Kraft Heinz (KHC) Asks Coffee Suppliers for 60-Day Notice of Price Hikes Caused by Tariffs

Food giant Kraft Heinz (KHC) is asking its coffee suppliers around the world for 60 days notice before raising prices due to U.S. President Donald Trump’s import tariffs.

Kraft Heinz sells top U.S. coffee brand Maxwell House, among other caffeinated products. The Pittsburgh-based company is also asking its coffee suppliers to only raise prices if the tariffs are permanent and to immediately reverse them if the duties are removed.

Large companies with big buying power such as Kraft Heinz are trying to negotiate better deals with their suppliers in the face of shifting tariffs from the Trump administration. Under the “Green Coffee Association” contract, which covers most shipments to the U.S., tariff costs “shall be borne by the buyer,” meaning Kraft Heinz in this instance.

Difficult Times

Kraft Heinz, whose brands also include premium Gevalia coffee, wants its suppliers in countries such as Brazil and Vietnam to work with it to “mitigate the impact” of tariffs. President Trump implemented a 10% universal tariff last month on all imported goods, including coffee beans and related products.

The steep tariffs come as Kraft Heinz’s struggles to sell its name brand grocery products against cheaper private label brands and start-up companies. Coffee has not faced U.S. tariffs since colonial times, and both roasters and suppliers are grappling with how to manage them.

Kraft Heinz’s coffee business reported sales of $835 million U.S. in its fiscal year ended December 28, accounting for 3% of the company’s total sales of $25.80 billion. KHC stock has declined 7% this year.

Is KHC Stock a Buy?

The stock of Kraft Heinz has a consensus Hold rating among 17 Wall Street analysts. That rating is based on one Buy, 12 Hold, and four Sell recommendations issued in the last three months. The average KHC price target of $29.41 implies 3.92% upside from current levels.

Read more analyst ratings on KHC stock