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Lower Tariffs, Higher Margins, And Four Companies Taking Advantage

Author

Noah Zelvis
November 19, 2025

The White House just rolled back levies on beef, coffee, and a basket of grocery staples, and it kicks in retroactively.

That takes some heat off your food bill and off company input costs, which is exactly what you want in wobbly growth.

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Macro Analysis

Food got the first real tariff truce. Beef and coffee come off the naughty list, along with fruits, nuts, and spices.

That nudges the near-term inflation mix friendlier and gives operators fresh room to sharpen price points, run promos, or just let margins breathe.

The political read is simple: affordability wins votes, so this rollback likely sticks, even as the administration keeps pressure on heavy industry with other tariff tools.

What you should expect next:

  • Retailers and restaurants test small price trims and targeted offers to stoke traffic.

  • CPGs and roasters blend cheaper inputs into 2026 cost guides rather than spray it all at once.

  • Distributor and specialty food margins get a little tailwind as contract pricing catches up.

Translation for you: you want exposure to businesses that either pass through less cost or capture the spread.

Favor domestic earners tied to food baskets and dining out, with balance sheets that do not need heroics.

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Actionable Moves

  • Stage buys. Start your position, add on any headline wobble about “temporary” relief.

  • Watch the inputs that matter. Beef cutout values and arabica futures will tell you if the squeeze really loosens.

  • Prefer operators that can choose. If they want to take price to drive traffic, great. If they want to bank margin, also great.

  • Keep a quality core. Mid caps with clean leverage and steady unit growth give you multiple ways to win.

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Top Picks

Sprouts Farmers Market (SFM)

If produce, nuts, coffee, and spices get cheaper at the dock, Sprouts has the merchandising to show it in the aisle.

You get a health-centric banner with private label muscle and a fresh mix that skews right into the tariff rollback basket.

That creates room for sharper weekly ads and trade-down capture from conventional grocers without wrecking gross margin. 

Sprouts has been quietly optimizing distribution, reducing shrink, and leaning into natural staples that shoppers buy every single week.

Lower commodity costs let you highlight value on end caps, lift units, and still hold mix.

Key watch items are wage and shrink noise and any abrupt produce volatility, but this setup gives you a clean path to comp stability while the rest of grocery plays pricing defense.

Dutch Bros (BROS)

Cheaper green coffee is the gift that keeps on dripping.

As arabica input costs ease with tariff relief, you get options: hold price and expand shop-level margin or feed value back into limited-time offers to keep the line moving.

Dutch Bros is still in build-out mode, which means every basis point of cost relief stretches further when you open the next wave of shacks.

The model thrives on throughput, app loyalty, and craveable drinks that are easy to promo. You also avoid the heavy international FX drag since this is a domestic growth story.

Risks are the usual new-unit cadence and labor availability, but with input headwinds easing and demand for affordable treats intact, you have a cleaner runway into 2026.

Bloomin’ Brands (BLMN)

Outback lives on beef. A tariff break on imported product does not rewrite the cattle cycle, but it does cool one of the hotter line items for a value-oriented steakhouse.

That gives you flexibility to protect portions, test tighter price points on popular cuts, and drive traffic in a category that moves with paycheck confidence. 

Add in operating wins on kitchen simplification and off-premise, and small changes in food cost can flow nicely to restaurant-level margins.

You are paid to wait with a reasonable valuation and buyback potential if cash flow firms up.

Keep an eye on promo intensity across casual dining and any surprise softness in weekend traffic, but the cost stack just got a friendlier tweak.

John B. Sanfilippo & Son (JBSS)

Nuts and snack mixes sit right in the carve-out zone. JBSS sources globally and sells across retail and foodservice with brands you actually see, like Fisher, plus a significant private label footprint.

Lower duties on nuts and spices let you defend shelf pricing in grocery while protecting gross margin, or lean into value packs that increase velocity without margin surrender. 

The company has a long record of cost discipline and pricing agility when commodities swing, and this is one of those rare moments where the wind shifts in your favor.

Risks include crop yields and contract timing, but if shoppers return to pantry snacks as prices ease, you own a tight ship at a mid-cap size that still flies under most radars.

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Bottom Line

Food tariffs rolled off and your playbook got simpler. Own the operators and enablers that either pass savings to drive traffic or bank them to fatten margins.

You do not need a macro miracle when cheaper beef and beans already nudge the P&L your way.

Start positions, add on noise, and let mid-cap compounding do the heavy lifting while the politics of affordability keep working for you.

That’s it for today’s edition—thanks for reading! Reply to this email with any feedback or let me know which macro trends or markets you’d like me to cover next.

Best Regards,
—Noah Zelvis
Macro Notes