Food and beverage industry - challenges and opportunities
- Industry faces accelerating change driven by innovation, costs, labour and technology
- Rising operating costs are reshaping investment priorities and long‑term planning
- Workforce shortages are increasing pressure on manufacturing productivity and resilience
- Rapid technological advancement demands new skills and stronger digital readiness
- Geopolitical disruptions expose vulnerabilities across global supply chains and sourcing
The food and beverage world isn’t just evolving, it’s accelerating.
New ingredients are emerging, breakthrough processes are reshaping production, and innovative products are hitting the market at record speed.
And all of this is unfolding amid a whirlwind of mergers and acquisitions, transforming companies of every size and sector.
But as the industry pushes forward, the challenges are shifting just as fast, putting growth, resilience, and even global food security at risk.
The stakes are rising, and now C‑suite leaders are raising their voices, sounding the alarm on the pressures threatening the future of food.
Biggest threats facing food and beverage
Industry consultants Argon & Co have taken the pulse of the global leadership landscape, surveying more than 800 C‑suite executives worldwide to uncover the pressures they face, and the risks they believe will shape the future of food and beverage.
“The same three pressures remain at the top,” says James Watson, partner at Argon & Co. “Cost inflation, workforce challenges and technological change”.
Inflation and rising operating costs
The persistence of cost pressure is no longer just an operational headache, it’s a defining force in the way businesses chart their future. What began as short-term firefighting has evolved into a long-term strategic reckoning, pushing companies to rethink everything from investment priorities to supply chain resilience.
Rising input costs, volatile commodities, and unpredictable market conditions are driving leaders to make bolder, more future‑focused decisions – accelerating automation, reassessing supplier partnerships, and redesigning networks to withstand ongoing disruption.
Workforce challenges
Workforce challenges are emerging as one of the most urgent pressure points reshaping the food and beverage landscape.
What was once dismissed as a temporary labour crunch has evolved into a structural shift – one that is forcing companies to rethink how they attract, retain and empower the people who keep their operations moving.
Across the value chain, the story is the same – critical roles are becoming harder to fill, skilled workers are in short supply, and competition for talent is fiercer than ever. Manufacturing plants are grappling with chronic vacancies, logistics teams are stretched thin, and frontline employees are demanding not only better pay, but safer working conditions, clearer career pathways, and employers that prioritise wellbeing.
Technological change
Technological change is rewriting the rules of the food and beverage industry, fast.
AI, robotics, digital twins, advanced analytics, and automated production lines are becoming the backbone of modern operations. But while the promise of these technologies is huge, the path forward is anything but simple.
Companies are finding themselves caught in a high‑stakes race – innovate quickly enough to stay competitive, yet carefully enough to avoid disruption they can’t afford. Integrating new technologies into ageing infrastructure is proving to be a costly and complex challenge. Legacy systems don’t talk to modern platforms, data sits in silos, and even the most ambitious companies are discovering that transformation requires more than new equipment, it demands new mindsets, new skill sets and new ways of working.
Then there’s the pace. Technology is evolving faster than most organisations can absorb.
And cybersecurity adds yet another layer of complexity. As factories, supply chains and R&D labs become increasingly connected, the attack surface widens. A single breach can halt production, compromise food safety systems or expose sensitive supplier data, making digital resilience just as essential as physical safety.
Underestimated threats
Argon & Co’s research reveals a startling reality – many C‑suite leaders are underestimating the scale of the most serious threat looming over the industry - geopolitical risk.
While executives race to tackle cost pressures, workforce gaps and technological disruption, the global landscape is shifting beneath their feet in ways that could upend supply chains, destabilise markets and reshape the competitive order overnight.
“Geopolitical risk is now one of the biggest challenges facing food and beverage businesses, but our research shows it is still not being prioritised consistently in resilience planning,” says Argon & Co’s Watson. “The gap is less about awareness and more about action, particularly after several years of margin erosion.”
Risk misalignment, says Watson, is already visible across the sector. Geopolitical disruption have driven sharp increases in cocoa prices, forcing manufacturers, including Pladis and Nestlé, to reduce cocoa content in certain products, to manage availability and cost.
“Too often, action only comes once supply or margins are already under pressure,” says Watson. “In a ‘perma-crisis’ environment, resilience needs to be built before disruption hits – it’s about fixing the roof while the sun is shining.”
Change fatigue
It’s no secret that there’s been a lot of change at the top in recent months.
Philipp Navratil became Nestlé chief following the sacking of Laurent Freixe, Mondelēz made Luca Zaramella COO and CFO, and ex-Unilever boss Hein Schumacher became CEO of Barry Callebaut.
The problem is, that change is starting to exhaust the industry and stifle growth.
“Change fatigue at C-suite level is preventing food and beverage manufacturers from delivering large-scale, coherent transformation,” says Argon & Co’s Watson. “Leadership attention is increasingly pulled into short-term, reactive decision-making, causing major programmes to be broken into smaller, disconnected initiatives that fail to address underlying capability and systems gaps.”
But manufacturers don’t have to stay trapped in this cycle. Moving beyond change fatigue starts with reclaiming long‑term focus – rebuilding leadership stability, aligning transformation around a clear strategic vision, and investing in the capabilities that will actually move the needle.
By shifting from reactive firefighting to intentional, connected decision‑making, manufacturers can break out of fragmentation and return to driving meaningful, industry‑shaping growth.
Industry outlook
Looking ahead, the future of the food and beverage industry will depend on how effectively manufacturers respond to the complex pressures faced.
While rising costs, labour shortages, technological disruption, geopolitical uncertainty and leadership instability remain significant challenges, they also present clear opportunities for improvement and long‑term resilience.
Companies that prioritise strategic planning, strengthen supply chain visibility, invest in workforce development and adopt technologies that enhance efficiency and reliability will be better positioned to navigate ongoing volatility.
Ultimately, the industry’s trajectory will be shaped not only by external forces but by the decisions manufacturers make today. By focusing on capability building, operational coherence and proactive risk management, businesses can move beyond short‑term pressures and prepare for a more stable, competitive and adaptable future.
