Operating Cost Headwinds
In addition to growing concerns over cost increases and the inability to raise prices accordingly, a March 2025 Technomic survey underscored the fact that operators, at least as of late March, had yet to lose confidence in their ability to navigate the market. Why? Because they’ve “previously navigated even choppier waters,” notes Rich Shank, senior principal and vice president of innovation at Technomic, in a whitepaper analyzing the survey results. In addition to consistent consumer demand for foodservice, he asserts, the nimbleness that operators showed during the pandemic will help many to weather this storm, as well.
Current Tariff Impact on Operator Purchasing
Specific to the impact of tariffs, in March 2025, Technomic surveyed 500 operators asking, “How much are the following business purchases impacted by tariffs due to imports from targeted countries?” While still early in the game, responses showed impacts already being felt across diverse categories.
|
Items Purchased | % of Operators Reporting an Impact |
|---|---|
| Food ingredients | 70% |
| Equipment | 64% |
| Disposables | 61% |
| Beverages | 48% |
| Uniforms | 40% |
Source: Technomic March 2025 tariff survey
Tariff Prep
Technomic’s tariff survey data shows top actions taken thus far by operators preparing for more tariff-related headwinds include:
| Increasing local sourcing | 40% |
| Raising prices | 31% |
|
Examining each SKU for tariff-related price changes |
28% |
| Stockpiling key purchases | 20% |
| Reducing portion sizes | 19% |
| Renegotiating contracts | 17% |
Rahul Shrivastav
State of Mind
Rahul Shrivastav
Executive Director of Dining & Hospitality
Bloomington, Ind.
Chair
National Association of College & University Food Services (NACUFS)
From the last two major economic bumps — the pandemic and the recession — our industry has learned a lot about how to be flexible, to modify menus to get the right foods to our students while also meeting pricing pressures. That’s where we are again, but there’s one thing that we emphasize loudly and repeatedly in NACUFS and in our own business: Control the controllables, and move forward where you can.
So far, as of early April, we haven’t seen a lot of effect in any direction with food costs and supply chain, etc., but a major benefit for us here at IU is that we’ve always focused on buying local as the best way to bring the freshest, most nutritious food to our students. We’re also fortunate because we are just ending a major capital renovation cycle, getting our last large dining hall renovated before the next round of equipment price increases is likely to hit.
Reasons for optimism: One thing that seems to come out of tough economic times, as it did around 2008, is a return to basic comfort foods. I’m excited about that because it gives us an opportunity to get creative with the basics. I’m also excited about the fact that, despite global economic turmoil, interest in and demand for global cuisines continues to be so strong.
