How alcohol brands can navigate tariff turmoil and come out stronger

As the US continues to revamp tariffs on imported products, it's tempting for drinks brands to sit back and wait to see how the situation evolves. That would be a mistake.

The biggest mistake any brand can make right now is to freeze and not make the decisions required for long-term health. Instead, use this pause to plan: localizing supply chains, strengthening distributor relationships, and building the resilience needed to navigate whatever changes lie ahead.

Be agile

The current situation, with changes announced by the US government almost daily, is genuinely challenging. But it is important to remember that this is affecting every business, not just drinks brands.

Brand owners that are agile and adaptable, and able to make decisions that enable their brands to move forward, are the ones that will ultimately succeed. If COVID taught us anything, it was that companies embodying these characteristics came out stronger.

Agility will depend on the size and structure of your business, but it could mean a number of things: localizing your supply chain and production to minimize import fees; building contingencies into your long-term pricing strategy; strengthening your relationships with key distributors to maintain local market agility; planning ahead on packaging and componentry stock to allow for delays and pricing uncertainty; continuing long-term plans for brand development; and strengthening your digital infrastructure to enable improved modeling and tracking of ongoing disruptions.

Learn to adapt

There are two priorities for brands adapting to high tariff markets. The first is to think creatively: look for new markets or sourcing opportunities. The second is to ensure that the brand's core identity remains intact throughout any changes.

If the liquid is not dependent on sourcing from its original country of origin, then locally-sourced liquid could be a good alternative. Obviously, some categories cannot do this: Bourbon, Tennessee Whiskey, Cognac, Scotch, and Irish whisky are defined by their origin. But brand owners in other categories should think carefully about how important origin is to their story.

Guinness is intrinsically Irish, with its iconic home at the St. James's Gate Brewery in Dublin, yet the brand also brews in several countries around the world to supply local markets more efficiently, without damaging its identification as proudly Irish.

It is a controversial thought, but could Johnnie Walker become a Blended American Whiskey, or at least have a range of American Whiskey under the Johnnie Walker brand? "Keep Walking" could take on an entirely new direction.

Brand relevance is emotional, even when tariffs are economic

Brands can use storytelling to justify a price premium with absolute clarity on their value in drinkers' lives. Tell the product story. Educate your audience on craftsmanship, quality control, and provenance. Lean into your origin's appeal, "Crafted in the Scottish Highlands," while tying it to American values like authenticity, quality, and sustainability. For brands selling in the US, doubling down on cultural collaborations with US-based artists, influencers, or local venues creates genuine connection.

This thinking goes beyond product and celebrates brand experience. At a time when travel, self-expression, and self-fulfillment are still seen as worthy investments, creating brand worlds that promise immersive, evocative, and inspiring experiences will help secure a brand's value and justify any pricing increases needed to weather higher tariffs.

Brands can also introduce tiered product lines: keeping the hero SKU accessible while creating premium ranges that absorb higher costs of goods but deliver higher margin.

Case study: how Penfolds navigated the China tariffs

One of the reasons Penfolds, and its parent company Treasury Wine Estates, not only survived but thrived during the China tariffs period of 2021 to 2024 was its ability to pivot to new markets quickly.

The brand gained distribution in new markets, particularly throughout Central and South East Asia, which it then retained once China re-entered the market. Penfolds considered carefully the cultural nuances of the new markets it targeted, and adapted its communications, product mix, and gifting to appeal to new consumer bases.

Penfolds also continued its localization strategy that had started in 2021 with the introduction of the Penfolds California Collection for the US market. In 2022, Penfolds introduced its first China-made wine in China under the One by Penfolds tier. Then in 2023, it launched its first wine in the Chinese Release: CWT 521 Cabernet Sauvignon Marselan. Within the traditional Penfolds label design structure, our design team incorporated a Chinese luck knot: a respectful nod to the new country of origin of the liquid, and a signal of this localization intent.

Honesty is the best policy

As consumers interrogate the brands they invest in, trust is increasingly hard-earned. Being open and upfront with suppliers, customers, and consumers on the measures you're taking to navigate turbulence will strengthen trust. At the same time, working to highlight any existing weaknesses in your current model will create opportunities for greater efficiencies.

The brands that come out of this period stronger will be the ones that treated disruption as a brief, not a barrier.

Rowena Curlewis, Denomination's CEO, spoke about how alcohol brands can navigate tariff turmoil in Beverage Daily, July 2025.