As of mid-2026, Ireland’s food and beverage industry faces tougher conditions, with slower export growth, ongoing cost challenges, and supply chain issues caused by adverse weather, according to recent analysis.
Export Performance Shows Softening
Ireland’s food and beverage exports totaled €9.1bn in the first half of 2026, a 3% decrease from the same period in 2025, which was exceptionally strong.
The report, from Lucy Ryan, Head of Food & Beverage Sector at Bank of Ireland, found that prepared consumer foods maintained export levels. However, shipments across dairy, meat, beverages, seafood and horticulture all recorded declines.
Inflation and Operating Costs Remain Pressures
Despite the softer export performance, inflationary pressures have moderated. Food inflation stood at 0.6% in Ireland in June, compared with 1.7% in the UK and 1% across the EU.
Rising operating costs and weather-related challenges continue to place pressure on businesses throughout the supply chain. While annual food inflation eased, high input costs and weather-related supply pressures mean food prices will remain raised, Ryan said.
A survey found that 91% of food businesses saw increased costs in 2025, and 85% expect further cost rises in 2026, putting pressure on the industry.
Extreme heat and low rainfall across Western Europe this summer have also raised concerns about harvest yields and the availability of raw materials. This has implications for food and beverage production costs in the months ahead.
Businesses Adapt Through Diversification and Technology
Geopolitical uncertainty is influencing business strategy. Trade tensions between major economic blocs are encouraging exporters to seek new international markets and reduce dependence on individual destinations. Diversification is becoming an increasingly important component of long-term growth strategies for Irish producers.
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Businesses are also accelerating investment in technology. The report noted growing adoption of automation, robotics and integrated production systems as companies seek to improve productivity and manage labour shortages. Artificial intelligence is moving beyond experimentation and is being used across quality control, predictive maintenance, production planning and supply chain management.
The sector is also adapting to new EU packaging regulations. These introduce additional recyclability, labelling and reporting requirements. The EU Deforestation Regulation will bring greater traceability obligations for companies selling commodities such as cattle, cocoa, coffee and soy into European markets from December.
Retail and M&A Activity Show Strength
Retail performance has remained encouraging. In the Republic of Ireland, grocery sales increased by 6.3% during the four weeks to 12 July, supported by warm weather and major sporting events. Lidl recorded sales growth of 10.8%, increasing its market share to 14%. Dunnes Stores remained the country’s largest retailer with a 23.7% share of the market.
Merger and acquisition activity remains active. Notable transactions included Swedish poultry group Scandi Standard’s €127m acquisition of Glenhaven Foods in Co Wicklow and the €75m acquisition of Irish functional drinks brand VITHIT by London-listed Nichols plc. Dublin-based Cobblestone Brands also continued its expansion through acquisitions in the international spirits sector.
Cautious Outlook for the Remainder of 2026
Looking ahead, businesses are expected to take a cautious approach to investment, prioritizing productivity, sustainability, and resilience, as they work through the challenging trading environment.
The report identified several priorities for operators over the coming months. These include tighter cost control, investment in automation and AI, advancing sustainability initiatives, diversifying export markets and strengthening supply chain resilience.
The overall outlook remains cautiously positive. According to findings from a joint Love Irish Food and Bank of Ireland survey, 62% of food and beverage operators said they remained positive about business opportunities despite broader economic uncertainty.
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