of beans so important. Charging 32% tariff on Indonesian coffee beans when the US exports no coffee to them and doesnt have a climate to produce coffee domestically. Yes, these tariffs make so much sense. If you have brain damage. Trump ran on 'groceries' - beautiful word - enjoy the price hike. — Eva Kerr (@evkerr) April 3, 2025 Just brilliant. Because Indonesia has a high tax on coffee imports, Trump's going to put a 32% tax on coffee imports from Indonesia - even though the US exports no coffee to Indonesia (or most anywhere else). He literally does not understand the concept of comparative advantage. — James Surowiecki (@JamesSurowiecki) April 2, 2025 Enjoy your coffee now with the big tax on it. Hey maga's a tariff is a tax the importer (you) pay not the exporter. It is designed to make imports dearer so you by USA products. Unlike trump who buys his merchandise from China. Have a look at the label if you don't believe me. — Eugene Nolan (@EugeneNolan11) April 3, 2025 Guys, we don't have a domestic coffee bean industry at volume. Forget about Starbucks. Folgers and Maxwell House import their beans from regions of the world that can grow coffee beans. They'll be hit with tariffs. Your working class family's coffee price is going up. Trump… — Erick Erickson (@EWErickson) April 3, 2025 You can't grow coffee beans in Missouri, folks! Trump's global trade war will have disastrous consequences on so many commodities that literally can't be replicated on American soil. Sadly, unsuspecting consumers will end up paying the price. 🙃 — Joe Trask (@VideoJoeYo) April 3, 2025 You will be wrong. Starting tomorrow, Americans will be taxed. Your avocados, coffee, clothes, umbrellas, TV's, computers, cars, furniture, kids toys and bananas will increase in price. Why... Trump. — Dr. Ocktopus (@Octokrypto) April 3, 2025 This will go over well…(By the way, I've learned tonight how many people didn't know that the United States cannot grow coffee beans on a scale large enough to meet national demand.) — Yashar Ali 🐘 (@yashar) April 3, 2025 Trump's Tariffs On These 2 Islands Comes With An Absurd Twist Wall Street Journal Torches Trump's Tariffs With 'Golden Age' Reality Check White House Official Explains Why Russia Isn't On Trump's New Tariffs List
