2025: Add Agility to Your New Year’s Resolutions

 

By Phil Kafarakis, IFMA The Food Away from Home Association, President & CEO 

January 2025 

 

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Happy New Year. Or at least we all hope so!

It looks like we’re moving into another year where the food industry will be challenged by an array of variables and distractions like the ongoing threat of inflation, fluctuating commodities, uncertain labor costs, and unavoidable climate change. Of course, we can anticipate that consumers will continue to challenge us to remain cost focused, especially after they’ve been running up credit card debt during the holiday season. And that’s all before considering possible tariffs and other policy changes rolling out from the new administration.

Although these things may or may not have an impact on your specific day-to-day, you should stay vigilant and make sure your whole organization remains agile! 

We’re fairly certain that raw materials, particularly core items, will continue to be expensive. Between continuing inflation and disruptive weather patterns, the growing cycle has left food manufacturers weighing whether consumers will continue to buy products at these increased price points. So, you may have to start considering alternate ingredients.

If tariff hikes take place in the late spring, the growing season will be immediately impacted. Affected countries, particularly Mexico, aren’t going to stand around and take it. Prepare for higher commodity prices.

On the labor front, there are rumblings about a proposed immigration crackdown, but actual efforts on the part of organized labor will continue to activate strikes not only in stores (e.g., Starbucks), but also within distribution centers and with drivers (e.g., Sysco and Amazon). Getting qualified labor to work on farms and in plants will continue to be difficult too, especially if the current visa process is used as a political bargaining chip. 

And don’t ignore the overarching regulatory landscape. Certain regulatory policies that have already been signed into law are now heading into compliance stage—namely, the new definition of 'healthy' and FSMA 204 traceability. These may toss a monkey wrench into your innovation and product development cycles. 

Product recalls and market withdrawals that were major stories in 2024—McDonald’s onions, Boars Head deli meats and produce-related products—haven’t helped the situation. Policy makers may take more extreme stands about protecting consumer safety through more stringent food regulation. 

The impact of the Childhood Obesity Act (legislation on ultra-processed foods) and the popularity of weight-loss drugs (GLP-1 medications) on existing product lines will further complicate business in the foodservice industry. There are companies now beginning to explore new products that suit the needs of those on GLP-1. It’s still hard to tell which way the needle may point on all of this. 

Given the economics of all these expected changes, it’s inevitable that food will remain more expensive for everyone. Subjecting the processed food industry to any new requirements could have long-term ramifications and any push-back could lead to huge legislative battles that tie up food companies for years.

Overall, we say again, stay aware and informed. Things may happen quickly. If compliance deadlines escape your notice, you may hit a crisis point. We’re here to help and will do what we can to keep you agile and on track. Stay tuned to the IFMA The Food Away from Home media channels.

 

Learn more about IFMA The Food Away From Home Association, including details on membership and future events.

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