Craft breweries in Will County feel ‘the hurt’ of aluminum tariffs

Will County — The Trump administration’s tariffs on all aluminum and steel imported in to the United States is expected to impact not just large manufacturing but small businesses as well.

The measure puts 25% tariffs on all imported aluminum no matter the source, including from U.S. ally Canada, where most U.S. aluminum imports come from, according to the Associated Press.

One of the most common uses of aluminum is packaging, including soda and beer cans. While large beverage producers will likely increase prices as a result of the new tariffs, small, local businesses like craft breweries will likely see their already-thin margins more severely impacted.

“Anytime prices go up it’s hard,” said Paul Ivnik, who owns Nik & Ivy Brewing Company, a craft brewery in downtown Lockport. “It’s a big percent change. Right now when I buy cans, I can get 6,500 for about $1,000 and that lasts us a month. With a 25% tariff that’s going to bring us up to $1,250 a month, so that’s another $250 out of our bottom line automatically. It’s going to hurt.”

Ivnik said while the increased supply cost will hurt, he considers himself fortunate that the majority of Nik & Ivy’s business is in store.

“Luckily we don’t do a ton of distribution that way compared to some breweries, but it sucks,” Ivnik said. “Most breweries are strapped for cash most of the time. I do like five jobs here on a regular basis and we’re breaking even. Nobody is making a lot of money in this business.”

Ivnik said if the costs start to increase he will have to consider raising the cost of his canned beers to keep up.

“It’s hard, because we try to price aggressively to not be too much higher than the grocery store brands, but if we don’t we’ll start to feel the pain, and craft brewers are going to be hurt much more than the big brands by this,” he said.

“Ultimately, our state’s small business owners and the customers they serve will pay the price for these proposed tariffs.”

—  Ray Stout, president of the Illinois Craft Brewers Guild

That sentiment was echoed in a statement from the Illinois Craft Brewers Guild, whose president Ray Stout said “the proposed tariffs would be detrimental to Illinois craft breweries and other small businesses that are already navigating a period of tremendous economic uncertainty.

“Since the pandemic, our members have seen record price increases across their supply chains, and levying additional tariffs to key production inputs like aluminum and barley will further test their already razor-thin margins,” Stout said. “Ultimately, our state’s small business owners and the customers they serve will pay the price for these proposed tariffs.”

There are more than 300 craft breweries in the state of Illinois, according to the Illinois Craft Breweries Guild, the majority of which are in the Chicago area. Joliet, Lockport, Plainfield, New Lenox, and Shorewood are all home to craft breweries in Will County.

“It’s crazy,” said Brandon Wright, who owns Werk Force Brewing Co. in Plainfield with his wife Amanda. “There has not been a lot of communication around this or how long it’s going to last. Is it for 90 days, a year? It’s like the wild west.”

Wright said that it is not just aluminum tariffs that could impact breweries, but also steel and tariffs on Canadian imports in general if they are reinstated after the 30-day hold put in place earlier this month.

“All of our brewery equipment, the tanks and kegs, is culinary grade stainless steel, and our bottles all come from Canada,” Wright said.

“Right now, the Canadian tariffs are on hold, but we don’t know if they’re coming back,” he said, “and if we want to expand or get new equipment, tanks cost at least $15,000 each, and that’s just for small operations They can go up to $60,000, if you put an extra 25% on that, that’s terrifying for a small business.”

Wright said he and other brewers he has talked to do not want to raise prices on their customers, and he believes he personally will not need to in the immediate future.

He said that is partially because he placed an “11th hour” order this week for an additional truck’s load of cans – approximately 160,000 – which should last a little over a year.

“That was a lot of overhead I put out for that,” Wright said. “I probably didn’t have to, but I wanted to hedge our bets. We learned to pivot during COVID, it’s how we stayed alive, and I just don’t trust this administration to look out for us as business owners with this.”

Wright said he was happy to see that suppliers in the U.S. had not yet increased their prices to reflect the tariffs on materials that were already in the country, noting that that was a fear many businesses were facing.

“We didn’t know if they would tack it on because they could,” he said. “So far, we haven’t seen that. I think they realize that if the breweries go away that’s going to hurt them too. We all have to stick together to make it through this.”