• 🤝 Smucker Divests Cloverhill, Big Texas
• 🚫 Gerber Recalls Teething Sticks 
• 🔀 Monday Moves 
• 🗞️ This Week’s Recommended Reads

As businesses entered the weekend, there was a strong sense of realization: it’s happening. Many Canadian and Mexican imports were going to be subjected to an extra 25% duty, while many from China were looking at an extra 10% – and that’s just for starters. 

The tariffs, on a wide variety of goods, including key agricultural products imported from Mexico and Canada, are effective as of Tuesday, Feb. 4; retaliatory tariffs are almost sure to follow.

A late-breaking commitment by Mexico President Claudia Sheinbaum to send Mexican troops to the border as an attempt to slow smuggling of the deadly opiate Fentanyl may have held off the trade offensive against Mexico for a month, but that only serves to underscore the uncertainty of the situation.

• Tariff costs are assumed by the buyers of the imported goods, not paid by the exporting country, often raising prices as they reach end consumers. 
• With a broad array of agricultural imports coming into the U.S. – tomatoes and avocados from Mexico, maple syrup from Canada, specialty ingredients and packaging materials from China – consumers can expect higher grocery prices.

Supply chain experts consulted by BevNET and Nosh advised against drastically altering operations, however, even in the face of potential price increases.

• Analyze supply chains for areas that are particularly vulnerable to tariffs, and explore where alternate sourcing might be available – but don’t switch unless you know an ingredient will work, notes Brandon Hernandez of Whole Brain Consulting.
• Most price increases are going to be shared across the entire industry, not specific companies, notes Jeff Grogg of JPG Consulting.
• Talk to your suppliers about worst-case scenarios, said Cody Berenson, SVP of operations and services at Siddhi Capital, and if your working capital can bear it, carry slightly heavier inventory as a hedge.

“Suppliers have different ways to have goods get into the U.S.,” Berenson said. “Don’t act out of fear. Nobody in the world knows where this is going to land.”

Nosh Insiders can access the full story to understand what reactions the experts recommend.

The J.M. Smucker Company continues to shake up its portfolio, announcing an agreement to divest the Cloverhill and Big Texas brands, as well as certain private label products, to JTM Foods in a deal valued at approximately $40 million. 

• The news comes 15 months after Smucker acquired the value-positioned brands in its $5.6 million purchase of Hostess. 

🏭 The transaction includes trademarks and licenses, a manufacturing facility in Chicago, Ill., and about 400 employees who will transition with the business.

👀 Smucker has continued to cull its brand portfolio over the past few years, most recently divesting Sahale Snacks and Voortman Bakery. According to Smucker SVP of Sweet Baked Snacks Dan O’Leary, this latest divestment aligns with the company’s “portfolio optimization” efforts and reaffirms its focus on Hostess. 

⏩ J.M. Smucker expects FY 2025 net sales from the divested value brands and private label products to be roughly $60 million. 

Stay tuned for the full story later today. 

Gerber Products Company on Friday issued a recall and discontinuation of all batches of Gerber Soothe N Chew Teething sticks due to a potential choking hazard for babies. 

• The product has been linked to at least one emergency room visit, the company reported. 
• The recall and discontinuation include Gerber Soothe and Chew Teething Sticks Strawberry Apple and Gerber Soothe and Chew Teething Sticks Banana. Gerber is working with the U.S. Food and Drug Administration (FDA) on the recall. 

Here’s a taste of the people and products moving around the industry to start off your week.

🍫 Alt-cocoa producer Win-Win has a new CEO, naming Mark Golder to the post as co-founder Arhum Pak shifts from the chief executive spot to chief strategy officer. 

💪 The Simply Good Food Company released its CFO succession plan that will see SVP of Finance Christopher Bealer take over the role following Shaun Mara’s retirement on July 3. Bealer brings nearly 23 years of CPG industry financial experience. 

🧀 Washington, D.C.-based mac and cheese brand Myles Comfort Foods has locked in Gelson’s as its latest retail account.

🍜 Regenerative rice producer Lotus Foods announced that Walmart has taken on its Organic Brown Udon Rice Noodles at over 1,100 stores nationwide where an 8 oz. pack will sell for $3.82. The products are also now available on Walmart.com

Trump's tariff-induced trade war is sure to dominate headlines this week. Get up to date on the state of play with our editorial team’s reading list: 

😵‍💫 The Wall Street Journal’s editorial board shares why they believe Trump’s move to slap Mexico and Canada with a 25% border tax, and posited a 10% tariff on China, has kicked off The Dumbest Trade War In History. 

🌐 Global markets tumbled this morning with the threat of Trump’s trade war already taking effect. Read up on Reuters to get a temp check on the state of the stock markets, the dollar’s surge and the price impact added tariffs are expected to initiate.   

😡 An opinion piece in The Atlantic explains how the real cost of Trump’s tariffs means alienating critical allies and partners and paving the way for “future difficulties and … future disasters.”