The 2025 North American Food Sector Study: Navigating Shifts in Confidence, Costs, and Talent
In 2024, optimism carried much of the food and beverage sector through inflation and supply chain pressures. Fast forward one year, and the landscape has grown more complex. The 2025 North American Food Sector Study shows a pessimistic outlook, dealing with tariffs and workforce challenges, yet demonstrating resilience through adaptability.
A Tale of Two Countries
Confidence is no longer shared equally across borders. In Canada, 87% of business leaders still see growth on the horizon, projecting optimism for the next 12 to18 months. South of the border, however, fewer than half of U.S. respondents feel the same. This gap underscores a growing divergence in how companies are experiencing, and preparing for the future of the food sector.
Tariffs Bite Into Margins
One year into tariff implementation, the effects are sharper and more widespread. In 2024, fewer than a quarter of executives reported a negative impact. By 2025, that number has jumped to three-quarters. Raw material and packaging costs are considered the areas where the impact was felt the most.
Sales Slipping, Prices Rising
These pressures are being felt in real time. Over half of respondents reported declines in sales volume, with many potentially looking to pricing increases as a survival strategy. It’s a delicate balancing act: protecting margins without eroding consumer trust in a cost-sensitive marketplace.
Labour Market Under Strain
If tariffs weigh on balance sheets, labour dynamics are testing operational resilience. In 2024, only a quarter of respondents described labour conditions as negative. In 2025, that figure has nearly doubled. For U.S. companies, the picture is even starker: just 6% describe their labour outlook as somewhat or extremely positive.
Talent: Hard to Attract, Harder to Keep
Finding and keeping skilled workers has become one of the sector’s defining challenges. In 2024, 20% of executives described retention as difficult. This year, two-thirds say the same. Recruitment is also becoming harder, with 44% struggling to attract new talent. To combat this, many are outsourcing work, while others are looking to automation solutions.
Succession Takes Center Stage
Leadership transitions are also moving higher on the agenda. A significant portion of founders and executives are planning succession within the next five years, yet many lack a formal roadmap. For those preparing, the trend is shifting away from full exits toward stepping back into shareholder roles supported by professional management. Notably, the U.S. food sector is showing a stronger appetite for mergers and acquisitions compared to their Canadian counterparts.
Building Resilience in Uncertain Times
As Richter Partner Michael Black observes: “There is no single solution to the challenges companies are facing, meaning that companies are identifying and addressing their biggest exposures, whether it is margin preservation, operational efficiencies, or labour optimization. While current growth prospects may be subdued, those who weather the storm are likely to emerge stronger.”
The 2025 study paints a picture of an industry facing tough headwinds but also one with clear pathways forward. For those who can adapt quickly, invest strategically, and retain the right people, opportunity remains within reach.
