Dive Brief:
- Yeti aims to shift 80% of its global drinkware capacity away from China by the end of the year, according to its Feb. 13 earnings call.
- The target is 30% higher than its initial plan to move 50% of drinkware capacity outside of the country by the end of 2025, CEO Matt Reintjes outlined in a November earnings call.
- Yeti’s continued diversification efforts will help mitigate the impact of the additional 10% tariff on goods from China that took effect Feb. 4, which is expected to cost the company less than $10 million this year, CFO Mike McMullen said in the February call.
Dive Insight:
Yeti is focusing on diversifying its supply chains in the first half of 2025 and aims to have “a really exciting innovation roadmap” in the back half of the year, Reintjes told analysts this month.
“We feel great about the potential expansion in drinkware, the continued adoption of our new innovation in drinkware, both in the U.S., and then obviously, we expect continued outsized growth outside of the U.S. with [an] incredible runway in front of it,” he said.
McMullen added that Yeti’s supply chain diversification is driving the pace of its product roadmap, resulting in flat first-half results for drinkware. He credited the work of the company’s team — as well as its long-standing supplier relationships — for its ahead-of-schedule transition out of China, enabling a “robust lineup” and return to double-digit growth in the second half.
Yeti currently has three drinkware facilities in China, according to a map included in its Q1 presentation, down from eight food-and-beverage facilities in May 2024. It moved 20% of its global drinkware capacity out of the country in 2024 alone.
The company’s products also rely on its manufacturing networks in Mexico, Thailand, Vietnam, Malaysia, the Philippines, Taiwan and Poland, per its annual financial report.
The major supply chain transition doesn’t come without a cost, however. The company expects capital expenditures of $60 million to $70 million this year, investing in supply chain, new product innovation and technology, according to its Q1 earnings report.
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