Approximately 91% of food businesses reported an increase in the cost of doing business during 2025, with 85% expecting further increases in 2026, according to a new report.

The findings of the report show that while inflation has eased, underlying pressures mean the global food and beverage sector is "entering a new phase of uncertainty". 

The report, prepared by University College Cork (UCC), AIB, Goodbody, KPMG and A&L Goodbody, was unveiled on Wednesday, June 17 at a global food and agribusiness conference at UCC, which brought more than 400 delegates from nearly 40 countries to Cork.

The report, titled 'Building Global Food and Beverage Companies: Key Trends Shaping the Sector in 2026', is led by Prof. Thia Hennessy of UCC.

She said: “What we are seeing is a shift in the operating environment for food and beverage companies, driven by geo-political unrest, climate disruption and changing consumer demand, all of which are redefining where and how firms invest.” 

The key findings include:  

91% of food companies faced cost increases last year;
85% expect costs to rise again in 2026;
54% of consumers are buying fewer groceries;
61% of consumers now prioritise price above all else;
Oil prices have risen by 60% in 2026, driving production and transport costs;
Fertiliser prices in Ireland are up 16% year-on-year;
Protein ingredient prices have surged, with whey increasing fivefold since 2023.

The conference heard that renewed conflict in the Middle East, together with a rise in extreme weather events, is increasing uncertainty across global food and beverage markets and adding to inflationary pressures.

Recent increases in energy, fertiliser and supply chain costs are already contributing to elevated production costs.  

Even if the ceasefire in the Middle East is sustained, the cost pressures already absorbed by food businesses are likely to pass through to consumer food prices in the months ahead, it was reported.

Consumers

New data from KPMG shows consumers remain highly value-conscious after several years of food inflation, driving stronger demand for private-label products, promotions and value ranges.

Up to 38% of Irish consumers report feeling less financially secure than a year ago, while 54% say they are buying fewer items to reduce costs. A key emerging trend is the rising use of GLP-1 medications, which is reshaping consumption by reducing appetite and increasing demand for nutrient-dense foods.

This is reinforcing health and wellness trends, with particularly strong growth for protein-fortified products.

As a result, whey, which was once considered a low-value by-product of cheese production, has become highly sought-after with prices increasing fivefold since 2023.   Regulation is tightening across major markets, with new EU rules on packaging waste, deforestation and emissions increasing compliance complexity for food companies.

In the US, the 'Make America Healthy Again' agenda is intensifying scrutiny of ultra-processed foods, with direct implications for product formulation, labelling and marketing. These challenges are evident in equity markets, according to the report.

It noted that the STOXX 600 Food & Beverage Index, which tracks Europe’s largest food and beverage companies, is trading below its long-term average.

After rising nearly 10% earlier this year, those gains have since been reversed and the index is now down 2% year-to-date.