Odd Burger’s Plan to Thwart Trump Tariffs Amid US Expansion? Go Local

Canadian plant-based restaurant chain Odd Burger has detailed its US expansion strategy to tackle the impact of the ongoing trade war between the neighbours.

As America’s trade war with the world continues, one burger chain is opting for a shrewd strategy to expand its US business and avoid the financial impact of tariffs.

Ontario-based Odd Burger, a vegan fast-food company listed on the Toronto Stock Exchange, is set to open the first of 20 franchised locations in Washington state this year, with another 40 planned for Florida in the future.

To mitigate the financial blowback that comes with President Donald Trump’s 25% tariffs on Canadian imports, the firm is looking to replicate its localised supply model for the expansion, sourcing American ingredients and building a facility within the US.

“Our experience in Canada has shown that a vertically integrated, localised supply chain is key to controlling costs and maintaining high-quality food production,” said Odd Burger co-founder and CEO James McInnes.

To support the expansion, the company has secured a $2M non-brokered private placement, which itself comes two weeks after it announced a 6% quarterly revenue growth in Q4 2024, with losses cut by 80%.

Odd Burger to leverage US farmers and manufacturing

The vertically integrated supply chain McInnes referred to was established via Odd Burger’s manufacturing division, Preposterous Foods. Through this company, it manufactures its own plant-based meat and dairy products at its facility in London, Ontario, which primarily uses Canadian-grown ingredients.

That approach has allowed the company to minimise external supply chain disruptions, maintain product quality, and reduce costs amid challenging market conditions. These products are distributed to its restaurant locations as well as grocery stores under its CPG line.

The company operates a franchise model and currently has 20 locations in Canada. It has long-held international ambitions – apart from the 60 planned franchise stores in the US, it has deals in place to expand into India (with 145 sites), Singapore (five locations), and Germany, Austria and Switzerland (25).

The US, though, will be the first country outside Canada to host an Odd Burger restaurant. But as the companies remain locked in an escalating trade war, the business is bringing that vertical supply chain model stateside.

Odd Burger will source ingredients from US farmers and build its own manufacturing plant in the country. This would ensure that the food it offers is locally produced, and help the firm maintain control over its supply chain.

“We are confident that by implementing this strategy in the US, we can expand quickly while keeping prices stable and offering the same level of excellence that our customers expect,” said McInnes.

How Trump’s tariffs on Canada are creating uncertainty

Tariffs, one of Trump’s major campaign promises, are creating chaos in the global economy. The president’s latest announcement has seen a 25% tax slapped on steel and aluminium imports from the world over.

Most Canadian goods coming into the US also face a 25% levy, and Canada has retaliated with reciprocal tariffs on over $30B worth of goods. While there’s an exemption in place for products under the free trade agreement, that only lasts until April 2 for now.

The US is Canada’s largest export market, taking up over 77% of the share, so any tariffs would hit both countries’ economies hard. They may not directly impact the price tag of a packaged food product – but they will raise the cost of imported raw materials and equipment for domestic manufacturers, which in turn would lead to higher on-shelf markups.

Odd Burger’s Canadian facility produces foods like oats, chickpeas, and wheat. These are ingredients that the US relies on Canada for its imported supply – for example, 92% of oats in the US come from other countries, and mostly from Canada.

So for Odd Burger – which plans to bring its retail products like breakfast sausages and burgers to the US as well – manufacturing ingredients locally is a smart move. That said, greater taxes on potash and fertilisers (already imported in large quantities from Canada) will make it more expensive for American farmers to grow crops.

The company’s expansion efforts and facility construction will be supported with the $2M private placement, a sign of investors’ confidence in the business. While Odd Burger’s revenues shrunk slightly by 3.8% in 2024, its net loss plunged by 41%.

“Our focus for the past year has been on building a national chain and expanding our footprint,” McInnes said after publishing the company’s Q4 earnings. “As we move forward, our focus is on growing our revenue and continuing to build and deploy the technology that will truly differentiate us from anyone else in our industry.”