The food and beverage industry in New York and New Jersey is entering 2025 with confidence and strategic optimism. According to Grassi’s annual Food & Beverage Survey, business leaders in the sector are leveraging technology, refining operational strategies, and adapting to economic challenges while positioning themselves for continued growth. The survey, which gathered insights from 169 industry decision-makers, highlights the successes of 2024 and the critical areas of focus for the coming year. Here are the key takeaways that food and beverage company owners and executives should keep at the forefront of their minds.
Strong Performance in 2024 Fuels Optimism for 2025
Despite facing macroeconomic uncertainties, the food and beverage sector closed 2024 on a high note. Over two-thirds of the companies surveyed reported revenue increases, with many experiencing double-digit growth averaging 20%. Profitability followed a similar trajectory, with 56% of companies reporting profit growth, primarily driven by strategic investments in technology, supply chain efficiency, and employee productivity.
Optimism remains strong: 87% of respondents expect revenue growth in 2025, and 83% anticipate profit increases. Notably, larger companies are leading this expansion, particularly those investing in geographic distribution and remote selling channels.
Economic Pressures and Inflation-Driven Cost Increases
While optimism prevails, companies must navigate significant economic headwinds. Economic uncertainty ranks as a top concern for 42% of respondents, followed closely by rising interest rates, which have increased by over 60% compared to the previous year. Tariffs also loom as a significant factor—90% of companies anticipate higher operating costs, with an expected increase of 3–5% in 2025.
In response, businesses are taking proactive steps to mitigate rising costs. Nearly half of the companies surveyed are sourcing lower-cost suppliers, renegotiating contracts, and reducing packaging expenses. Some opt to pass costs on to consumers, with 85% of companies increasing prices in 2024—typically in the 1–4% range.
Technology and Automation: A Critical Investment Area
Technology remains a cornerstone of industry advancement. Companies view AI and predictive supply chain management as game-changing tools, with two-thirds planning to expand their use in 2025. Other key investment areas include ERP systems for supply chain visibility, automation to streamline manufacturing, and digital sensors for remote operations.
Cybersecurity is also gaining traction, as more than half of companies express concern over their ability to protect sensitive data. Dual-factor authentication and outsourced cybersecurity services are becoming standard practices to mitigate risks.
Addressing Workforce Challenges with Strategic Solutions
Workforce management remains a pressing issue, with staffing concerns persisting despite post-pandemic stabilization. Although the percentage of companies experiencing staffing shortages has declined, 57% remain moderately or highly concerned about maintaining workforce levels.
To combat these challenges, businesses are adopting flexible scheduling, financial incentives, and automation to reduce dependency on manual labor. Notably, companies with strong profit growth in 2024 were more likely to have expanded their labor pool and implemented increased automation than their counterparts with stagnant or declining profits.
Supply Chain Resilience and Inventory Management
Supply chain disruptions remain a major obstacle, with 63% of profit leaders citing supply chain risks as a critical challenge in 2024. In response, companies prioritize automation in inventory management and diversifying their sourcing strategies.
With more companies shifting toward bulk purchasing and leveraging automation to track and optimize inventory levels, just-in-time inventory management has seen reduced reliance. Digital tools and supply chain software are helping businesses maintain agility in a volatile economic landscape.
Capital Investments Drive Expansion and Innovation
The adage “spend money to make money” holds true in the food and beverage industry, with 83% of companies planning to increase capital expenditures in 2025. Investment priorities include expanding production lines (69%), upgrading technology infrastructure (63%), and enhancing facilities (54%).
The emphasis on capital investment aligns with companies’ broader strategic goals—improving operational efficiency, launching innovative products, and expanding into new sales channels.
Looking Ahead: Key Areas of Opportunity and Concern
As food and beverage leaders chart their course for 2025, they are eyeing several growth opportunities. Expanding into new markets, refining marketing and sales strategies, and leveraging AI-driven efficiencies rank among the top priorities. However, the industry must also contend with ongoing challenges such as high labor costs, supply chain uncertainties, and increased competition.
The biggest concerns heading into the year include economic uncertainty (42%), high interest rates (33%), and tariffs (19%), which could further impact raw material costs and supply chain operations.
Final Thoughts
The food and beverage sector is poised for another dynamic year. Companies can navigate uncertainty by embracing innovation, strengthening supply chain resilience, and strategically managing costs while capitalizing on emerging opportunities. As 2025 unfolds, staying agile and investing in key growth areas will be crucial for long-term success in this ever-evolving industry.
