Surviving Tariff Uncertainty: Predicting the Future of Foodservice Amid Price Shocks

As US tariff threats loom, waves of concern and speculation are rippling through the foodservice industry.

Will the proposed 25% tariffs on Canadian and Mexican imports — currently postponed to March 2025 — actually take effect? What about the recently announced “retaliatory tariffs” on global trading partners? One thing is certain: whether imposed or merely threatened, tariffs create uncertainty and stress for all industry players.

Instead of speculating, the best approach is to ground your decisions in data. With so much up in the air, anxious businesses need objective industry insights to understand what’s actually happening and plan for possible market shifts.

In this article, we’ll explore some practical ways to set aside speculation in favor of actionable analysis. We’ll cover some examples of how foodservice data and insights from Brizo FoodMetrics can answer questions both simple (like how many US establishments use avocado, a major Mexican export) and complex (using a simulator to model the impact of tariffs on menu prices and profitability).

Mapping the impact on iconic menu items

If tariffs do come into play, the first step is understanding which ingredients and dishes would be most affected…and how many establishments are poised to take a hit.

In 2023, the US imported over $40 billion worth of Canadian agricultural products. Canola oil alone accounted for $4.8 billion — a staple in most commercial kitchens. Meanwhile, $1.6 billion of imported frozen potato products equals a lot of fries.

A quick data pull from Brizo FoodMetrics reveals that 379,000 US establishments feature fries on their menu, many likely deep-fried in canola oil. Though fries are typically a high-margin menu item, a 25% increase in supply costs would put additional pressure on a large number of operators.

What about the other half of the classic burger combo? It turns out that Canadian beef products account for $3 billion of annual US imports. With 246,000 establishments serving burgers in the US, will the industry’s recent focus on “value meal wars” remain sustainable in the face of tariffs?

Keep reading to see how our predictive model calculates the post-tariff price of a burger and fries.

Visualizing vulnerability across market segments

From avocado toast to guacamole, Americans consume a lot of avocados, and very few of them are grown domestically. Mexican avocados account for 89% of all avocados imported into the US. In fact, vegetables, fruit, beverages, and distilled spirits make up almost three quarters (72.5%) of US agricultural imports from Mexico.

It’s clear that tariffs on Canadian and Mexican imports would have a significant impact on US operators and consumers, but would that impact be evenly distributed? Do certain ingredients correlate more closely with specific cuisines, chains, or regions? Identifying these connections can help determine which segments are better (or worse) positioned to weather the tariff storm.

Detailed menu and business data from Brizo FoodMetrics can reveal existing patterns and groupings, offering a clearer picture of market volatility.

Let’s take a closer look at US operators using avocado as an ingredient. Out of 518,000 establishments with avocado on their menu, 287,000 are independents, while 231,000 belong to chains.

Brizo’s chart view helps visualize which operator segments may be most affected by rising avocado prices. American and Mexican cuisines rely most heavily on avocados, with top chains like Subway, Taco Bell, and Chipotle reflecting this trend.

Geographically, California leads the states in avocado usage…no surprise there. But would you have guessed that New Jersey ranks seventh? Insights like these help identify where tariff impacts could hit hardest, allowing operators, manufacturers, and distributors to stay informed and ready to adapt.

Building a data-driven tariff vulnerability index

So far, we’ve only scratched the surface with a few straightforward data points. The real power comes from combining these insights into a multi-dimensional, interactive model.

One approach we’ve been exploring is a tariff vulnerability index. Imagine a holistic scoring system and accompanying report highlighting specific risks and recommendations. Such a model would go beyond simple cost analysis to deliver a comprehensive risk assessment based on multiple market factors.

How can Brizo FoodMetrics data be leveraged to support this model? Here are a few key components:

• Menu Data: Determine what percentage of dishes (and their underlying ingredients) are susceptible to tariffs
• Historical Price Data: Analyze past pricing trends to forecast potential market fluctuations
• Demographic Data: Evaluate price sensitivity based on customer demographics
• Geographic Data: Incorporate location-based insights, such as proximity to competitors or alternative suppliers
• Technographic Data: Evaluate each operator’s technology stack, including dynamic pricing tools and the ease of online menu updates
• Your Data: Work with our dedicated team to include your own internal data for a 360 degree view

If that sounds intriguing, read on to discover the first steps we’ve taken to build a price shock model you can try for yourself.

Introducing Brizo’s Price Shock & Tariff Simulator

Whether you’re an operator, distributor, manufacturer, or industry analyst, you want to be adaptive, not reactive. Having a data-driven strategy will allow you to predict the future and stay ahead.

To support this, we’ve developed an interactive Price Shock & Tariff Simulator to calculate the potential impact of tariffs and other price shocks on menu pricing and profitability.

