Food and drink sector expects rising costs in 2025 — survey

The biggest challenge facing businesses in the sector is cost of labour which was cited by 71%.

Irish food and drink manufacturers are expecting costs to increase across a wide range of areas in the coming months with labour costs being the biggest concern, a report by Food Drink Ireland has found.

According to the group’s Food and Drink Manufacturing Report 2025, the most widely expected cost increases will be wages, cited by 76% of business leaders working in the sector, along with the cost of raw materials and investment in sustainability — both of which were cited by 76% of people. 

Investment in digitalisation and cost of transport was cited by 62% of people each.

The biggest challenge facing businesses in the sector is cost of labour, which was cited by 71%.

Despite the concern over rising costs, business sentiment among those in the sector remains high — with 58% rating the manufacturing environment in Ireland as “good” or “very good”.

However, this is lower than the 70% positive response rate across all manufacturing sectors.

The report also found that 52% of food and drink manufacturers are expecting an increase in export sales, while 38% expect an increase in domestic sales in the months ahead. Just 43% are expecting an increase to profitability. The report said: 

Improving profitability remains the single greatest priority with greater emphasis on developing new markets in 2025 amongst food and drink enterprises. 

Over half of those surveyed said they expect an increase in productivity in the coming months.

Food Drink Ireland director Paul Kelly said that as deliberations on the next programme for government continue, “it is critical that policy can support the sector, address its competitiveness challenges, and harness opportunities for further growth”.

Food Drink Ireland is seeking help from the incoming government to reduce energy costs for manufacturers, protection against rising costs through PRSI rebates, and a reduction in regulations on the sector.

Food Drink Ireland represents around 150 food and drink manufacturers and suppliers across the country. It is a part of the business representative group Ibec.