“For somebody like us, not only do you have a little less supply potentially available in the Arabica market if reciprocal tariffs were to take place, but you also have within specialty coffee some countries that would take some high tariffs. “Sumatra has a 32% tariff. Sumatra, for us in particular, is a really big component of some of our biggest blends we sell. While at 10%, we are taking a little bit of a wait-and-see approach on the retail side of things, at 32%, that would be really impactful. We would have to absolutely either raise prices somehow or rework blends or a combination of the two.”
The chaos has already forced Klatch to create a separate line item for tariffs. “Assuming the tariffs go away, that line item goes away,” Perry said. “So this does not become a permanent price increase but just something to absorb those costs of the tariffs so we can continue to maintain in other areas. On the retail side, we are playing a wait-and-see. We are both retail and wholesale, and my retail stores buy from the wholesale division of our company. So even if wholesale puts a tariff line to my stores on the retail side, I would incur that higher cost, and I would for the moment not pass anything on to consumers and just watch everything really closely.”
Another issue Klatch has to consider is packaging, which they acquire from Hong Kong. “We’re trying to figure out if Hong Kong is subject to a 145% tariff or not,” Perry said. “As you’re trying to do your business planning and budgeting, it becomes very difficult. We’re all kind of working off of best guesses at this point.”
What can consumers do about tariffs?
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