Food and beverage whitepaper

RS Group provides critical recommendations on how European businesses can overcome regional and global challenges – from workforce shortages to shifting regulations to capitalise on growth opportunities and future-proof their operations.  

According to RS, we are entering a defining moment for the European F&B industry. Shifting demands of the health-conscious consumer, intensifying sustainability efforts, and technological advancements are all re-shaping the sector and accelerating progress. At the same time, persistent inflation, rising energy prices, workforce challenges, supply chain disruptions, and geopolitical conflicts create challenges for European businesses.  

Despite this turbulence, the sector remains robust. The European F&B market is currently valued at €1,149 billion, with the top four markets—France, Italy, Spain, and Poland—accounting for 57.5% of companies and 28% of market value. Projections suggest that the overall European market value will increase by 5% in 2025, and with global food demand expected to increase by 50% by 2050, there is a significant growth opportunity.  

In the UK and Ireland, the F&B markets exhibit strong growth despite economic headwinds. The UK sector is expected to grow by 19% to €315.2bn between 2023 and 2028. The outlook is equally bright in Ireland, with 58% of manufacturers rating the business environment favourably. 2024 saw a record year for exports, which have grown 5% year-on-year to reach €17bn.  

Despite this performance, complex challenges threaten to hinder this progress. A cost-of-living crisis with high food inflation, projected to remain from 2.4% to 4.9% for 2025, threatens tight profit margins. Rising labour and energy costs, partly driven by the increase in employers’ National Insurance Contributions and the National Living Wage, also bring economic challenges. Complex post-Brexit trade regulations with the rest of Europe and labour shortages threaten to undermine productivity and growth.   

In its report, RS Group highlights three key areas where F&B businesses across Europe must advance to thrive in the rapidly evolving sector. They are:  

1. Optimising agility and efficiency

Businesses are operating in a difficult environment characterised by supply chain volatility, high energy prices, labour shortages, and evolving customer and consumer demands. In an industry where downtime and waste can significantly impact profitability, companies must optimise production and maintain agility by leveraging technical expertise and innovations. Businesses are also focusing on developing strategic partnerships to enhance resilience in their supply chains and mitigate the risk of disruption.  

2. Thriving through the sustainability transition

As the global fight against climate change and environmental degradation intensifies, companies are tasked with meeting increasingly stringent sustainability targets and regulations. One of the most challenging yet critical requirements is Scope 3 reporting, which encompasses third party emissions across supply chains. While difficult to action, it is a vital step toward ensuring accountability and addressing the broader environmental impact of the sector.

Businesses need practical, cost-effective solutions to balance sustainability targets, consumer expectations and regulatory demands. By embracing supply chain transparency, circular economy initiatives and reducing operational waste, businesses can meet their goals while managing costs effectively.  

3. Maintaining safety in a disrupted labour market  

In a highly competitive market, where wages are typically low and conditions demanding, labour shortages and high worker turnover are common issues. Maintaining high safety standards can be challenging, with ongoing training requiring significant resources. Constantly evolving safety dynamics and workforce regulations add to an already difficult situation.  

Businesses facing this issue are reducing variability in safety equipment by consolidating suppliers, streamlining processes, standardising equipment, and enhancing traceability.  Investing in automation within factories is also a reliable, effective, and accurate way to minimise error, improve health and safety, and optimise production in real time. It’s also an important strategy applied to drive down costs and meet labour shortages. Lastly, automated and centralised compliance systems can be leveraged to improve the speed and accuracy of safety audits – an integral tool that enables companies to monitor the health of their machines and identify breakdowns before they occur.  

James Bullion, corporate industrial sector director EMEA at RS Group, commented: “The F&B industry is navigating an era of profound transformation, with global challenges such as inflation, supply chain disruptions, and a skilled labour shortage reshaping the landscape. Manufacturers are being pushed to integrate new technologies while maintaining the delicate balance between innovation and human oversight. Our research, however, reveals that this sector can thrive in the face of change.  

At RS Group, we continue to support businesses by providing best-in-class solutions and fostering strong partnerships that enable them to adapt, thrive, and remain competitive. In this whitepaper, we urge companies to continue this approach, improving agility, embracing transparency, bolstering supply chains and, harnessing technology to reduce costs and risks. Together, we can address the complexities within the F&B sector and innovate for a more sustainable future.”  

F&B companies are operating in an era of unprecedented change and disruption. Across Europe, businesses of all sizes are being challenged to navigate an increasingly complex economic and regulatory environment whilst integrating technological innovations and sustainability goals into their operations. However, with an impressive growth trajectory, the F&B sector is meeting these challenges head-on through collaboration and innovation.   

To read the full report, visit RS Group’s website here.