UK Food & Drink Outlook – 2025/26 Update
We’ve revisited the UK food and drink process manufacturing sectors as we head into the second half of 2025. With ongoing volatility in the market and a shifting investment landscape, we’ve updated our outlook to reflect the latest conditions, trends, and project opportunities as captured on our MyProtel capex project tracking platform.
While there are signs of optimism, particularly in longer-term planning and high-value investment proposals, the broader landscape remains challenging for the UK food and drink sector in 2025 and into 2026.
Food & Drink Sector Sentiment & Activity
There are fewer projects in play than five years ago, and capital approval decisions are taking longer than ever to finalise. Interest rates remain a significant barrier, with many projects being paused or reverted to the pre-sanction stage due to rising costs and labour constraints.
We’re seeing manufacturers delay sanction decisions as a strategy to protect value, particularly where internal budgets are tight and labour availability is restricted. In several cases, projects have been pulled at the final hurdle, sometimes because operating the completed factory wouldn’t be economically viable in the current market conditions.
Despite this, many firms are busy with ongoing internal upgrades, and a growing number of higher-value projects are now entering the design and feasibility phases. We’re also seeing greater pressure on suppliers to demonstrate long-term value and RoI, with 6–9 month lead times becoming more typical from design through to implementation.
Trends in the UK Food & Drink Sectors
Key factors shaping current capex project activity in the UK food and drink sectors in 2025/26 include:
- Fewer speculative builds, with more projects tied directly to production efficiency and consolidation.
- Location decisions are increasingly workforce-driven, with facilities emerging near housing for better staffing resilience.
- Volatility in project timelines continues. Some opportunities emerge and move quickly, while others face extended delays.
- Some regions like Avonmouth in the South West (benefiting from Freeport status) are seeing increased activity, alongside other similar growth zones in the North West and North East.
Food & Drink Capex Project Trends
At Protel, we’re tracking a varied number of capex project schemes in the UK food and drink sector, with the trend in 2025 including:
- Asset replacement and rationalisation projects, particularly from medium to large manufacturers streamlining multi-site operations.
- Privately-owned businesses scaling up with new builds and extensions.
- Strategic site closures and acquisitions, often resulting in capacity being transferred and new capex opportunities therefore arising elsewhere.
Our MyProtel platform is currently tracking over 350 live UK food and drink projects, with a combined potential investment value of just over £6.4 billion.
Capex Project Timescales – UK Food & Drink 2025
As in 2024, project pipelines remain difficult to forecast precisely. However, we expect a busier period of project implementation from late Q3 through Q4 2025.
Suppliers should be ready to move quickly, as some delayed projects may suddenly move forward, while others might pause due to cost or resource constraints. Staying in close contact with key decision makers is more important than ever.
Trends in UK Food & Drink Sector Manufacturing
Emerging and strengthening areas of capex project activity include:
- Brewing (including low/no alcohol)
- Healthy convenience and ready meals
- Soft drinks
- Fresh produce & cold storage upgrades
- Speciality bakery – e.g. sourdough, rye, gluten-free
- Pet food and meat processing
- Flavour and fragrance ingredients
- Automation and energy efficiency initiatives
- Decarbonisation and net-zero planning
- Wholesale growth – Bidfood, Brakes, Harlech, and others expanding infrastructure
Many manufacturers are taking a value engineering approach. Some are foregoing main contractors to run projects internally and stretch budgets further. This makes relationship-building with internal stakeholders and procurement professionals critical.
Conclusion
The UK food and drink sector 2025/26 outlook is shaped by economic caution, cost pressures and labour constraints. However, this is underpinned by a resilient appetite for growth and consistent innovation among forward-looking food and drink manufacturers.
Suppliers will face fierce competition and longer decision cycles, but those who are well-positioned and responsive can still secure significant opportunities. With larger projects re-entering pipelines in 2025 and into 2026, it’s essential to maintain close ties with internal stakeholders and move quickly when projects advance.
The market remains fluid, but for those able to navigate the uncertainty, the second half of 2025 promises a renewed wave of investment upon which to capitalise.
Explore Live UK Food & Drink Capex Projects
Want to see the projects we’re tracking in real time? Access our demo trial system to explore live project data, investment values, and key decision-maker insights.
Start your demo now and discover how MyProtel can support your sales strategy.