April 30, 2025
To our valued customers:
At Parker Flavors, we understand recent changes in tariffs are raising concerns about product costs. While these tariffs affect the broader food and beverage industry, we are committed to maintaining our current pricing structure for the time being.
Having said that, tariffs are a tax on trade. Therefore, we can expect less trade and more inflation throughout the economy: higher costs on raw materials from abroad ultimately lead to higher prices. As many of us learned during the pandemic, our country is particularly dependent on China for electronics, pharmaceuticals and toys, but also for many ingredients used to manufacture flavors.
Because Parker Flavors stocks ample raw materials and contracts long on most bulk materials, we remain well positioned, at least through year-end. However, to address the 145% tariff on most Chinese goods, our Chinese suppliers have begun raising prices 20-35% across-the-board for the next 60 days. And that’s obviously just the beginning, with larger increases expected ahead, absent a significant breakthrough to end this trade war.
We are also awaiting the status of the Administration’s reciprocal tariffs, currently paused until July, on countries such as Ghana, Ivory Coast, Madagascar and Vietnam, to name several of the places we depend for aroma chemicals, cocoa, essential oils and vanilla. Glycerin, GMO-free dextrose and MCT-based flavors are more acutely vulnerable to these tariffs if bilateral deals are not reached because, as carriers, they make up a larger percentage of our finished product. You may want to consider an alternative carrier (domestic ethyl alcohol and dextrose) and/or a more concentrated flavor. Please contact your sales representative to explore options.
The Administration’s universal 10% tariff has already gone into effect with the aim to raise revenue to the Treasury on all imported goods.
Finally, tariffs are also delaying the receipt of raw materials, with less cargo and containers in the pipeline. To avoid potential shipping delays on your end, we are prepared to dedicate inventory to facilitate smoother, speedier shipments, particularly for flavors that fall outside an established, monthly purchasing pattern. Again, please contact your sales representative to arrange.
Notwithstanding all of these storm clouds, our aim here is not to raise prices, but to hold them constant for as long as possible. We hope bilateral negotiations ultimately bear fruit. Our priority remains providing you high-quality flavors shipped promptly at competitive prices. Please do not hesitate to contact us if you have further questions or need additional information.
All the best,
Tim Parker
CEO