The global food and beverage sector is entering a new phase of uncertainty as a result of rising costs, geopolitical disruption, changing diets and climate pressures, a big global food and agribusiness conference in University College Cork has been told.
A report, prepared by UCC researchers in conjunction with AIB, A & L Goodbody and KPMG that was released at the conference suggests that that while inflation has eased, underlying pressures remain intense with businesses facing higher costs and consumers continuing to feel the squeeze.
The conference was told 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 and 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.
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The report suggested that 91 per cent of food companies faced cost increases last year with 85 per cent saying they expected costs to rise again in 2026. Oil prices have risen by 60 per cent in 2026, driving production and transport costs higher, while fertiliser prices in Ireland are up 16 per cent year on year.
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.
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Up to 38 per cent of Irish consumers report feeling less financially secure than a year ago, while 54 per cent say they are buying fewer items to reduce costs.
Sixty-one per cent of consumers now prioritise price above all else, they say.
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 byproduct of cheese production, has become highly sought-after with prices increasing fivefold since 2023. Regulation is tightening across big markets, with new European Union 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.
The report was led by Prof Thia Hennessy of UCC and outlined the key factors shaping investment in the sector.
“What we are seeing is a shift in the operating environment for food and beverage companies, driven by geopolitical unrest, climate disruption and changing consumer demand, all of which are redefining where and how firms invest,” she said.