Our model allows you to analyze different dishes and their potential price fluctuations due to inflation and price shocks like tariffs, bird flu, minimum wage increases, and more. The primary columns (in blue) are:

• Dish Name: Choose any of our sample dishes or tell us what you want to analyze.
• Pre-shock Price: The current average price per dish, calculated using all US establishments (split by chains vs independents)
• Post-shock Price: The predicted average price based on various customizable factors

A series of customizable fields (in orange) will dynamically update the Post-Shock Price for each dish, allowing any user to model different scenarios:

• Ingredient % Increase: Apply a percentage-based price increase to any ingredient
• Inflation Rate: Model the impact of low vs. high inflation (or minimum wage increases)
• Pre-shock Profit Margin: Input the current profit margin on a dish
• Post-shock Profit Margin: Set a target profit margin or determine how it needs to change to keep prices consistent after tariffs and inflation are applied

The model is possible thanks to a blend of Brizo’s proprietary foodservice data and practical AI usage. It takes into consideration:

• Ingredient Breakdown: Standard ingredient compositions for each dish, calculated via Brizo’s machine learning (ex. your typical burger has a bun, beef patty, cheese, tomato, etc.)
• Cost Ratios: Adjusted for varying ingredient costs (ex. beef is more expensive than tomatoes)
• Ingredient Volume: Factoring in the proportion of each ingredient in each dish (ex. a burger might be 30% bun, 43% beef, 7% cheese, and so on)

Everything in the model is customizable: assisted by Brizo’s data & insights team, you can modify the underlying dishes, ingredients, cost ratios, and volumes to fit your needs. For companies looking to leverage AI, simply input your dish of choice into your preferred AI tool and ask it to deconstruct its ingredients by cost ratio and volume.

Even better, you can incorporate your own internal data for more precise forecasting and the ability to compare your business against an unbiased industry benchmark. Though the example simulator data is at a national level, the model can easily be customized to drill down to a specific region, business type, or market segment.

Value meal no more? Simulating price shocks on burgers and fries

Imagine you’re a distributor of Canadian beef and Mexican tomatoes, about to speak with a large burger chain worried about the potential impact of tariffs. Understanding how sudden price shocks to the supply chain could affect their bottom line will empower you to guide the conversation and suggest strategic business decisions.

Scenario 1A: Hamburger with 3% inflation

• The average price of a burger at a chain is $9.05.
• Applying a 3% inflation rate means the burger price must rise to $9.32 to maintain a 15% profit margin.

Scenario 1B: Hamburger with 3% inflation + 25% tariffs on beef and tomatoes

• What about if Canadian beef and Mexican tomatoes are subject to a 25% price increase as a result of tariffs?
• After applying 25% increases to these two ingredients, the post-shock price of a burger jumps to $11.13.

Scenario 2A: Fries with 3% inflation + 25% tariffs on potatoes and canola oil + consistent profit margins

• What about that burger combo? Let’s consider fries, a high-margin menu item (we’ll say 65%) for most operators.
• Without tariffs, the average pre-shock price at chains is $5.11.
• By applying a 3% inflation rate and a 25% tariff on imported Canadian potatoes and canola oil, the post-shock price jumps to $6.55 in order to maintain that 65% margin.

Scenario 2B: Fries with 3% inflation + 25% tariffs on potatoes and canola oil + reduced profit margins

• For a chain wanting to avoid the tariff-induced price increase on fries outlined above, they can work backwards by adjusting the Post-Shock Profit Margin field (which will dynamically update Post-Shock Prices).
• To keep the post-tariff price in line with standard inflation pricing (which would have been $5.26 with 3% inflation), they’d need to lower their post-shock profit margin on fries to 33%, almost half of its previous 65%.

Start strategizing, not speculating

Head spinning with the possibilities this simulator opens up? This example is just the tip of the iceberg. With a volley of price shocks hitting the market from all sides — including soaring egg prices, minimum wage increases, looming tariffs, and stubborn inflation — data-driven models are key to being prepared instead of overwhelmed.

At Brizo FoodMetrics, our foodservice data and insights are ready to provide the foresight you need to proactively adapt and stay resilient in a constantly evolving market.

Eager to try it yourself? Request a demo of our predictive model…or get direct access to the underlying market data so you can build your own.

Have another idea? Tell us about it so we can create it for you!

About Brizo FoodMetrics

Brizo FoodMetrics equips industry leaders with the actionable foodservice data and insights needed to make informed decisions based on facts, not hunches. Unlock full market visibility, scale business growth, and streamline workflows with large-scale, granular, and up-to-date market intelligence covering over 2.1 million establishments.