Tariffs, Profitability, and Smart Expansion for Breweries

As breweries power through 2025, managing costs will remain a top priority—and not just because of taxes. Rising tariffs are adding another layer of complexity to already tight margins. While they’re not new, recent shifts in trade policies have made them harder to predict and plan around. Global supply chains mean that even the most locally minded operators can feel the impact of international pricing pressures. So how do you stay ahead? 

Below, we’ll outline a few practical strategies to help offset cost increases, diversify revenue, and preserve cash flow—particularly if you're weighing equipment upgrades or expanding into food service. (We’ll start with high level considerations around taxes and then share a breakdown of current tariffs at the end of the article.)

It’s important to note: this article is for informational purposes only and should not be considered tax or legal advice.

Bonus Depreciation: Act Now to Maximize Tax Savings

If you’re thinking about purchasing new brewing or kitchen equipment, now’s the time to consider bonus depreciation. This tax incentive allows you to write off 40% of qualified equipment costs in the year it’s placed in service—up from the typical 20% under standard depreciation rules.

Originally part of the 2018 Tax Cuts and Jobs Act, this benefit is currently set to expire after 2025 unless extended. There is ongoing legislative discussion that could reinstate or enhance it, but for now, timing your CapEx purchases is key.

Use bonus depreciation to lower your taxable income, improve operational efficiency, and drive cash flow while you wait to see how tariffs and pricing fluctuations shake out.

Section 179: A Powerful Alternative to Bonus Depreciation

Another valuable tool in your tax planning arsenal is Section 179, which allows you to fully expense qualifying capital investments in the year they’re purchased and placed in use.

Qualifying items may include:

• Kettles, fermenters, and fryers
• Brewery Point of Sale System
• Non-structural improvements like HVAC, roofs, or fire alarms
  
  

While Section 179 offers a greater upfront deduction, it does come with limits based on business income and total asset purchases, so you should consult your tax preparer to see which route offers the most benefit.

Importantly, all equipment and improvements must be operational by December 31st to qualify, so there's still plenty of time to plan and act.

In some cases, you can combine Section 179 with bonus depreciation to further reduce your tax burden.

Considering a Food Truck? Take Advantage of IRS Section 195

If you want to expand into food but aren’t ready for a full kitchen build-out, a food truck can be a smart, flexible option. Even better, it opens the door to valuable tax incentives under IRS Section 195.

Section 195 of the IRS tax code allows breweries—and other new businesses—to deduct certain startup expenses incurred before opening. Under this rule, you can immediately deduct up to $5,000 in startup costs and $5,000 in organizational costs, as long as total startup spending is under $50,000. Any remaining costs can be amortized over 15 years, providing continued tax benefits. For brewers launching a food truck or satellite taproom, Section 195 is a powerful tool to recover early investments and ease into profitability.

Qualifying startup expenses include:

• Legal and accounting fees
• Market research
• Branding and advertising
• Website development
• Pre-opening lease/rent payments

When using Section 195 remember the business must be operational before these deductions can be taken—so plan accordingly. This route not only creates a new revenue stream insulated from tariff impacts, but also provides a strong tax planning opportunity. Be sure to review the details with your accountant.

Understanding Price Sensitivity with GoTab Data

One way to manage profitability under inflationary or tariff-driven pressure is by analyzing how price-sensitive your customers are and where you can gain revenue. With GoTab Data, you can measure the impact of price changes on sales volume using a simple formula:

Price Elasticity = (% Change in Quantity Sold) ÷ (% Change in Price)

Example:

• If you reduce your IPA price by 5% and see a 10% increase in volume sold, your elasticity is 2.0. That means demand is very responsive to price changes.
• If a 5% price increase causes sales to drop by 10%, elasticity is -2.0—indicating that customers are highly price-sensitive.

Use this insight to:

• Test bundling or combo offers
• Adjust recipes for better margin
• Revisit glassware sizing
• Improve brewhouse efficiency

The goal is to make data-backed decisions, not just gut calls. GoTab gives you the tools to do exactly that.

Tariff Watch: Don’t Get Caught Off Guard

If you're planning to buy new equipment, look for American-made or used options to help avoid surprise tariff charges. If importing is necessary, always get written confirmation from your vendor about who is responsible for any tariffs—you don't want to assume you're protected and then get hit with unexpected costs.

Tariff rules can be confusing and are still evolving in many areas, so it’s important to understand the true cost of what you're purchasing. While federal policy is out of your hands, you can control how you invest and where you source your materials to keep your margins stable.

What About Tariffs on Brite Cans?

This gets a little technical, so let’s break it down with a few common scenarios:

• If you’re importing brite cans from Canada, you’ll likely face a 25% tariff.
• If you're buying from a U.S. supplier using recycled aluminum, you might avoid price increases altogether.
• If your U.S. supplier imports aluminum rolls, you could still see a smaller price increase—but probably not the full 25%.

For example: If a supplier imported a 10,000-pound roll of aluminum, it used to cost about $13,000. With a 25% tariff, that jumps to $16,250. Since that roll can produce around 300,000 cans, the cost increase per brite can would be about $0.01—as long as the supplier doesn't adjust prices further. Not ideal, but far better than paying 25% more per can.

How the GoTab Brewery POS Helps You Stay Profitable

In an industry where margins are tight and costs can change overnight, the right brewery POS system isn’t just a convenience—it’s a strategic asset. GoTab’s brewery POS platform gives operators the tools they need to stay agile and profitable, even as tariffs, ingredient prices, and operational expenses fluctuate, including: 

• Real-time reporting to monitor ingredient cost shifts
• Automated pricing tools to respond to tariffs
• Integrated tax reporting for CapEx decisions
• Support for food service expansion via mobile ordering, kiosks, and food truck integration

From real-time cost monitoring to its advanced pricing rules engine pricing and seamless support for food service expansion, GoTab helps you make smarter, faster decisions that protect your bottom line

Know Your Business, Inside and Out

Whether it's through tax strategy, pricing analytics, or equipment upgrades, success in today's environment requires flexibility and financial awareness. You don’t need to control the market—you just need to know your numbers and stay nimble.

As long as you serve a great product and create a welcoming environment, you'll come out ahead—even if the landscape keeps shifting.

The purpose of this article is not tax advice, just an overall scope of what is available.  Remember to consult your tax advisor on your specific case.

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