Navigating Tariffs: Immediate Actions and Long-Term Planning

Whether tariffs are implemented or not, the immediate threat to consumers will have a lasting effect that brand managers must adjust to.

Tariffs present both immediate challenges and long-term considerations for Consumer Packaged Goods (CPG) companies as consumers are presented new affordability fears and shifting attitudes.

Tariffs can lead to increased costs, supply chain disruptions, and diverted energy into managing margins (vs building value). Tariffs can also offer opportunities for brands to differentiate themselves, build consumer loyalty, and combat misinformation.

What Consumers Want

Even before the tariff announcement, a significant number of consumers were concerned about affordability and price increases due to tariffs. For instance, a Harris poll indicates that two-thirds of Americans believe proposed tariffs will lead to higher prices.

This threat invokes fear and heightened awareness of imported goods, changing the attitudes of consumers long after the immediate threat is gone.

Additionally, transparency plays a crucial role in consumer purchasing decisions; over 90% of consumers say transparency by a brand is important to their purchase decisions.

While your brand’s benefits and features are important, consumers are looking for ways to avoid pain (the largest motivator) and want reassurances and clarity that build trust.

To address these concerns and position your brand for success, consider the following:

1. Adapt Your Messaging to the Current Environment

Short-Term: Proactively communicate how your brand is managing these changes to maintain trust.

Actions:

• Add messaging on your website (pop-up) and social channels to clarify pricing, and sourcing, and reinforce product stability (if you can).
• Update your FAQ page on your website addressing potential customer concerns.
• Collaborate with your social team to show transparency with an authentic post, even if you don’t have all the answers yet.
• For example: You can re-use a post and update it to include the local message at the start and in the post copy.

2. Embrace the 'Buy Local' Movement

Short-Term: Highlight local sourcing to appeal to consumers' preference for domestic products.

Actions:

• Run digital campaigns emphasizing local production ("Proudly Canadian" or "American Made").
• Increase the focus of local owners, producers, and farmers behind the brand – people care about people.
• Partner with local influencers to reinforce the message.
• Add shelf talkers, danglers, and packaging callouts (IRC or stickers) emphasizing domestic production.

3. Adjust Pricing and Promotions Strategically

Short-Term: Develop creative pricing strategies to manage increased costs without alienating consumers, or adopt a price strategy to steal share.

Actions:

• Consider "tariff-free" price guarantees (or rotations) for a limited time.
• Offset cost increases by offering multi-packs or bulk discounts using a digital coupon.
• Collaborate with retailers to create exclusive in-store savings and temporary price discounts (TPR).
• Re-evaluate line pricing and trade promotional groups to split out higher-priced or lower-priced items in your portfolio.

4. Optimize Media Spend for Value

Short-Term: Create backup plans for your paid media strategy to ensure efficient use of resources for a tarrif-imposed world.

Actions:

• Shift media spend toward high-intent audiences
• Invest in retail media networks where purchase intent is highest.
• Adjust programmatic and social ad copy to emphasize price stability and local sourcing.

5. Enhance Your Leadership

Short-Term: Use this time to demonstrate your leadership in navigating market challenges.

Actions:

• Have your CEO or CMO write an op-ed on how your company is managing tariffs responsibly.
• Create an action plan to determine actions and responses internally and invite others to participate.
• Offer expert commentary to media outlets covering tariff-related price changes.
• Create engaging LinkedIn content that educates and reassures customers, employees and stakeholders on the actions being taken.

6. Lasting Packaging and In-Store Marketing

Short-Term: Use physical packaging and in-store messaging to reinforce consumer trust.

Actions:

• Consider permanent packaging changes that highlight locally made production – this will need to be managed with supply chain, operations, and regulations as it could be restricting.
• Use end caps, shelf dividers, and pallet drops to highlight local messaging.
• Collaborate with retailers on local displays with other complementary brands.

7. Promote Alternative Category Choices

Short-Term: Communicate that your product or category can be a good substitute for a different tariff-affected category – either within your portfolio or competitor.

Actions:

• Adjust your website to highlight alternative product categories that are less affected by tariffs.
• Educate consumers on new product formats or ingredient alternatives via social media and a digital campaign. For example, if you are a producer of cranberry juice, positioning it as an alternative to orange juice using the same occasions and cues you could expect from an orange juice brand.

8. Strengthen Retail and E-Commerce Partnerships

Long-Term: Collaborate with partners to create mutually beneficial strategies and contingency plans.

Actions:

• Collaborate with retailers to create price stability incentives for bulk orders.
• Use e-commerce to push tariff-proof product bundles.
• Launch exclusive DTC promotions and add a product section on your website that highlights unaffected products (eg. Locally Made).
• If affected negatively by tariffs and are not able to adjust the supply chain in the short term - be transparent and reassuring – create a pop-up on the website and adjust product-specific pages to redirect people to other items.

9. Prepare for Competitor Disruptions

Short-Term: Adjust your reports and rhythms to have a closer eye on your competitors.

Actions:

• Monitor competitor pricing changes and communication reactions more frequently.
• Create contingency plans - if rivals are raising prices, how would we respond?
• Prepare search and social ads to target competitor shoppers with "better value" or “locally sourced” messaging.

10. Diversity: Ingredients, Distribution, and Innovation

Long-Term: Diversify your supply chain, distribution, and portfolio to mitigate future tariff impacts.

Actions:

• Work with R&D and procurement to explore alternative, tariff-free ingredients and ‘localized’ product innovation
• Market reformulated products as an "upgrade" rather than a compromise.
• Build a content series around your sourcing to reinforce transparency.
• Prioritize alternative distribution export opportunities to diversify volume - this is often supported by government grants and incentives.

Acting quickly to address both the short-term impacts and long-term implications of tariffs, CPG brands can maintain consumer trust, retailer loyalty, and potentially build market share—turning potential challenges into opportunities for growth.

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