Tariff Turbulence: What Consumer Goods Companies Need to Know

Consumer products manufacturers (especially those operating in the US) are navigating a tough mix of pressures, including cautious consumers, flatlining volumes, and stranded Covid-19–era capacity. New tariffs introduce another layer of volatility, at a time when pass-through pricing is harder to execute and quick cost wins are largely exhausted.

The good news: Companies in consumer goods may be less exposed than other sectors. Many have maintained relatively localized supply chains, limiting the direct tariff impact to select inputs such as packaging. But vulnerabilities remain, especially for categories reliant either on agricultural inputs such as coffee, cocoa, or spices, where domestic substitutes are scarce, or on provenance-bound finished goods such as spirits.

The bigger challenge likely lies in what comes next. Beyond tariffs, leaders must prepare for second-order effects such as consumer backlash abroad, a potential recession, shifts in consumer brand perception abroad, and the accelerating shift to a post-global world.

The window for action is now. Tariffs may be the spark. But as with past disruptions, the boldest consumer goods companies will use this moment to strengthen their foundations and reshape how they win. Leaders will move decisively on three fronts:

• They will act now to mitigate tariff risk.
• They will reshape for what’s next.
• And they will power it all through cost.

Act now to mitigate tariff risk

• Map your risk and theirs. Understand tariff risk by assessing import exposure (raw inputs and finished goods) and consumer elasticities in impacted categories. Benchmark against competitor positioning to identify where you're vulnerable and where you have an advantage.
• Seize strategic advantage. Identify opportunities to turn strength into market share or profit by moving decisively. Secure advantaged inputs, realign pricing and portfolios, and deepen retailer relationships to win share while others hesitate.

Reshape for what’s next

• Take no-regrets action on recession preparedness. Redesign products, selectively shift portfolios, and adapt revenue growth management playbooks to meet consumers where they are. Preserve margin through targeted pricing and promotion shifts, and double down on high-performing segments.
• Build for a post-global world. Rewire supply chains for regional flexibility and traceability. Reallocate capital and talent toward local market growth and future-fit capabilities.

Power it all through cost

• Take no-regrets actions on cost. Unlock efficiency across procurement; manufacturing; and selling, general, and administrative expenses. Monetize underperforming assets. Reinforce the cost engine that funds growth and resilience regardless of where the macro environment heads next.