If you operate a food or beverage brand in Canada, you’ve likely already felt the sting of US tariffs—whether through increased packaging costs, disrupted supply chains, or reduced margins. And with international trade tensions remaining volatile, these challenges are more than just temporary bumps in the road. They’re long-term hurdles that demand long-term strategies.
In this article, we’ll break down how these tariffs are impacting Canadian food and beverage companies, explore what you can do to protect your margins and your brand, and share actionable strategies that will help you emerge stronger, more resilient, and more competitive than ever.
The Current Impact of US Tariffs on Canadian Food & Beverage Brands
US tariffs on Canadian goods—especially aluminum, steel, and certain agricultural and packaged food products—have raised costs across the board for Canadian food and beverage brands. These tariffs affect not only exported goods, but also packaging materials, equipment, and ingredients sourced from or through the US. Even if your brand sells primarily within Canada, your bottom line may still be taking a hit.
Long-term, these tariffs are shaping new norms in pricing, procurement, and product development. Brands that fail to adapt may struggle to remain competitive in both domestic and export markets.
Actionable Tip:
- Audit your supply chain to identify which components (ingredients, packaging, equipment) are affected by US tariffs and how much those costs have increased over time.
Diversify Your Supply Chain to Reduce Risk
If you’re relying heavily on US suppliers, it’s time to explore alternatives. Many Canadian food businesses are turning to domestic or international (non-US) sources for ingredients, packaging materials, and manufacturing components. This shift can help stabilize your costs and protect you from future tariff hikes or trade disputes.
Actionable Tip:
- Build a supplier matrix that includes at least two non-US vendors for each key material or ingredient.
- Attend Canadian food trade shows or use directories like Canadian Food Exporters Association to discover local or global supply partners. Check out our list of the Best Food and Beverage Trade Shows in Canada at this link.
Rethink Packaging to Minimize Tariff Exposure
Packaging is one of the most tariff-affected categories, especially when it involves aluminum (think beverage cans) or imported plastic components. Redesigning your packaging with more sustainable, locally-sourced, or tariff-free materials can have a measurable impact on your margins.
Actionable Tip:
- Work with a packaging design team (like ours!) to explore minimalist or eco-friendly alternatives that reduce cost and improve shelf appeal.
- Switch to domestically produced materials that aren’t subject to US import tariffs.
Explore New Markets Beyond the US
While the US remains an important trading partner, the current environment presents an opportunity to grow your business in new markets. European and Asian buyers continue to seek high-quality Canadian food products—especially those positioned as clean, organic, or plant-based.
Actionable Tip:
- Investigate Canada’s free trade agreements, like CETA (with the EU) or CPTPP (with Asia-Pacific countries), which reduce or eliminate tariffs for Canadian goods.
- Use Export Development Canada (EDC) resources to identify export opportunities and funding support.
Embrace Strategic Brand Positioning
Increased costs often mean higher prices. The key is to communicate your value clearly to consumers so they understand what they’re paying for. A well-positioned brand that emphasizes its quality, origin, or sustainability can still thrive, even at a slightly higher price point.
Actionable Tip:
- Invest in branding and storytelling that highlights your values—local ingredients, sustainable practices, or Canadian craftsmanship.
- Revamp your website and packaging to reflect this positioning consistently across every consumer touchpoint.
Innovate With Product Development
One effective way to respond to rising costs is by developing products that deliver more value or use alternative ingredients that are less affected by tariffs. Reformulating products or introducing new SKUs can also help you pivot into new categories or segments.
Actionable Tip:
- Work with your product development team or nutrition experts to test ingredient swaps or cost-effective formulations.
- Run market research to identify new trends that align with your brand but reduce dependency on tariffed components.
Strengthen Your Direct-to-Consumer Channels
Selling directly to consumers (DTC) allows you to retain more margin, reduce dependency on US distributors or retailers, and build stronger customer relationships. An effective DTC strategy includes a well-designed ecommerce website, strategic email marketing, and engaging visual content.
Actionable Tip:
- Optimize your website for ecommerce, mobile browsing, and storytelling.
- Create monthly content—like recipes, blog posts, or videos—that builds traffic and trust while boosting SEO.
Conclusion
The reality is clear: US tariffs are not going away anytime soon, and they will continue to affect Canadian food and beverage businesses in many ways. But with proactive strategies—like diversifying your supply chain, redesigning your packaging, expanding into new markets, and strengthening your brand—you can reduce their impact and future-proof your business.
At NOVO MxC, we help food and beverage brands turn challenges into growth opportunities. From strategy and branding to packaging design, website development, photography, and video production, we offer a full suite of services to help you stand out in a competitive landscape.
Please give us a call at 416-892-2471 or reach out to us using the contact form at the bottom of this page.
