Food industry facing unprecedented financial pressure, new report reveals

Food and beverage businesses are navigating the most challenging financial environment in years, according to the latest report from compliance experts, Ideagen.

As we enter the busy holiday period, the latest findings from the Ideagen food industry audit report, show financial risks are dominating the industry’s top ten concerns with 64% of businesses citing credit as their top anxiety closely followed by commodity inflation (63%), liquidity (62%) and currency (53%).

"Few industries matter more to everyday life than food and beverage," said Ideagen CEO, Ben Dorks. 

“Whether it's the morning coffee that starts our day, the lunch that fuels us, or the dinner that brings families together, this sector touches all of us in the most fundamental way. 

“And yet the sector is facing a financial squeeze that is dominating boardroom agendas at a time when businesses are also managing multiple competing priorities like supply chain fragility and geopolitical volatility.

“Business leaders are working to balance immediate operational needs with the strategic imperatives that drive long-term success."

Liquidity has emerged as the fastest-growing risk, surging 16 percentage points from 46% to 62%, the largest increase of any risk factor Ideagen tracked.

Supply chain risk has climbed to fifth place at 49%, up from 38% in 2024, as businesses continue adapting to permanent complexity. Geopolitical tensions, extreme weather events and shifting regulatory landscapes are creating ongoing challenges. An example of this is the European Deforestation Regulation (EUDR) set to take effect in the coming 12 months. The regulation mandates comprehensive traceability and geolocation data proving products are deforestation-free, covering key commodities including coffee, cocoa, soy and palm oil.

The report also reveals how climate pressures are reshaping operations, with nearly half (49%) of businesses now citing climate-related risks. This figure would place climate in fifth position overall if combined as a single category. Extreme weather events are prompting companies to diversify their supplier base geographically, as traditional sourcing patterns face new challenges. With 2024 confirmed as the warmest year on record globally, the agricultural impact on food production is becoming increasingly visible.

Regulatory risk holds firm at 27%, reflecting ongoing compliance requirements that demand attention across the sector. Meanwhile, labor shortage and workforce challenges affect over a third of the industry when combined, highlighting the operational complexity businesses are managing.

"Business leaders are demonstrating resilience and adaptability in a demanding environment," added Ben. "The most successful operators are finding efficient ways to maintain their focus on quality assurance, compliance and operational excellence while managing immediate financial pressures.

“Technology platforms that integrate quality management, compliance and supply chain visibility can deliver both operational efficiency and strategic advantage - turning challenges into opportunities even in tight markets."

The report highlights that the business leaders who navigate this environment successfully will be those who maintain strategic discipline alongside financial management - with the approaches developed now shaping competitive positioning when market conditions normalize.

To download a copy of the full report, click here.