Because “menu inflation” wasn’t on anyone’s secret sauce recipe.
In the restaurant world, we’ve mastered the art of juggling: inflation, labor shortages, TikTok food trends, and the eternal debate—“Do we really need truffle oil on fries?”
But just when things were beginning to simmer down, in comes a new plot twist: fresh tariffs on imported goods. If you’re in the restaurant, QSR, or cloud kitchen game, these changes could impact your bottom line faster than a viral McFlurry hack.
First things first: What are these new tariffs?
In May 2024, the Biden administration announced a new round of tariffs on Chinese imports, targeting key sectors including electric vehicles, batteries, steel, aluminum, and some food-related packaging products.
That means if you’re using imported to-go containers, kitchen equipment, or even certain frozen ingredients, your cost structure may be heading for a not-so-happy meal.
Stat Snack:
According to the U.S. Chamber of Commerce, the tariffs could affect over $18 billion worth of Chinese imports, including various products used in the hospitality and foodservice industries.
What does this mean for restaurants?
Let’s translate this into kitchen terms:
- That imported freezer you’ve been eyeing? Now 15% more expensive.
- Disposable containers and food packaging? Expect a price hike.
- Ingredient prices from affected regions? Yep—add more dollar signs.
And it’s not just about China. Global supply chain rerouting could drive up shipping costs, lead times, and availability of common products across the board.
How QSRs are feeling the heat?
Example 1: Panda Express
While Panda Express sources most of its ingredients domestically, some specialty packaging (like heat-sealed bowls) previously came from China. The recent tariff hikes forced them to renegotiate with U.S.-based suppliers, increasing packaging costs by nearly 12%, according to a 2024 supply chain analysis by QSR Magazine.
Example 2: Sweetgreen
Sweetgreen, already navigating price pressure on fresh produce, cited increased costs in imported compostable packaging in its recent earnings call (Q1 2024). The brand is now looking at long-term vendor diversification and investing in domestic partnerships to offset costs.
The domino effect on the supply chain
Here’s how tariffs typically ripple through a restaurant’s ecosystem:
- Imported Goods Become Pricier
→ Think kitchen gear, packaging, or even spices and sauces sourced globally. - Distributors Pass on the Costs
→ Your Sysco or US Foods invoice gets fatter. - You Pay More, or Shrink Portions
→ Shrinkflation alert: smaller portions, higher prices, or both. - Customers Feel It, Reviews Reflect It
→ “$18 for a taco??” = Yelp disaster waiting to happen.
Pro Insight:
Restaurant consultant Michael Whiteman told F&B Insights Weekly (2024) that “most ghost kitchens operate on razor-thin capex. Tariff-driven costs on basic kitchen gear could stretch break-even by 6–8 months.”
Strategies to keep the kitchen cooking
- Shift to domestic and nearshore suppliers
Relying less on China doesn’t mean compromising on quality. The U.S., Mexico, and Canada now offer strong alternatives for:
- Stainless steel kitchenware
- Organic spices and grains
- Sustainable packaging (think compostables made in Guatemala or Ohio)
Bonus: Less risk of port delays or import duties.
- Form co-op buying groups
Small to mid-size restaurants can team up locally to negotiate bulk deals on equipment or ingredients.
Example: A group of Houston-based taco joints formed a purchasing alliance to buy bulk cumin, avocados, and packaging—slashing costs by up to 18% even amid inflation.
- Invest in smart inventory management
Use inventory tools like MarketMan or xtraCHEF by Toast to:
- Track real-time ingredient price fluctuations
- Predict when to stock up ahead of tariff increases
- Reduce waste and prevent overbuying
Data shows that restaurants using digital inventory tools saved an average of 6% annually on COGS in 2023 (source: Toast Restaurant Report 2024).
- Lease or Buy Refurbished Equipment
Rather than shelling out for tariff-hit new equipment:
- Look for certified refurbished appliances
- Partner with local leasing firms
- Or buy used but tested gear via platforms like IronFox or Restaurant Equippers
- Simplify Menus (Without Losing the Magic)
If tariffs are hitting a few key imported ingredients hard, consider:
- Menu engineering: Remove low-margin items that rely on imports
- Highlight local hero ingredients in new menu specials
- Get creative with fusion tweaks that use local substitutes
Example: One Chicago ramen bar swapped imported bamboo shoots with local pickled mushrooms and marketed it as a “Midwest Miso Bowl.” Customers loved it.
Expert Take
“The food industry has always been one of the most adaptable. Tariffs are just another variable to factor in—but those who plan, diversify, and digitize their supply chains will thrive.”
— Karen Donohue, Professor of Operations Management, University of Minnesota
Bonus Tip: Tech Can Help
Platforms like Craft.co and ResQ now offer real-time insights into supplier stability, tariff exposure, and risk factors—helping restaurants make smarter sourcing decisions.
Final Bite
Tariffs might not be fun, but neither was switching to QR-code menus—and we did it. Successfully.
If there’s one thing the restaurant industry has proven time and again, it’s that creativity beats crisis. With a mix of strategy, supplier smarts, and a dash of humor, you can keep costs manageable and customers satisfied—even when policy is heating up.