Export strength and steady investment continue to support producers navigating inflation, regulation and supply chain disruption, reports Lucy Ryan, head of Food & Beverage sector at Bank of Ireland.
Ireland’s food and beverage sector continues to demonstrate resilience in 2026, supported by strong export performance and ongoing investment, even as producers contend with rising costs, regulatorychange and global supply pressures.
New analysis from Bank of Ireland’s latest sectoral report highlights an industry adapting to a demanding operating environment shaped by inflation, geopolitical disruption and evolving consumer expectations.
“The effects of the Middle Eastern conflict experienced by operators include freight and logistics surcharges, energy price hikes and supply chain delays”
“Global conflict, rising costs, tighter EU regulatory requirements and changing consumer demands continue to shape the food and beverage sector,” writes head of Food & Beverage Sector at Bank of Ireland Lucy Ryan.
Exports remain a central pillar of performance. The sector delivered a record €18.9 billion in export value in 2025, an increase of 9% year on year. The UK retained its position as the largest market, accounting for more than €7 billion or 37% of exports, while the EU followed closely at 36% with strong growth.
However, early signals in 2026 point to stabilisation rather than further expansion. “In January February 2026 exports were flat year on year with exports to the EU and China behind 2025,” the report states.
Inflation and input costs remain central concern
Food price pressures continue to weigh on the sector despite relatively moderate headline inflation rates earlier in the year. The report notes that “food inflation remains a concern in 2026” and points to global commodity trends, with the UN Food Price Index rising to 130.7 in April and “price increases across all commodity groups,” indicating further upward pressure ahead.
Rising input costs are being compounded by external shocks. The ongoing Middle East conflict is feeding through into higher energy prices and added costs across logistics and transport.
“The effects of the Middle Eastern conflict experienced by operators include freight and logistics surcharges, energy price hikes and supply chain delays,” Ryan notes.
Shipping costs have also shown volatility, with the Drewry World Container Index reaching $2,286 in early May following a period of fluctuation. These pressures are uneven across the sector, depending on routes, suppliers and contractual arrangements, but remain a consistent concern for producers and exporters.
Regulation reshaping the operating landscape
Alongside cost pressures, regulatory changes are becoming an increasingly important factor in strategic planning. Several major EU measures are due to take effect over the coming months, including new packaging and waste regulations requiring all packaging to be recyclable from August 2026.
Food safety requirements are also tightening. “Enhanced food safety regulations will apply from 1st July 2026… affecting prepared and ready to eat foods,” the report notes, referencing updated rules on Listeria controls.
Additional changes around chemicals in food packaging and forthcoming deforestation regulations are expected to increase compliance requirements across supply chains, particularly for exporters.
At the same time, potential alignment between UK and EU food safety standards could ease some trading friction. Ongoing discussions around a sanitary and phytosanitary agreement are seen as a possible positive development for cross border trade.
Sector investment remains active
Despite these headwinds, investment activity across the sector remains steady, with companies focused on improving efficiency and competitiveness. Businesses are directing capital towards automation, robotics and production upgrades to manage labour costs and enhance productivity.
“Across the sector, recent areas of investment include automation, robotics and production efficiencies, to maintain competitiveness and offset high labour costs,” the report notes.
Digitalisation is also gaining traction, particularly in areas such as traceability, compliance and data management. These capabilities are becoming increasingly important as regulatory requirements expand and supply chains grow more complex.
Mergers and acquisitions continue to shape the landscape. Recent deals include Dawn Meats’ acquisition of a 65% stake in New Zealand’s Alliance Group, and Greencore’s £1.2 billion purchase of Bakkavor, creating a major prepared foods business with operations across 36 sites.
Sustainability investment remains a priority, particularly where it aligns with commercial outcomes. Producers are focusing on initiatives that deliver measurable returns while supporting environmental goals.
Pressure points in specific segments
While the overall sector remains stable, certain segments are facing more acute challenges. Seafood producers, for example, are dealing with reduced fishing quotas for key species such as mackerel, blue whiting and boarfish.
The report highlights that “fishing quota reductions for 2026 pose significant concerns for trawlers and processors dependent on these species,” even after some revisions to earlier proposals.
Alcoholic beverages are also under pressure due to changing consumption patterns and weaker discretionary spending in some markets.
Focus shifts to resilience over expansion
Looking ahead, the sector is expected to prioritise stability and efficiency rather than rapid growth. The emphasis for 2026 is on strengthening operations, managing costs and ensuring compliance.
“For most Irish food producers, 2026 will focus on operational resilience rather than expansion, with priority areas being automation, efficiency and compliance,” Ryan says.
She also notes that increasing regulatory complexity may lead to consolidation, as smaller firms seek scale or partnerships to remain competitive.
Leadership perspective
In her foreword to the report, Paula Feehan, Head of Sectors at Bank of Ireland, emphasised the broader context shaping the industry and the importance of adaptability.
“Irish businesses are facing an ever changing economic and trading environment, particularly in the wake of enduring global events, supply chain disruptions, increased costs and changing consumer behaviours,” she said.
Feehan pointed to the value of sector insight and close engagement with industry stakeholders, noting that the bank’s specialists “have a deep understanding of the challenges and opportunities that you face.”
She added that the report aims to provide “analysis on the current Irish business landscape and share outlook for the year ahead,” helping companies prepare for the months ahead.
The message from industry leaders is clear. The food and beverage sector continues to deliver, supported by strong fundamentals and sustained investment. The year ahead will be defined by careful execution, with resilience, efficiency and strategic focus at the centre of decision making.
-
Bank of Ireland is welcoming new customers every day – funding investments, working capital and expansions across multiple sectors. To learn more, click here
-
For support in challenging times, click here
-
Listen to the ThinkBusiness Podcast for business insights and inspiration. Latest episodes are here. You can also listen to the Podcast on:
-
Spotify
-
SoundCloud
-
Apple
