Wilson Reiser, CEO of Piqua-based Winans Coffee & Chocolate, said his company hasn’t yet increased prices to consumers as a direct result of his increased production costs, opting instead to absorb the cost in Winans’ bottom line.
“I think we’re doing what most companies are doing,” Reiser said. “We’re eating it. We’re waiting.”
Balancing costs with customers’ needs
Coffee accounts for half of Winans’ manufacturing business, Reiser said.
The tariffs have been “an incredible hit” to the coffee portion of his business, Reiser said, but he’s more concerned about the growing fatigue of consumers who have watched prices trickle up.
The price of a pound of Arabica coffee is up 40% to 60% on commodity markets since Jan. 1 due to a combination of factors, including weather, supply chain costs and tariffs, according to Trading Economics, which follows economic indicators and commodity prices. Brazil accounts for 40% of the world supply of Arabica beans, according to the U.S. Department of Agriculture.
Suppliers and retailers that have announced coffee price increases due to tariffs include J.M. Smucker Company, which makes Folgers, as well as Walmart, Costco and Target.
Reiser said he’s reluctant to follow suit with short-term fixes like price increases since the company plans to grow in the long term.
“What we really want to do is maintain our customer base. We don’t want to erode consumer confidence,” he said.
It’s a tricky dance for local businesses who have to balance their operating costs while keeping the people who buy their products and services from going elsewhere.
Companies are also trying to plan for their futures without having all the facts.
“The tariff policy discussion is creating uncertainty about the future,” said Chris Kershner, president and CEO of the Dayton Area Chamber of Commerce. “It is hard for businesses to plan for sales six months from now if they don’t have confidence in their costs. Dayton area businesses are extremely adaptable, and they will adjust when they have cost certainty.”
Adapting business operations
Cost isn’t the only factor muddying things.
Michael Thomas, owner of Poppets Coffee and Tea in Dayton, said everyday business tasks are more complicated under the new tariffs especially given fluctuations.
Poppets’ No. 1 tea supplier is in Montreal. The tariff on products coming into the U.S. from Canada went to 35% on Aug. 1. In addition, his supplier gets its tea from Sri Lanka, which is under a 20% tariff.
“It takes a team of lawyers just to understand what needs to be charged on a single invoice,” Thomas said.
Poppets is going forward with plans to open a new location at 1006 E. Dorothy Lane Oct. 13 in spite of tariffs and an uncertain economic climate.
Thomas said he hasn’t been hit as hard by tariff costs as some other local coffee roasters because of “dumb luck.”
Poppets locked in prices on specific amounts of coffee beans last year before tariffs went into effect. Brazil is his No. 1 supplier. The final 1,000 pounds of the contract was delivered in August.
The question now is what comes next?
Thomas said he’s looked into finding U.S.-based suppliers for coffee and tea as an alternative. The problem is there simply aren’t any outside of small farms in California, Hawaii and Puerto Rico.
The customers he’s talked to have been supportive. As a specialty coffee supplier, they expect to pay a little more for a quality product, and understand Poppets may have to add a few cents to each cup.
Thomas said he won’t raise prices simply because everyone else is. But eventually something will have to give.
“It’s a big fear for us,” he said.
‘I was literally quoting math’
A number of Dayton area coffee roasters are fearful of more than just rising prices. They’re worried about alienating anyone by discussing tariffs at all given the hot-button issue they’ve become.
Three roasters declined to comment for the story, citing a reluctance to anger one side of the political spectrum or the other and lose their business.
“This to me is not a political issue. It’s just an issue,” Thomas said.
Secret Chamber House of Oddities and Artwork owner Cherish Harrell Brooks found out firsthand just how polarizing the political environment is when she started posting shipping invoices in the window of her Fairborn shop and on her Facebook page.
“I had so many people coming to me on so many sides, and I was literally quoting math,” Harrell Brooks said. “People supported me. People said I was lying.”
She said she was shocked the first time she received an inventory shipment from England this year and saw the tariff effect.
Resale items she purchased from overseas vendors ended up costing her more than the prices she was charging, sometimes as much as double, she said.
Adding to that, service charges and late fees accumulated while trying to sort out if she’s being charged correctly, and Harrell Brooks has been forced to raise prices on items just to cover costs.
Whether it’s the merchandise itself or the paper it’s wrapped in or the price stickers that go on it, everything is costing more, she said.
“There’s nothing, when you get down to it, that didn’t come from somewhere else,” she said. “That’s the world.”
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