2027 food and beverage industry outlook: Ripe with opportunities — but only if you’re willing to adapt

High materials costs and a challenging economy mean you probably won’t make record profits over the next 12 months. But 2027 could still be a transformative year for your business.

In this 2027 guide to food and beverage industry trends and opportunities, you’ll find out why companies that focus on getting lean, efficient and willing to experiment will set the stage for long-term success — while those that don’t will flounder.

Keep reading to learn more.

What are the top challenges for food and beverage producers in 2027?

In 2027, food and beverage companies will continue to deal with significant cost pressures and operational challenges. Watch for consistent big picture trends across subsectors, including:

• Expensive raw materials: Prices are high across the board, cutting into profitability even as many consumers are also battling cost pressures of their own.
• Operational technology deficits: Most businesses are still running on legacy systems and outdated processes. Even as many businesses have begun exploring creative new product areas, like health-conscious options, aging tech makes it tougher to experiment.
• Startup competition: Established food and beverage producers are facing fresh competition from startups that typically have better technology, which they use to do R&D and innovate with new product ideas.
• Unclear cost structures: Too many businesses simply don’t have a clear picture of their costs, making it harder to budget and quote effectively. This is especially damaging during an era where tariff, raw materials and fuel costs are putting so much additional pressure on margins.
• Limited forecasting: Aging systems also make it tough to do financial forecasting and modeling, limiting businesses’ ability to do scenario planning or game out different opportunities before committing to one.
• Workforce challenges: It’s still hard to find skilled labor. High living costs mean more workers are quicker to jump to another job that offers a pay increase, and many workers also want more career fulfillment than the industry has been able to offer.
• Failed AI implementations: Companies are experimenting with AI, but without having made the necessary investments in a data foundation, governance and thoughtful processes needed to actually deliver results.

Each of these issues is challenging. But none is an insurmountable barrier to your business’s success — especially if you embrace this year’s opportunities.

What are the big opportunities for food and beverage producers in 2027?

In 2027, the food and beverage producers who succeed will be those willing to adapt and break old habits. Think of this year as an opportunity to build a foundation for something new: one that may not deliver big returns right away but will set your company up to thrive over the next several years.

Embrace change and experimentation

Rising costs and changing consumer preferences are shaking up established industry paradigms. This is a huge opportunity for your business to experiment with new product ideas or audiences, because brand loyalty is weaker than ever, and the market as a whole is more up for grabs.

If you’re willing to try a bunch of new things, test different recipes and then double down when something hits, you might be able to carve out a big new niche for yourself.

Collaborate with your competitors

Food and beverage producers tend to be skeptical of their competitors, but today’s business climate will reward those companies willing to work together. High raw materials and transportation costs mean that companies that collaborate on bulk purchasing will have a major advantage, because they’ll benefit from economies of scale that most individual producers simply can’t achieve on their own.

In an era of rapid technological change, businesses that communicate with and learn from each other also have an opportunity to innovate more effectively.

Explore generics — and higher-end products

As inflation and high living costs make more consumers price-conscious, many are turning to generics to find better deals. This is a good moment to move into that space if you’re not already there.

You’ll have to invest in modern, efficient production and systems or you won’t be able to keep your margins, but there are tax incentives available to help make this easier.

Paradoxically, inflation has also narrowed the pricing gap between commodity food and higher-quality local alternatives. As a result, many consumers are also more willing to spend on higher-quality options if the price gap is fairly small, especially as more people are now interested in healthier foods and animal living conditions on farms.

Action steps: Here’s how food and beverage CEOs can succeed over the next 12 months

Over the next 12 months, food and beverage CEOs must act decisively to invest in efficiency, data, technology and experimentation — or get left behind. Here are key steps to move forward:

1. Stop making assumptions

Stop assuming that your business is running as effectively as it could be. Most food and business producers could be operating more efficiently, filing for more tax incentives or negotiating better deals with suppliers. Simply questioning your baseline assumptions can often reveal a path to stronger margins.

2. Build a data foundation

You want to implement AI, understand your costs or improve your operational results? You need a data foundation in place. Part of this means knowing how you collect data and where it gets stored, but your data also needs to be organized enough that it can be analyzed or made useful to AI.

3. Fill your technology deficit

Implement the technology base you need to operate a flexible, modern business. A new ERP system, for example, delivers stronger financial and operational visibility, making it easier to control costs, try new products and manage inventory. It will be increasingly tough to keep up with competitors if you don’t have a solid tech base in place, so this is the year to do it if you haven’t yet.

4. Get clear on your costs

To succeed in a high-cost environment, you need to be able to accurately track your spending. Once you have a data foundation and modern systems in place, this is much easier to do, and it will open the door to finding efficiencies and identifying waste.

5. Look into cost offsets

Investing in a data foundation and new systems costs money. However, cost offsets like tax incentives can make this investment significantly less painful — if you actually use them. Don’t assume your accounting team is already claiming everything you qualify for, either. Look into fixed asset appreciation tax credits, R&D incentives on process improvements, cost segregations and energy tax incentives for plant upgrades.

6. Test new ideas

Come up with 100 new product ideas, test them all and see what sticks. Doing this won’t be cheap, but in today’s fluid consumer market, it’s a way to find and dominate your niche.

7. Strengthen your employee experience

In a tough labor market, employee experience matters more than ever. Ask your employees how you can help them feel happier and more fulfilled at work and then listen to what they have to say.

Read more

• Are legacy systems hurting food and beverage producers?
• Food and beverage producers: Is it time to consider an ERP?
• 9 top tariff mitigation strategies for manufacturing CFOs