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Summary of diving:
- CEO and vice chairman Hilton Schlesberg said on a Nov. 6 earnings call that Monster Beverage expects the tariffs to have a “moderate” impact in the current quarter and next year, primarily due to higher tariffs on imported aluminum for cans.
- According to Schlosberg, the tariffs significantly affected Midwest’s premium for aluminum and increased the cost of the cans the company buys from suppliers. The Midwest premium is an additional charge applied to the base price of aluminum delivered to the region. This can reflect factors such as energy and transportation costs, as well as the impact of trade conflicts, including tariffs.
- “We will continue to recognize aluminum tariffs through higher Midwest premiums and continue to implement mitigation strategies across the business where possible,” the CEO told investors.
Diving Insights:
In February, Schlosberg said the company would take a wait-and-see approach to reducing tariffs and raising prices, noting that it was too early to formulate a response. Since then, tariffs imposed by President Donald Trump on imported aluminum have forced the company to pay higher costs.
“Based on our business model, we do not believe the current tariffs will have a material impact on the company’s operating results,” Schlosberg said. However, we expect the effects to be small in the fourth quarter of 2025 and in 2026.
This year, Midwest premiums hit an all-time high in November, Blake Hortick, managing editor of market intelligence firm Argus Media, said in an email.
“The 50 percent tariff on Section 232 imports has been the main driver,” Hortik said. to refer Duties that Trump imposed early this year
Schlossberg said Monster raised prices, but the increases were not directly tied to tariffs and instead focused on revenue growth, adding, “Our pricing strategy takes into account consumer buying behavior, brand momentum, channel and package mix.”
Other food manufacturers have also struggled with the impact of aluminum tariffs this year. In September, Campbell Co. reported that a lack of domestic supply of some steel derivatives used for canning has prevented the company from fully offsetting the effects of the tariffs. The company expects to reduce tariff costs by 60 percent in fiscal 2026.
“There is not enough capacity in the U.S. or available supply in the U.S.,” CEO, president and director Mick Beekhuizen told investors. “If it was available, we would buy it locally.”
Editor’s note: This story was first published in our weekly logistics newsletter. Register here.
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