Monster takes patient approach to aluminum tariffs

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Dive Brief:

• Monster Beverage is taking a wait-and-see approach to tariff mitigation, including price increases, noting that it would be “really premature” to discuss as “no one really knows what’s going to happen,” CEO Hilton Schlosberg said during a Feb. 27 earnings call.
• In the meantime, the CEO told analysts that Monster will continue to review international pricing, which will depend on the shifting trade landscape and strategies of competitors. 
• “But we have a very strong focus on trying to improve stockholder wealth, and that includes increasing pricing where there are opportunities to do so,” Schlosberg said. “However, we’re not going to disadvantage our brands by increasing prices unnecessarily.”

Dive Insight:

The last two presidential administrations have targeted aluminum imports with tariffs. In February, President Donald Trump ordered a 25% tariff on imports of the metal, effective March 12. The new actions build on duties set during his first term, which former President Joe Biden defended while in office.  

The new duties on aluminum could negatively impact the packaging sector, with more than 5 million tonnes of the metal imported into the U.S. in 2024, according to the International Trade Administration. 

Metal packaging manufacturing groups have raised red flags about Trump’s tariffs, saying that current U.S. metal production capacity cannot meet growing demand. The groups have also said that duties would push costs higher for packagers and consumers.

Monster is currently “hedged to quite a nice extent in 2025 with aluminum, and we have some hedges on the Midwest premium,” according to Schlosberg.

In 2022, Monster worked to navigate elevated freight costs by shifting its sourcing to the U.S., adding two aluminum can suppliers to its network that year. At the time, the company expected the additional suppliers would help reduce its use of imported cans. 

Other beverage companies have also assessed the potential impact of aluminum tariffs. 

Molson Coors Beverage Company, for instance, noted in a Q4 2024 earnings call that most of its aluminum used for U.S. consumption is currently sourced domestically. Further, the company imports “very little product” from Canada and Mexico, Gavin Hattersley, president and CEO, told analysts. 

Coca-Cola, however, said that it might adjust its packaging mix to combat rising costs, shifting from aluminum cans to more plastic.