How Utz Outsmarted Tariffs - And What Your Company Can Learn from It
As global trade tensions are on the rise, and tariff policies become increasingly unpredictable, many companies are finding themselves scrambling to mitigate their rising costs. As with any disruption, this presents opportunities for enterprises looking to capitalize on the challenge. This is precisely what snack food giant Utz Brands achieved as they teach the industry a masterclass on resilience.
In their recent Q1 earnings report, Utz has held a steady projection of its 2025 financial guidance despite the Trump administration’s new tariff policies that are putting pressure on the manufacturing sector. How is this possible? The Utz company has built a supply chain that’s practically immune to such disruptions.
The Utz Approach: Domestic Production as a Competitive Edge
According to a recent Supply Chain Dive article, Utz sources nearly all of its raw materials domestically and operates entirely within the United States. That means that their exposure to foreign tariffs – particularly those that are targeting raw material imports – remains minimal. CEO, Howard Friedman, explains that the company expects only a “modest impact” from tariffs, a sharp contrast to their competitors like Kellogg and Hershey, who are already seeing significant cost increases as they are revising their financial outlooks.
Utz’s foresight didn’t happen to stop with where they source their ingredients. They also launched a massive supply chain overhaul, which is now projected to save them $150 million by 2026 – which turns out to be roughly $15 million more than was initially estimated. Some of their key moves included:
This domestic and flexible supply chain has given Utz not just stability but also an advantage for growth. In Q1, net sales rose slightly to $352 million, and adjusted net income jumped 7.2% year-on-year to approximately $22.3 million.
What Other Companies Can Learn
While Utz’s strategy is based on availability of local source, it certainly offers a general roadmap for a lot of other manufacturers – not just in food but across various sectors – to safeguard against trade policy shocks. Here’s a few components to their strategy that can be leveraged by other manufacturers:
If your input comes from overseas, you’re considered to be vulnerable at this time. Companies should explore local or regional sourcing alternatives, even if they come at a slight premium. The long-term stability and insulation from such tariffs can offset the initial costs.
Utz’s investment in U.S. - based production and distribution not only avoids tariffs but reduces logistics costs and improves time to market. Other firms can follow suit by:
The $150 million Utz expects to save isn’t just considered to be a bonus – it's strategic fuel. Companies should consistently look for opportunities to streamline operations, automate where possible, and reduce waste. Cost savings in today's time can become margin protection for the future. Moreover, localized production allows for greater visibility into sustainability initiatives that many of Utz’ customers would consider an imperative.
Tariffs aren’t the only geopolitical risk. A supply chain that’s geographically concentrated or dependent on a small number of suppliers is vulnerable. Utz’s flexible, U.S. - based network gives it options – and that agility is invaluable.
The Bottom Line
Utz is providing that smart supply chain decisions aren’t just operational choices – they're strategic weapons. As global trade grows more volatile, companies that invest in domestic production build resilience, and think long-term will be better equipped to weather the storm. Further, a supply chain that is closer to the consumer is a more resilient and sustainable supply chain – two trends that continue to drive board room minutes.
For business watching costs rise and margins shrink, the Utz blueprint might be just the snack-sized solution you’ve been looking for.