Kraft Heinz Seeks Price Stability from Coffee Suppliers Amid Trump Tariff Uncertainty
May 11 - 2025
Coffee Geography Magazine
Food and beverage giant Kraft Heinz, which owns leading U.S. coffee brand Maxwell House, has requested its coffee suppliers to provide at least 60 days' notice before raising prices in response to tariffs imposed by the Trump administration. The company has also asked suppliers to only adjust prices if the tariffs become permanent and to immediately roll back increases if the levies are lifted—highlighting the challenges businesses face in navigating the unpredictable U.S. trade environment.
Under the standard Green Coffee Association contract, which governs most U.S. coffee imports, any tariffs imposed at the destination market must be absorbed by the buyer. Despite the financial pressure, industry players remain calm for now, as trade rules are clearly defined.
Kraft Heinz, which also owns premium coffee brand Gevalia, declined to comment on the issue but stated it is working with suppliers to "mitigate the impact" of tariffs.
The U.S. implemented a 10% universal tariff last month on all imported goods, including coffee, while negotiating separate trade deals with individual countries. On April 2, President Trump paused plans for steeper tariffs—except for Chinese imports—but the uncertainty continues to ripple through global supply chains.
Coffee, which had not faced U.S. tariffs since colonial times, is now at the center of a pricing dilemma for both roasters and suppliers. Kraft Heinz’s coffee division reported net sales of $835 million in its fiscal year ending December 28, accounting for roughly 3% of its total $25.8 billion revenue. The company has historically relied on steady cash flow from its coffee business—which is not a high-growth segment—to fund investments in faster-expanding brands.
A potential price hike could particularly hurt Maxwell House, Kraft Heinz’s budget-friendly coffee brand. For example, a 27.5-ounce canister currently sells for $11.79 at Target.
The company has already revised its 2019 input cost forecast upward, from 3% to 5%, but coffee-related expenses are surging even more sharply. Raw coffee bean prices have nearly doubled over the past year due to adverse weather conditions and crop shortages in key producing regions like Brazil and Vietnam.
Adding to the complexity, Kraft Heinz and other major roasters locked in coffee prices months ago when they signed contracts with suppliers sourcing beans from tropical regions. Now, they must decide whether to absorb the additional tariff costs or pass them on to consumers—a move that could dampen demand in an already competitive market.
As trade tensions persist, Kraft Heinz’s strategy reflects a broader corporate effort to stabilize costs while maintaining affordability for consumers. However, if tariffs remain in place long-term, price increases may become inevitable, reshaping the economics of the U.S. coffee industry.