Caterers need to pay close attention to developments in this area, to be prepared for the impacts that are likely to occur.”
European Union The list of high-value products caterers use that originate in Europe includes olive oil, condiments, cheeses, chocolate, wines, and spirits. Tariffs on these items, many of which have been drifting up in price already because of climate change (olive oil and chocolate in particular), may force some repricing of specific catering items to mitigate these additional costs. South Asia, South & Latin America, Oceania Tariffs on these regions have not been announced yet, but it seems likely that they will be soon. Each of these regions provides products used by most caterers—farmed shellfish and rice from South Asia, produce and coffee from South America, and various protein items from New Zealand and Australia. If all these tariffs are implemented, another likely impact will be reciprocal tariffs being put in place by the countries in the regions listed above. Caterers are generally not in the export business, but many corporate clients are. As such, the economic damage caused by this trade war could apply downward pressure to the post-COVID recovery in corporate event catering. Tariffs will also likely lead to a stronger dollar and higher U.S. interest rates. A strong dollar does have some minor benefits in purchasing power for imports, but not nearly enough to offset the inflationary impact of the tariffs.
A return to higher interest rates could be highly damaging to the catering industry. This is not so much because of direct borrowing by caterers, but because of secondary impacts such as a decline in housing and stock market values. This is sometimes referred to as the “wealth effect.” This is when households become richer because of rising asset values, such as corporate stock prices or home values, and they spend more and stimulate the broader economy. The opposite is also true— if mortgage rates go up and stock values go down, then spending on other items will likely scale back. Because catering is often considered a high-ticket luxury good, spending on catering could be one of the first items jettisoned during a downturn caused by higher interest rates. This was certainly the case during the Great Recession and the early days of COVID-19. Many social catering buyers will see the costs of such high budget impact items such as
mortgages and credit card interest go up. And corporate buyers will also likely see budget pressures increase when and if interest rates do begin to rise again. Tariffs are an extremely blunt economic tool and will likely cause damage to consumers and businesses on both sides of the transaction. Caterers need to pay close attention to developments in this area, to be prepared for the impacts that are likely to occur.
Carl Sacks has spent more than 17 years as a consultant to the catering industry, starting
at Catersource , and currently as the managing member of Certified Catering Consultants. His list of clients includes many of the most prominent and successful caterers in the industry.
CATERSOURCE ■ SPRING 2025
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