J.M. Smucker Absorbs Tariff Hit, Halts Coffee Price Hikes After Policy Shift
December 10 - 2025
Coffee Geography Magazine
The J.M. Smucker Company canceled planned price increases for its coffee products, opting to absorb millions in tariff costs. The decision, announced during a November 25 earnings call, marks a reversal from the company's earlier strategy of passing on rising costs to shoppers.
Chief Financial Officer Tucker Marshall revealed that despite previous price hikes implemented to mitigate tariffs, coffee demand has remained surprisingly strong. This consumer steadfastness provided the company with some flexibility in its pricing strategy. The pivotal change, however, came from recent U.S. trade policy. CEO Mark Smucker pointed to the Trump administration’s executive order exempting green coffee beans from tariffs as a key factor, expressing a belief that "the commodity will normalize over time as it has historically."
Mark Smucker CEO for J.M. Smucker
Earlier this year, Smucker had raised prices in response to tariffs on imported green coffee beans, a commodity not grown domestically. The company sources approximately 500 million pounds of unroasted beans annually, primarily from Brazil and Vietnam—countries facing significant U.S. tariffs. The higher prices did not dampen demand as much as anticipated; the company now expects coffee revenue for the fiscal year ending in April to rise 16% year-over-year, with volume dropping only 6% below its initial model.
The broader market has seen similar pressures. Other coffee importers have raised prices to accommodate sourcing costs, with federal data showing year-over-year price jumps of nearly 19% for roasted coffee and over 21% for instant coffee in September.
By choosing not to enact a third price hike this fiscal year, J.M. Smucker will not fully recover an estimated $75 million in accrued tariff costs, a decision that will negatively impact earnings. CEO Mark Smucker acknowledged this short-term financial hit but remained confident in the company's long-term positioning. CFO Tucker Marshall quantified the impact, estimating unrecovered costs would lower current fiscal year earnings per share by $0.50. He assured analysts, however, that this negative pressure is not expected to repeat next year, assuming no further changes to U.S. trade policy on green coffee. The company now anticipates a less volatile coffee market ahead.