HANOVER, PA. — Utz Brands Inc. said recent tariffs will likely not affect the company and the cost of manufacturing its snacks, but it is monitoring for any developments that could impact the price and availability of ingredients and materials from its suppliers.   

Speaking at the Bank of America Consumer and Retail Conference in Miami Beach, Fla., on March 11, Ajay Kataria, executive vice president and chief financial officer, Utz Brands, said, “Substantially, all of our finished goods sales and our raw material procurement is within the US. We do very limited (business) across the border, so limited direct exposure on tariffs, pluses and minuses, what have you, for the company. That said, we buy some plastic racks and a few other items from across the borders, so we’ll see what that means. It’s not material. There might be indirect impact if our suppliers are impacted for whatever reason, and they’re passing along costs. We just don’t have a way to quantify that right now.”

Howard Friedman, chief executive officer of Utz Brands, added, “We have a team in place to make sure we’re responsive to the external environment. And if we need to be, we’ll continue to be flexible and can respond as quickly as you would think a company our size, with our level of complexity, can respond.”

On Wednesday, President Trump imposed 25% tariffs on steel and aluminum imports into the US, the latest in a series of tariffs and threats of tariffs to neighboring countries and global trading partners. Retaliatory tariffs by Canada, Mexico and China on US agricultural imports and other goods are expected to impact producers in the US. 

Convenience channel challenges    

Utz makes salty snacks under a variety of brands, including its “power four” brands of Boulder Canyon, Utz, Zapp’s and On the Border. The company sells across multiple retail channels, but ongoing headwinds from soft convenience traffic remains a challenge for the company in 2025.

Boulder Canyon’s popularity has risen with the scrutiny of seed oils, according to the company.

| Photo: ©STEHEAP – STOCK.ADOBE.COM

“If you look at the (salty snack) category by each of the channels, grocery (sales) – call it down about 1.6% – mass is down about 1.3%. Club is relatively flat. And then c-store is down 3%,” Friedman said. “About 15% of our business comes out of c-store. And it’s particularly indexed to our Zapp’s business first, but we’re fairly represented. So, c-store has been a little bit of a challenge for us for multiple quarters now. It started as a price pack architecture issue and continues to be something that we’re just not getting corrected as quickly as we would like to.” 

Friedman noted that Utz anticipates the convenience channel to start to normalize in 2025, with flat to low growth on the year. As far as the Zapp’s brand and c-store sales are concerned, Friedman added, “Zapp’s has been the business that probably is the most challenging for us. We talked a little bit about c-store (impacts) earlier, but on the bright side, it’s really a potato chip opportunity, because if you look at our pretzel business, it’s performing quite strongly. So, we continue to have a great confidence in (Zapp’s) going forward, once we resolve the c-store opportunity.”

Health trends

Perhaps Utz’s biggest recent success story has been its Boulder Canyon potato chip brand, which recently became a $100 million brand. The rise of Boulder Canyon also coincides with increased consumer scrutiny of seed oils, reinforced by US Department of Health and Human Services Secretary Robert F. Kennedy Jr., and the make America healthy again campaign. Boulder Canyon chips are not fried in seed oil, but in olive oil. 

“There is a subsection of consumers who are focused on avoiding seed oils, and what’s nice about the Boulder products is there’s no taste tradeoff,” Friedman said. “So, as people are opting into these segments, we believe there is a tremendous amount of runway for this business over the next couple of years, and we’re excited about making sure we’re leaning into that trend.”

Addressing the wider trends of clean labels and GLP-1 weight loss drugs, Friedman added, “I think lots of folks have talked about GLP-1. We don’t see it necessarily in our data at this point. Propensity for smaller pack sizes, perhaps,” he said. “Seed oil is an opportunity for us, but I think the question will be, what does the consumer behavior change into, and how do we best meet and deliver against that behavior change? Our portfolio is pretty simple. We always are looking at innovation and ways to bring new products to market.”

Utz Brands is forecasting low single-digit organic net sales growth for 2025. The company’s 2024 net income was $31 million, equal to 19¢ per share on the common stock, which compared with a loss of $40 million the year prior. Net sales were $1.41 billion, down from $1.44 billion in 2023. Utz’s annual shareholders meeting is scheduled for April 25.