How a Colorado restaurateur leaped into action when tariffs hit food prices

Business highlights

At the time, Hammer figured it would be better to order seven 30-pound boxes of tuna for $215 total than run the risk of prices increasing when the tariffs hit Vietnam, where he sources most of his seafood.

On Wednesday, Trump said he reached a trade agreement with the Southeast Asian country. U.S.-based companies will pay a 20% tariff on Vietnamese goods and a 40% tariff on goods routed through Vietnam from other countries.

Vietnam agreed not to charge any tariffs on U.S. goods.

The restaurant industry has been in financial limbo for much of this year as consumers scale back on dining out and business owners face the impacts of tariffs. In May, Fitch Ratings warned that the restaurant industry was facing “significant risks” and downgraded its outlook from neutral to deteriorating.

According to the Independent Restaurant Coalition, an industry trade group, smaller restaurants and food processors are facing “enormous pressure” from Trump’s tariff war with China in particular. Some cookware and takeout containers come from China, which leaves small businesses with the difficult question of whether to absorb increasing costs or pass it on to customers and risk losing their business.

Hammer is already feeling the crunch.

Tariff impacts

Since early April, the cost of tuna has only increased by a few bucks to about $220 per box, but Hammer said he is still keeping the fridge fully stocked to delay raising prices as long as possible.

Prices for other products, like disposable bowls from China, have already climbed 25%. Since March, the cost has increased from about $25 per box to $35 from his usual supplier, he said. And costs from the “emergency supplier” Hammer uses when his go-to is not available have shot up from around $45 to $67, he added.

Disposable gloves are also getting pricier. At Mauka Poke, where employees go through whole cases per day, prices have increased from $32 in January to $39 for his most recent order.

The price of avocados from Mexico, a mainstay at both restaurants, has doubled from about $45 to $50 per box to about $90 to $100, he said. That price has trickled down to customers, now costing them $2 per scoop, up from $1. It’s now cheaper to buy the popular topping from local markets than from wholesalers. Many local grocers now limit the number of avocados each customer can purchase, he said, because of high demand.

“Those signs are because of people like me,” Hammer joked, referring to the quantity restrictions. He said customers are beginning to “tighten their belts” and visit his restaurants less frequently.

They’re also ordering fewer extras like avocado and guacamole. Even mainstay are becoming more expensive. The price of ground beef has increased due to the rising costs of cow feed, Hammer’s suppliers have told him.

Looking ahead

In an attempt to keep things afloat during these uncertain times, Hammer, whose family owned a pub when he was growing up, has stopped taking a salary from the restaurants. Instead, he relies on his digital marketing business for income. He acquired Twisted Root just six months ago, while Joe Biden was president, and Mauka Poke about a year and a half ago, he said.

The seafood restaurant brings in about $350,000 a year with a 5% profit margin, but Twisted Root has a negative 10% profit margin despite its $450,000 yearly revenue. The staff is larger there and the rent higher, plus Twisted Root offers vegan alternatives that are more expensive than meat and dairy products, Hammer said. He tries to keep the menu prices reasonable for customers, which sometimes means taking on more cost.