Economy

Tariffs Could Force 60-Year-Old Kansas City Taco Sauce Company To Sacrifice Custom Touches

KCUR | By Lisa Rodriguez

Published October 22, 2018 at 5:41 AM CDT

Spanish Gardens, a Kansas City, Kansas-based taco sauce producer, may have to sacrifice its custom glass jars after tariffs on Chinese goods increased their costs.

For 60 years, Spanish Gardens has been making taco sauce in Kansas City, Kansas.

You can find the smooth, bright red sauce in grocery stores across the Midwest, in glass jars embossed with the company's logo.

But that custom touch may be gone a few months from now if Spanish Gardens switches from its glass jar producer in China to one in the United States.

Tariffs imposed on a host of Chinese products, including glass jars, have forced the company to look elsewhere for its containers.

Andrew Miller, president of Spanish Gardens, is the third generation to run his family's company. He says while he's facing tough decisions now, it's all a part of running a business.

“All of our products are in glass. It's a main component of what we do here. And keeping that price down is paramount to keeping the price down for the consumer,” says Spanish Gardens President Andrew Miller.

The first wave of tariffs, which went into effect in September, started at 10 percent. That duty is scheduled to rise to 25 percent on Jan. 1.

Miller says he increased his order before the new tariffs went into effect, but the shipment didn’t arrive until afterward.

This shipment of custom glass jars arrived from China before the duty hike went into effect. Miller says he ordered more before the new tariffs, but still had to pay the increase because they arrived in the states after the tariffs' effective date.

“So even though I ordered my glass before the tariffs hit ... if the tariffs were already implemented when it landed in America, I got hit with it,” Miller says.

Miller says the 10 percent tariff stung, but the looming hike to 25 percent will be a big blow.

So he has been sourcing jars from the Unites States and Mexico. And while he's happy to buy glass domestically, the change will come with an emotional cost — losing the “Spanish Gardens” logo embossed on the top of the jar.

Spanish Gardens owns the custom jar mold in China, but the cost of bringing the mold back to the states is prohibitive. Switching to a U.S. producer will mean switching to generic stock jars.

“I want to buy my glass here in the states and we did for a very, very, very long time, but like I said, the price increased here in the states and it was cheaper to go overseas, get it custom and have it shipped here,” Miller says.

The small Spanish Gardens taco sauce comes in a custom 11.5-oz glass jar, embossed with its logo.

He says he might end up saving money, but he still has some details to figure out.

“Now it's basically a wash, right? I mean it's probably a little cost savings on our end to buy it here. But again, it takes away that customization and it won't have Spanish Gardens on it. It’s not the ounces I exactly want.”

The small size comes in a custom 11.5-ounce jar rather than the standard 12 ounces. Changing the size would require a new bar code, new nutritional facts and new labels.

Miller says he hasn’t figured out the best solution yet.

Still, Miller, the third generation of his family to run Spanish Gardens, says the changes are all part of the game. And he says the 2018 tax legislation actually benefited his business.

“As far as business goes, I feel like it just goes in waves and for everything that hurts us, there's something else that comes along that helps us and vice versa,” Miller says.

Lisa Rodriguez is a reporter and the afternoon newscaster for KCUR 89.3. Follow her on Twitter @larodrig.