MW How Starbucks and other companies will benefit as tariffs on coffee and bananas are cut
By Tomi Kilgore
President Trump's trade deal with four countries in Latin America could lower prices for coffee, bananas and beef, which have been sore spots for a number of American companies
The Trump administration's move to lower coffee, banana and beef tariffs could help the earnings of companies like Starbucks, Fresh Del Monte, Hormel and others.
The Trump administration's latest trade deal with four countries in Latin America may be aimed at providing some relief to strapped consumers, but it could also provide a nice boost to the bottom lines of a number of U.S. companies.
While companies have started downplaying the impact of tariffs on their profits over the past several months - with many looking to reroute where they get supplies, cut expenses and pass some of the higher costs on to to consumers - the impact on pricing and demand continues to trickle down to earnings.
So any deal to lower tariffs and open up trade would be welcome - and there are a number of companies that could benefit from the latest trade deals signed by President Trump with Argentina, Ecuador, El Salvador and Guatemala. With these agreements, the Trump administration is looking to eliminate tariffs on coffee, bananas and beef, the Wall Street Journal reported.
Here's what a number of companies have said in recent calls with Wall Street analysts about how tariffs and inflation have impacted their businesses.
Starbucks talks tariffs and coffee prices
Starbucks $(SBUX)$, which bills itself as the world's "premier roaster, marketer and retailer" of specialty coffees, has talked about how tariffs have impacted its profitability.
In April, just weeks after the Trump administration's bombshell "liberation day" tariff announcement, Starbucks said it wasn't actually tariffs on coffee that would hurt it the most, but rather merchandise sourced from China and other imported beverage components.
But since then, the company has said tariffs were one of the reasons it made less money on its sales.
Chief Financial Officer Cathy Smith told analysts in late October, according to a FactSet transcript, that fiscal fourth-quarter consolidated operating margins - the percentage of sales that actually make it to profits - dropped to 9.4%, from 14.4% a year ago, "primarily driven by inflation, led by coffee prices and tariffs," as well as higher labor costs.
In July, Smith had said that given the "dynamic" environment surrounding tariffs and coffee prices, she didn't expect coffee cost increases to peak until the first half of 2026.
In that case, any action the Trump administration takes could speed up that peak.
Starbucks's stock fell 1.2% in Friday's trading, though there's more going on at the company than just tariffs and earnings. The shares have lost 7.1% in 2025.
Read: Here's what's different about this year's Starbucks strikes, as union drive nears 4-year anniversary.
Dunkin', Folgers parent has had to raise prices
J.M. Smucker $(SJM)$, which owns the Folgers, Dunkin' and Cafe Bustelo coffee brands, has pointed out in recent earnings calls that to deal with tariffs and resulting inflation on coffee products, it's had to raise prices.
At first, the company said consumers seemed OK with the price increases, as sales held better than expected. But as time has passed, consumer behavior has changed and Smucker's bottom line has suffered, as tariffs have increased coffee costs by more than anticipated.
In the company's latest earnings report released in late August, U.S. retail coffee sales rose 15% - but only because a 18% year-over-year increase in prices helped offset a 2% drop in volume. Meanwhile, the segment's profit sank 22%.
At the time, the company said that given the new tariffs, it expected coffee prices for the full fiscal year would increase in the mid-20% range from the year before. Just three months earlier, the company has expected prices to be up 20%.
The stock inched down fractionally Friday and has lost 0.9% this year.
Fresh Del Monte passes on tariff costs
Bananas may not be Fresh Del Monte Produce's $(FDP)$ biggest product segment, but they are an important part of its offerings, as they accounted for 35% of the latest quarter's business.
In that quarter, Fresh Del Monte's banana sales rose 3.7% from a year ago, but that was only because of higher prices - including "tariff-related price adjustments in North America" - because the volume of bananas sold actually declined.
The company did not provide any details on how tariffs affected sales, but it did say it was able to "pass on the tariffs" in North America.
Profitability in the company's banana segment is expected to decline as supplies drop and costs increase. And while those issues may be more a result of a disease affecting banana crops and weather-related supply disruptions, any help the Trump administration could provide on prices may help boost demand and sales volumes.
The stock slipped 1.4% Friday, but has gained 6.7% in 2025.
Tariffs have hurt Hormel's earnings
Hormel Foods $(HRL)$ has seen its stock tumble lately; it closed Oct. 30 at a 12-year low, as beef prices that have risen to nearly all-time highs have been a "persistent inflationary headwind" to sales, it has said.
While the higher beef prices aren't necessarily a direct result of tariffs - and are more about historically low cattle supply due to factors including drought and rising costs for land and feed - any trade deal that would help increase that supply could lower prices for consumers and boost Hormel's earnings.
But that doesn't mean tariffs aren't also an issue for Hormel's business, which also includes chicken and port. The company said in its latest earnings report that tariffs would reduce its 2025 earnings by 1 to 2 cents a share. That compares with the current average analyst estimate, compiled by FactSet, for 2025 earnings per share of $1.38.
The stock shed 0.1% Friday, but has dropped 27.8% this year.
-Tomi Kilgore
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November 14, 2025 16:30 ET (21:30 GMT)
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