Commercial and Retail Bakeries NAICS 311811, 311812

Aug 20, 2025 - More Tariff Trouble

• Retail bakeries that serve coffee along with baked goods face higher costs now that President Trump has slapped a 50% tariff of imports from Brazil, which supplies about a third of US coffee. The steep tariff took effect on August 6 despite efforts by US coffee companies – including Starbucks – industry associations, roasters, and Brazilian trade representatives to secure an exemption for coffee imports. Cafes and bakeries, which were already facing a 10% tariff and higher prices for beans due to adverse weather conditions in producer countries that have caused supply shortages, are bracing for impact. The US imports about 24 million 60-kilogram bags of coffee annually, with Brazil accounting for 34% of that volume.
• Tariffs on imports from the US’s top three trading partners are expected to cost the baking industry about $454 million this year, according to the American Bakers Association (ABA). This figure includes $244 million due to a 25% tariff on imported ingredients such as flour blends and sweeteners from Canada, $170 million due to tariffs on goods imported from Mexico, and $40 million from a 10% tariffs on Chinese goods, according to ABA. Also, a 125% tariff levied on certain imports from China in April to curb US reliance on foreign manufacturing is raising the cost of packaging and baking equipment. In July, President Trump threatened to raise the tariff on goods from Canada to 35%, with an exemption for goods that comply with the US-Mexico-Canada Agreement applying for now, according to the White House.

• Hostess reported a 12% increase in Twinkies sales last year, driven by limited-edition flavors, collaborations with brands like Dunkin’ and Hershey’s, and a viral TikTok challenge. According to IRI retail data, US sales of the golden spongy snack cake reached $150 million last year, their highest level since the 1990s. Twinkies disappeared from the market briefly in 2012 when Hostess filed for bankruptcy but soon returned by popular demand. The J.M. Smucker Company acquired Hostess Brands in 2023 and savvy marketing has breathed new life into the classic snack cake. The release of “Mystery Flavor Twinkies” helped to drive interest and sales last year. Moreover, bakeries and home cooks have started using Twinkies in cake recipes, further driving sales and introducing Twinkies to a new generation.
• Producer prices for bakery products rose 2.5% in July compared to a year ago, after rising 1.9% in the previous July-versus-July annual comparison, according to the latest US Bureau of Labor Statistics data. Industry producer prices for both commercial and retail bakeries are near all-time highs amid rising costs for ingredients, labor, and other inputs. Employment by bread and bakery product manufacturers remained flat year over year in June, while the average industry wage rose 3.4% over the same period to a new high of $23.09 per hour, BLS data show.