Pressure on the food industry slows growth in 2026

The brakes are coming on. While the food industry still posts more than 3% growth in 2025, that upward line stalls next year. That happens because companies have been running into the same wall for quite some time: too little capacity, too few people, and too many hurdles. Still, there is a small upside, as consumers will have a bit more to spend.

Production levels flatten

In 2025, production edges back toward the peak seen in 2018. A welcome improvement, even though part of it is simply catch-up demand. But that momentum fades in 2026. No surprise there: expansion is difficult due to grid congestion, limited nitrogen space and a tight labor market.

The shrinking livestock herd doesn’t help either. Even the temporary rise in milk supply doesn’t change the fact that long-term availability will tighten. Dairy processors therefore rely more on milk from Belgium and Germany and shift toward products with higher added value. Slaughterhouses face a declining number of animals as well, and their volumes are falling.

Producer confidence turns negative

Producer confidence remains consistently negative this year, and even more so in recent months. Manufacturers struggle with investments that are difficult to secure, while the number of customers reporting lower demand continues to rise. Revenue increases mainly because of higher prices, not because of more volume. That creates pressure, especially since the preliminary production figures paint a more favorable picture than reality.

Meanwhile, the dynamics in raw materials continue to shift. The cocoa industry faces significantly lower availability, which keeps weighing on production volumes. Potato and sugar processors are dealing with abundant stocks and are pushing for acreage reductions in 2026. And on top of that, prices for dairy, sugar, cocoa and energy are all falling. That’s welcome news for buyers — and eventually for consumers — but far less favorable for primary processors.

Trade continues to search for balance

Outside the Netherlands, revenue is growing faster than at home. Exports to Poland and Spain show strong momentum, while the US and China lag slightly behind. Manufacturers are adjusting their strategies due to earlier trade disruptions; sometimes through small steps, sometimes through larger moves such as M&A. New trade agreements give companies better access to raw materials such as soy, fish, nuts and palm oil. And if the Mercosur agreement is signed, the European market will gradually open further to South American sugar, beef and poultry. That creates both opportunities and tension within the sector. Because even though Trump’s tariff storm has eased, geopolitical uncertainty remains high.

Political choices will make the difference

With a new cabinet on the way, nitrogen policy, grid congestion and trade policy immediately move to the forefront. Several parties advocate binding commitments to improve the healthiness of food. Ideas range from sugar taxes to legally defined limits on sugar content. Innovation is also gaining attention, including cultured meat and biotech, although lengthy EU procedures remain a major hurdle. The Netherlands will continue to function as a testing ground, but whether that leads to faster market access in Brussels remains uncertain.

Ing.nl