Tariffs, Seafood, And The Restaurant Operator’s Dilemma

Fast Casual Chain Angry Crab Shack

By Permission Angry Crab Shack

The import policy now behaves like an operating variable in food service. When tariff schedules shift, containers divert, lead times extend, and the cost of goods becomes a moving target. In seafood, the ripple shows up first and hardest. The United States relies on imports for the majority of its seafood consumption, which means policy shocks are reflected quickly in distributor quotes and weekly inventory planning. Recent trade actions and the expiration of exclusions have kept effective rates in motion and pushed operators to rethink sourcing, menu pricing, and working capital.

Few brands sit closer to this reality than Angry Crab Shack. President and CFO Andy Diamond describes a market that can turn on a dime, not just between quarters. “Tariffs have caused logistical issues with trade flows being rerouted as countries form new partnerships,” he notes. “Lead times have increased, and during these transitions, certain countries can be left with an oversupply of product while others face shortages.” That mix of uncertainty and imbalance creates higher import costs, occasional product gaps, and a more volatile path to restaurant profitability.

From known volatility to systemic uncertainty

Seafood has always carried seasonal price risk. Snow crab, king crab, and live product are famous for swings. Shrimp historically offered stability because of year-round aquaculture. That stabilizer has wobbled. The tariff pause on several shrimp sources has ended in some places, negotiated rates have shifted by country, and new petitions have altered expectations for the upcoming buying window. Mexico faced rates near 30% during a recent window, while Vietnam settled near 20% after an earlier proposal in the mid forties. Movements like these reset distributor math and reset operator assumptions.

In the broader restaurant basket, food-at-home inflation cooled in 2024. Yet, wholesale and producer prices that matter to procurement teams remain elevated relative to pre-pandemic baselines. Restaurant operators continue to cite food cost pressure and limited room to raise prices without damaging demand. That ongoing squeeze is not only a seafood story. It is the daily mix of proteins, packaging, paper, and back of house supplies.

The portfolio approach to menu pricing

Many chains respond to rising costs by implementing blanket price increases for customers. Angry Crab Shack has taken a more surgical approach. “We do not automatically pass on price increases to our consumers,” Diamond explains. “We bid out purchases to multiple vendors, and look at changing pack sizes or portioning, even if that adds labor. We hunt for operational savings elsewhere to keep menu prices steady.” That discipline treats the menu like a portfolio. Items carry different roles. Some have a margin. Some carry traffic. Lunch value and happy hour guard the brand promise to working families. The math is not just what you charge. The math is how each item contributes to revenue consistency and guest trust.

“Because of our vendor relationships, we were able to purchase enough shrimp to give us a runway to plan for tariff-driven increases.” Forward buys cannot erase a policy change, but they turn a surprise into a plan. They also protect franchisees who benefit from network scale and negotiated programs that individual operators cannot access on their own.

Sourcing in a narrower lane

When tariffs move, the instinct is to hunt for new countries or replacement items. At scale, that answer is not always practical. “With an item like shrimp and the volume required, options are limited,” Diamond says. The team widened the bid list within the existing distribution, then selected three equal measures: price consistency, supply chain credibility, and product quality. Reliability beats the tempting low quote that collapses under pressure.

Quick service brands report the same tension. Operators who lean into value platforms worry that customer pricing elasticity is thin and that across-the-board increases hurt traffic. Trade press covering quick service describes a precarious position. Raise prices and risk alienating core guests, or absorb more costs and compress margins. The middle path is tighter engineering, more rigorous procurement, and selective menu-mix moves.

What the numbers say right now

The policy backdrop matters. Section 301 actions and their exclusion lists have been extended and adjusted several times, with seafood lines receiving short extensions followed by fresh reviews. Those shifts translate into real import costs for categories that appear on Angry Crab Shack menus and on many casual and quick service menus across the country.

Independent analysis points to several realities for seafood and food service

• United States seafood imports are significant in value, magnifying the impact of tariff changes on market prices and customer pricing. Recent global trade analysis warns that higher United States tariffs on seafood are expected to raise domestic prices due to limited near-term capacity to replace imports with domestic catch or aquaculture.
• Food-at-home prices rose by just over 1% in 2024, a cooler reading than the prior year. However, the overall environment still reflects elevated producer prices that cascade into distributor quotes and operator invoices.
• Industry groups continue to flag pressure on wholesale food prices and the resulting squeeze on restaurant bottom lines, even as headline inflation eases.
• In shrimp in particular, rate changes and country specific petitions have created a nonlinear landscape. Examples include proposed and negotiated rates in the mid to high teens, up to 30%, depending on the source and time frame, with measurable swings in import volumes during those windows.

Strategy for operators who must keep serving

Growth during volatility depends on fundamentals. Angry Crab Shack puts it simply through its vision statement, “Never be satisfied with what has already been achieved.” That posture shows up in planning, in vendor conversations, and in the guardrails placed around guest promises. The pipeline remains active in Texas, the Midwest, and the Southeast, and the company continues to evaluate opportunities abroad. A larger system provides more volume, and more volume provides better negotiating power. In a tariff sensitive world, that leverage reduces the odds of stock outs and helps stabilize cost of goods sold.

Tariffs will not decide a restaurant’s fate. Execution will. The brands that plan inventory with precision, prize reliability over short term deals, and protect value for the guest can absorb policy shocks without eroding trust. Angry Crab Shack offers a straightforward reminder that discipline is an advantage in a volatile supply chain. As Diamond puts it, “The job is to keep improving, keep serving, and keep earning the visit, no matter how the trade winds shift.”

Sources

• United States Trade Representative. Section 301 investigations and tariff actions.
• SeafoodSource. USTR extends certain Section 301 exclusions for seafood items for three months.
• United Nations Conference on Trade and Development via Reuters. Tariffs expected to drive up seafood prices in the United States. Reuters
• USDA Economic Research Service. Food Price Outlook summary findings. Economic Research Service
• S and P Global Commodity Insights. Shrimp supplier tariff landscape and recent country specific rates. S&P Global