Restaurant Case: Ocean Delight and Shrimp Tariffs

Ocean Delight, a seafood restaurant in New York, imports shrimp from India. Like most modern organizations, 50–70% of its total expenditure goes to external suppliers (shrimp, vegetables, beverages, cleaning supplies).

• Shrimp is a core menu item: scampi, tacos, cocktails.

• Heavy reliance on one supplier country (India) makes the restaurant vulnerable to tariffs.

2. Tariff Shock

• Pre-tariff cost: $5 per pound → $6,000 monthly for 1,200 lbs.

• Post-tariff cost (58% increase): $7.90 per pound → $9,480 monthly.

• Impact: $3,480 extra per month, or $41,760 annually.

3. Financial Lever Effect

Here’s the strategic insight:

• A 1% reduction in COGS (through supplier negotiation, waste reduction, or diversification) can improve EBITDA by 15–20%.

• For Ocean Delight, finding a supplier who offers shrimp at $7.50 instead of $7.90 saves $480 per month. That small procurement win has a larger impact on profitability than selling a few hundred extra meals.