Published March 4, 2025

Let’s be blunt…

The food & beverage industry is about to see an insane increase in cost of goods due to tariffs (both on imported and exported goods), supply chain disruptions and agricultural labor shortages. And these price increases will not be in a “things are getting a little tight” kind of way — but in a “this industry is about to get punched in the face” kind of way.

For years, hotel F&B has been squeezed by ownership groups demanding higher profit margins, handcuffed by corporate purchasing agreements that prioritize consistency over creativity and bogged down by uninspired menus designed for efficiency rather than guest excitement.

Now? Everything is about to get a whole lot more challenging than ever imagined.

Here’s what’s happening:

• Tariffs on imports from Canada, Mexico, and China will jack up prices on everything from beef, seafood, and dairy to alcohol, packaging, and kitchen equipment.
• Mass deportations of agricultural workers will cripple U.S. food production, leading to higher costs and frequent shortages.
• Retaliatory tariffs from our trade partners will choke off U.S. food exports, disrupting supply chains and forcing hotels to pay more for basic ingredients.

The impact? Expect your COGS to rise by 10-30%, labor costs to keep climbing and guests to push back hard against any price hikes you try to pass on.

This is NOT a temporary shake-up. This is the new reality.

So the question is: Are you going to keep running your F&B operation the way you always have, hoping things level out? Or are you ready to rip up the old playbook and actually compete?

Here’s the deal — if you don’t pivot NOW, your F&B operation won’t survive.

1. Your Menu is a Problem — It’s Time to Fix It

Let’s get something straight: most hotel menus are not designed to impress. They’re built for efficiency, consistency and brand compliance — but not for excitement.

And that is a problem. Because if you are about to start paying 25% more for ingredients, you need to make sure your menu is.

• Profitable as hell.
• Flexible enough to adapt to price swings.
• Designed to give guests a reason to pay more without resistance.

Here’s what needs to happen immediately:

Purge low-margin menu items…

• If it’s not making at least a 70% margin, it’s gone. No discussion.
• If it relies on highly tariffed imported goods, it’s gone. No discussion.
• If it’s just taking up menu space and barely selling, why the hell is it still there? IT IS GONE! NO DISCUSSION!!!

Shrink your menu & increase your pricing power — A 10-page menu is dead weight in this economy. Reduce the number of dishes and double down on execution, presentation and perceived value.

Make guests want to pay more. That means upselling through creativity — not by gouging them with lazy price hikes. A $19 Caesar salad with house-smoked croutons and hand-pulled mozzarella feels intentional — a $19 Caesar salad with bagged romaine and Sysco dressing feels like a ripoff.

2. Your Supply Chain Strategy Needs an Overhaul

If you think your current suppliers are going to protect you from rising costs, think again. Broadline distributors like Sysco and US Foods are not your friends. They exist to serve the biggest clients first. When things get tight, you will be at the bottom of the priority list — AND paying inflated prices for whatever is left over.

Here is how to get ahead of the supply chain mess:

• Diversify your supplier network NOW.
• Never rely on a single distributor for your key ingredients.
• Source locally and regionally as much as possible! Smaller suppliers can be more flexible and competitive.

Stockpile where you can. If you have freezer space, dry storage, or the ability to buy in bulk, now is the time. Prices are only going up — locking in lower rates today is a win.

Stop treating local and seasonal sourcing as a “trend” and start treating it as survival. If tomatoes, avocados, or citrus are getting too expensive to import, adjust your menu to reflect what’s available domestically.

Do what independent restaurants have been doing for years and let your menu evolve with availability.

3. The Labor Crunch Will Kill You if You Don’t Adapt

We’re heading into a reality where farm workers, food processors, and truck drivers are disappearing overnight.

And if you don’t think that’s going to impact how long it takes for your next shipment of meat, produce, or dairy to arrive, you’re kidding yourself.

But let’s talk about your own labor force…

• You’re already paying more to staff your kitchens.
• You’re struggling to retain good people because the industry is a revolving door.
• Now, you’re going to have to do more with fewer people.

Here is how to stay ahead of the labor crisis:

Cross-train your staff.

• Your servers should be able to run food and make basic drinks.
• Your cooks should know multiple stations.
• Your banquet staff should be able to jump into restaurant service when needed — and vice versa
• Eliminate time-wasting prep.
• Stop making overly labor-intensive dishes that require multiple hands in the kitchen.
• Batch-cook sauces, stocks and proteins to reduce back-of-house inefficiencies.

Use automation where you can.

Kitchen Display Systems (KDS), digital ordering, AI-driven inventory tracking — if you’re still running on outdated systems, you’re losing money.

4. Raising Prices Without Losing Guests

You’re going to have to raise prices — there is no avoiding it!

But if you think you can just slap a $5 increase on everything and call it a day, you are about to alienate your entire guest base.

How to raise prices the right way:

• Bundle high-margin items with perceived-value drivers.
• Instead of charging more for a steak, pair it with a premium sauce or signature side to make it feel like an upgrade.
• Use pricing psychology — If your entree prices are going up, make sure your appetizers, sides and cocktails offer great value. Guests will spend more if they feel like they’re winning in some way.

Tell the damn story!

A $25 burger is ridiculous unless you explain why it’s $25! Talk about local sourcing, sustainability and craftsmanship! Frame the price as a reflection of quality, not greed.

Final Word: Adapt or Get Left Behind

This industry is about to get a whole lot tougher.

The operators who refuse to change, who stick to outdated menus, who rely on corporate purchasing contracts to dictate their supply chains — those people are going to get crushed.

The operators who think fast, adapt and find ways to stay ahead of rising costs are going to be the ones who not only survive — but come out of this stronger.

So which side are you on?