2025 Forecast: Strategies for Growth in Food and Beverage Manufacturing

As we look ahead to 2025, the food and beverage manufacturing industry faces a landscape of both challenges and opportunities.

Building on the insights from our CEO, Bill Remy, in a recent “Food for Thought Podcast”, let's explore the key trends and strategies that will shape the sector in the coming year.

Food Safety Takes Center Stage

Food safety has emerged as a critical focus for processors, with an increasing emphasis on sanitary equipment design and thorough cleaning procedures. This trend is driven by heightened consumer awareness and the potentially devastating costs of recalls. Companies are investing in equipment that's easier to clean and maintain, recognizing that sanitary design leads to higher productivity and reduced cleaning time².

Labor Challenges Persist

The industry continues to grapple with labor shortages, a trend expected to extend through 2025¹. With fewer people entering the manufacturing workforce, companies must prioritize retention and engagement strategies. Successful organizations will focus on:

• Developing robust onboarding programs
  
• Creating a positive workplace culture
  
• Implementing effective skill development initiatives

While some companies may consider relocating to areas with larger talent pools, this strategy comes with significant risks and costs, especially given the capital-intensive nature of food and beverage production¹.

The Critical Need for Human Skills in Automation 

The move towards automation shows no signs of slowing down, as processors seek to maintain high production levels amidst worker shortages². However, the increasing complexity of automated systems presents new challenges:

• Skilled maintenance personnel: There's a growing gap in maintenance technicians and leaders, which could become an Achilles' heel for many companies¹
• Software and system technology: Modern automation requires expertise in software and complex systems, creating a skills gap even among newer workers¹
  

To address these issues, companies should invest in comprehensive training programs and consider implementing AI-assisted maintenance systems to preserve and share critical knowledge.

Industry Consolidation and Economic Outlook

Industry consolidation is expected to continue, with mergers and acquisitions reshaping the food processing landscape². Examples include Mars acquiring Kellanova, PepsiCo acquiring Siete, and JBT acquiring Marel. This trend, along with potential interest rate cuts, may drive economic activity in the sector. 

Data Utilization and Analytics

Despite the abundance of data generated by connected systems, the food and beverage industry is only scratching the surface of its potential. Recent studies suggest that large companies use only about 51% of their available data, while smaller firms utilize even less¹. To improve data utilization:

• Establish clear data ownership and quality control processes
• Focus on solving specific business problems with existing data before investing in new data sources
• Bridge the gap between IT, engineering, and business teams to better leverage factory system data

A Balancing Act for the Year Ahead

As the food and beverage manufacturing industry navigates 2025, success will hinge on balancing technological innovation with a strong focus on people, processes, and operational excellence. By addressing labor challenges, leveraging data effectively, and embracing new technologies while maintaining core principles, companies can position themselves for growth and resilience in the evolving market landscape.