Four years after launching, Carbone Fine Food — a CPG company associated with the famous New York City restaurant — is grappling with an increasingly complicated supply chain. Thanks to tariffs on imports from the European Union, Carbone could face additional long-term costs on what it calls its “most important ingredient” for its line of pasta sauces: tomatoes imported from the San Marzano region of Italy.

For Carbone, 2025 was expected to be a major year, with the company growing at a 100% year-over-year rate. In 2024, the company sold a record 9 million jars, for a total of over 18 million jars sold to date. Last year, Carbone expanded into Walmart and Costco, and it now has nationwide availability in over 24,000 doors. Carbone planned to build on that momentum this year with new product releases and added retail doors.

But now, ongoing tariff negotiations have thrown a wrench in the company’s supply chain planning. At the end of July, the European Union and the United States came to a temporary agreement that would put a 15% tariff on most imports from the E.U. — including the famed San Marzano tomatoes.

CEO Eric Skae has been sounding the alarm on these tariffs in recent weeks on LinkedIn, wondering, “Are my Italian whole peeled tomatoes bad actors?” As Skae and Carbone describe it, the company chose this particular type of tomato for its sauces because it is the best-tasting, and other types of tomatoes don’t have exactly the same qualities. But now, tariffs have forced the company to make hard decisions on sourcing raw materials while keeping margins healthy.

Carbone makes its sauces in U.S. facilities but imports several ingredients from overseas, largely from Europe. The jarred sauce line, an offshoot of the popular Carbone restaurants, launched in 2021 as a way to bring the famed brand into the grocery aisle. Carbone is also growing its offerings quickly, making supply chain challenges more pronounced. The brand added five new SKUs earlier this year. The expansion includes two new red sauces, Sweet Pepper & Onion and Mediterranean Marinara, both of which use 100% Italian tomatoes.  

The San Marzano tomato variety originated from the Italian region of Campania. San Marzano is known for its plumness, sweet flavor and low seed count, which makes it ideal for canning. Various businesses have already reported rising costs on the imported canned tomatoes, even at just the 10% tariff rate that most imported goods were subject to in the months following the ‘Liberation Day’ announcement. Small businesses such as pizzerias and restaurants say they’re already taking a hit, having to absorb the higher cost of ingredients like Parmaggiano Reggiano, Parma Prosciutto, and canned San Marzano tomatoes.

Carbone’s jarred sauces retail for about $8.99. This puts it at a higher price point than national brands, but still accessible enough for home cooks looking for premium ready-made sauces. With uncertainties around where exactly tariffs will be six months or even a year from now, the company says it will become increasingly difficult to compete and keep prices the same.

Currently, Carbone is waiting to decide whether to increase on-shelf prices, based on how the eventual tariff rates shake out. But Skae told Modern Retail that the company doesn’t want to compromise on taste and quality by swapping out the San Marzano tomatoes used for the base of the sauce.

The company imports 100% Italian tomatoes grown in the volcanic soil beneath Mt. Vesuvius in Campania. “They’re hand-picked and packed into stainless steel cans,” Skae said, with each can containing 29 to 31 tomatoes. “Each can is lined with fresh, hand-stripped basil, and they’re shipped to our co-manufacturing location here in the U.S.,” he added. 

The tomatoes are then open-kettle cooked in small batches, similar to the way it’s done at Carbone restaurants. Additional ingredients, including fresh onions, olive oil, fresh basil, oregano, fresh garlic and sea salt are added throughout the process. 

“During our rigorous product development phase, we tasted countless tomatoes from countless locations, including U.S. locations,” Skae said. Eventually, Carbone found the Vesuvian tomatoes to be the best option. “They’re naturally sweeter and meatier, and have fewer seeds than the other tomatoes we tested. None made our sauce taste as thick, rich and delicious,”  he said.

While the origin of canned tomatoes may seem trivial at first glance, Skae said Carbone has built a customer base that expects an authentic Italian product and pays the premium that comes with that label. “They assume our jarred sauces are going to meet the same high taste standards of legendary Carbone restaurants,” Skae said.  

Skae said that Carbone has some advantages that have helped the company navigate fluctuating tariff rates in recent months, like having multiple suppliers and domestic production in place. However, the distracting tariff conversation is causing uncertainty. 

“Just like everybody else, the biggest issue I have right now is figuring out what the effect of tariffs will be,” Skae said. “It’s unfortunate and unnecessary, but that’s where we are.”

Carbone’s predicament highlights the plight that many specialty food businesses face right now. If they rely on specific imported ingredients, it can be difficult to find an alternative in the U.S. at the same price and scale.

Kantha Shelke is a trendspotter who also teaches in the Specialty Food Association education series. Shelke said that premium food brands have to often weigh the value of using imported specialty ingredients while making the margins work. 

Taking the example of the San Marzano tomato, Shelke said that although stand-in versions are now available in California, it’s nearly impossible to replicate the exact taste and texture due to the local terrain. It would be difficult for American suppliers to compete with the existing infrastructure that Italian canning operations have in place. 

“It also has to do with the amount of care and the approach that the [Italian] suppliers take to produce these ingredients, versus a fast and cheap process,” Shelke explained.

One way a business can future-proof its supply chain, Shelke said, is to secure close relationships with their suppliers. This helps with planning and potentially locking in long-term rates, to make costs predictable in the coming years.

As the European tariff negotiations continue, Carbone Fine Food will evaluate whether to increase prices or absorb costs indefinitely. In the meantime, the company is looking at all areas of its business for potential savings, including finding secondary ingredients to source from within the U.S.

“But tomatoes and olive oil are the two non-negotiables,” Skae said. That’s not only because of the flavor profile, but also because it’s difficult to purchase U.S.-made olive oil at the scale big food companies need. “There is just not enough of it to cover demand,” he said.

“If I could find tomatoes out of California that match the sweetness and the taste and the quality of what we get in Southern Italy, I’d do it,” he said.