Tariff Uncertainty Hits Close to Home for Craft Breweries
As new tariffs on aluminum and steel loom, small breweries across the country are bracing for higher costs—and those in North Carolina are feeling the pressure more acutely than most.
The state now leads the nation in craft brewing, according to a 2024 report that ranked North Carolina as the No. 1 state for craft breweries. But this leadership position comes with a new kind of exposure: when the price of imported materials rises, it directly affects both the production and taproom sides of a brewery’s business.
🔧 Brewing Operations: Feeling the Squeeze
Tariffs on Aluminum and Steel Threaten Production Margins
Many brewing systems and components rely on imported steel and aluminum. With the Trump administration recently doubling tariffs, brewers are already seeing the ripple effects.
“Two of our aluminum vendors immediately reacted when the threat of tariffs was announced earlier this year,” said Les Stewart, co-owner and chief brewing officer of Trophy Brewing in Raleigh, in an interview with the Carolina Journal. “The vendors announced a 3% increase and warned that the rise could go up due to the volatility of the trade climate.”
While Trophy Brewing has so far only seen a minor price bump, Stewart shared that some of his peers have been told to expect increases of 15–20%. The uncertainty itself, he says, is the real challenge.
“It’s the volatility that causes the uncertainty. That really scares us more than anything.”
🍺 Taproom Impact: Hospitality Costs and Consumer Behavior
When Material Prices Rise, Everything Gets More Expensive
Even breweries with a strong taproom presence can’t escape the impact of tariffs:
- Imported glassware, furniture, or kitchen equipment may now cost more.
- Ingredient pricing for menu items—cheese, meat, spices—may jump.
- Custom branding materials like shirts and hats, often manufactured overseas, now carry higher overhead.
Meanwhile, consumer discretionary spending is tightening in an inflation-conscious economy, and craft beer—while beloved—is not immune to budget cuts.
📈 Long-Term Economic Impact on the Industry
According to the National Brewers Association, 76% of all packaged beer in the U.S. is sold in aluminum cans. That makes tariffs on aluminum particularly threatening to small and independent breweries, especially those that lack the scale to negotiate or absorb rising prices.
“Steel tariffs also will increase the price of supplies relied on by America’s small and independent brewers,” wrote Marc Sorini, the association’s vice president of government affairs. “Most steel kegs used in the U.S. are sourced from European Union countries.”
Further, Sorini pointed out that brewing equipment and its parts are often imported from China or the EU. For North Carolina breweries—ranked eighth in production and tenth in total economic impact—these challenges could reshape future growth.
🚚 Why Small Breweries Are More Vulnerable
Larger beverage companies can hedge against cost increases by buying in bulk or stockpiling materials. That’s not the case for small breweries like Trophy Brewing.
“We don’t have the same luxury,” said Stewart. “If aluminum costs keep rising, we may need to shift more of our focus to draft beer.”
Draft sales—especially through a brewery’s own taproom—could help bypass some of the worst cost pressures. But with tight margins, small operators can’t pivot as quickly as global conglomerates.
💡 A Brewing Strategy for Uncertain Times
So, what can small breweries do to navigate this unpredictable environment?
- Localize Your Supply Chain
- Use regional maltsters, hop growers, and local vendors when possible. This not only supports community but buffers against foreign material tariffs.
- Diversify Revenue Streams
- Taproom events, beer clubs, food collaborations, and exclusive merch drops can provide a cushion when packaging or ingredient costs spike.
- Communicate With Customers
- Transparency builds trust. If prices go up, explaining the “why” helps loyal fans stay loyal.
- Plan for Flexibility
- Prepare for multiple scenarios: mild increases, sharp jumps, or further delays in tariff enforcement. Flexibility in operations will be key to survival.
⚠️ Final Word: The Real Danger Is Volatility
Stewart points out that the uncertainty itself may be more damaging than the tariffs.
“If tariffs were suddenly cranked to 10%, it could be much more detrimental than the ‘boil the frog’ approach, where there’s a 2% increase this year, 2% next year, and so on.”
Even if much of a brewery’s supply chain is domestic, global market volatility still influences prices. And in an industry already battling rising labor costs, tighter distribution, and increasing competition, every percentage point counts.
As trade policy continues to shift, North Carolina’s world-class breweries—and others like them across the U.S.—must remain agile, informed, and community-connected. Because in today’s craft beer economy, brewing great beer is just the beginning.
Attribution: Adapted in part from The Carolina Journal, written By Katherine Zehnder .
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