June 9, 2025 - The food and beverage industry is navigating another shift, with businesses now feeling more hopeful about the future. However, with ongoing challenges such as inflation and high interest rates, food and beverage companies are still experiencing modest growth. Companies are focusing on improving their supply chains and implementing new technologies to provide their business with a competitive advantage. This article explores the opportunities and challenges in the food and beverage subsector as reported by business leaders in our 2025 Manufacturing and Distribution Pulse Survey Report.

Key Challenges and Emerging Concerns

While 83% of food and beverage companies are experiencing revenue growth, over half of these report only modest or some growth. This suggests that while the top line is increasing, profitability may still be under pressure, largely due to inflation, supply chain constraints, and inability to fully pass costs onto customers, as noted by survey respondents.

Rising interest rates (28%) and the high cost of capital (26%) rank among the top concerns within this subsector. Additionally, 80% of respondents noted that they anticipate tariffs to impact their business, directly or indirectly, leading some to consider and explore mitigation strategies. These factors collectively highlight a challenging financial environment where growth is occurring, but margins remain tight. Effective cost management is critical to sustaining profitability.

Growth Momentum and Opportunities 

Forty-two percent of food and beverage survey respondents noted that they anticipate a sale of their business within the next three years. To maximize business value, companies are focusing on improving sales infrastructure (37%), organizational talent (36%), and financial reporting (34%). Additionally, 36% noted that they expect to acquire another business in the same timeframe, reflecting much anticipation of mergers and acquisitions (M&A) transactions within this subsector.

Looking towards the future, food and beverage business leaders identify implementing new products, stabilizing their supply chain, and utilizing advanced technology as their keys to growth. These priorities show a focus on innovation, operational resilience, and data-driven decision-making as companies prepare to navigate continued market uncertainty and shifting consumer expectations.

According to our survey respondents in the food and beverage subsector, the factors most important to customers are:

1. Customer service – 32%
2. Technical knowledge – 29%
3. Product availability – 29%
4. Pricing – 28%
5. Range of products – 16%

To drive future growth, it is critical for food and beverage companies to routinely assess and adequately respond to their customers’ evolving expectations and needs.

The Road Ahead

The food and beverage subsector stands at an intersection of opportunity and constraint. Modest financial growth, labor shortages, and cost pressures challenge progress. However, embracing technology and a willingness to evolve through a potential M&A transaction highlights a subsector preparing itself for a strong future amid uncertainty.

Citrin Cooperman’s Manufacturing and Distribution Pulse Survey Report

Citrin Cooperman’s Food and Beverage Industry Practice is a core focus of our Manufacturing and Distribution Industry Practice. Our team of professionals provides innovative, actionable solutions to help companies achieve their strategic vision. Explore how this subsector compares to the full industry by accessing the 2025 Manufacturing and Distribution Survey Report.

Access the 2025 Manufacturing and Distribution Pulse Survey Report