Baking Through Uncertainty: Navigating US Tariffs
13th May 2025
With the recent implementation of a 10% baseline tariff on US imports by President Trump, the food and drink industry is once again facing a wave of uncertainty. While the immediate impact on UK businesses might seem minimal, the broader ripple effects – from rising supply chain costs to shifts in consumer behaviour – are impossible to ignore.
In times like these, businesses need more than just good products – they need smart strategy, strong brand positioning, and the agility to adapt.
How Consumers React
When economic uncertainty strikes, consumer habits shift quickly – and, often, predictably. According to recent Mintel research, foodservice is often the first to be cut when household budgets tighten.
But it’s not all doom and gloom.
While out-of-home dining may temporarily decline, in-home consumption tends to rise. Retail channels and bakery products that offer comfort, convenience, and familiarity often benefit. The focus shifts to value – but not just in terms of price. Consumers are actively looking for products that feel worth it.
Enter the ‘lipstick effect’. Even in tough times, people treat themselves to small indulgences. That’s why premium, comfort-driven brands continue to grow. The opportunity lies in positioning products as affordable luxuries – everyday treats that feel special without breaking the bank.
Innovation Isn’t a Bonus; It’s a Business Essential
Standing still is not an option. In fact, one of the biggest risks during economic turbulence is doing nothing at all. With private label on the rise and interest rates shifting, the businesses that thrive will be the ones that move quickly, strategically, and creatively.
Recent success stories in food all have one thing in common: innovation. Whether it’s health-forward formulations like high-protein bakes or creative flavour extensions that offer a sense of safe adventure, growth is coming from brands that dare to evolve.
Now is the time to explore how your business can deliver foodservice-quality experiences at home, offer something new to value-conscious shoppers, or create reasons for customers to keep coming back – even when times are tight.
Trust Is Your Most Powerful Ingredient
In volatile times, trust is more than a nice-to-have – it’s a market advantage. Consumers gravitate towards brands that feel dependable, familiar, and transparent.
Emphasising your British heritage, craftsmanship, and consistency can resonate strongly too. Now is the time to highlight what sets you apart – your sourcing, your people, your quality standards – and become a reliable and stable pillar within the industry. Trusted brands don’t just win sales, they win loyalty.
What’s Next?
These tariffs are just one of many challenges facing foodservice and bakery businesses today – but they’re far from insurmountable. The key is staying close to your customers, understanding how their needs are evolving, and responding with creativity, agility, and confidence.
The bakery sector has weathered its fair share of storms – from recessions to pandemics – and has emerged stronger each time. By doubling down on the fundamentals of quality, value, innovation, and trust, you’ll not only navigate this new landscape, you’ll lead in it.
At Kara, we’re here to help you turn uncertainty into opportunity. Whether you’re rethinking your range, exploring new routes to market, or simply looking for ways to better serve today’s value-conscious consumer, we’re by your side. From emerging trends to everyday essentials, our wholesale bakery solutions are designed to support your success – no matter what the market throws your way.
Get in touch today to explore how we can help futureproof your menu, or browse our product range to discover what’s next for your business.
