Key trends for 2023’s food and drink industries

By Michelle Perrett

- Last updated on GMT

Read our long awaited 2023 report on key food and drink trends
Read our long awaited 2023 report on key food and drink trends

Related tags Food prices Inflation Supply chain labour shortage Food security Nutrition Flavour

With the last several years including a series of unprecedented events and challenges, Food Manufacture seeks the expertise of several food and drink leaders to find out what’s on the cards for 2023.

The economic crisis, the Ukraine war, energy costs, inflation, cost-of-living, consumer habits as well as concerns about health are all set to be key trends for 2023. But one thing is for certain, predicting what might happen in 2023 with absolute certitude is going to be difficult if the whirlwind of 2022 is anything to go by.

Who would have thought at the beginning of last year, when the UK was still in the grip of the pandemic that part of Europe would be at war, the UK see three Prime Ministers taking the helm, and the supply chain issues that we thought were causing disruption were just the precursor to more major issues?

So whilst predicting may be trickier than usual, here are 10 key trends that look set to shape the year ahead.

The global economy

The current global economic climate hit by the impact of the Ukraine-Russia war has seen energy costs explode, food inflation spiral, animal feed prices increase, and a cost-of-living crisis ensue.

Rupert Ashby, chief executive of the British Frozen Food Federation (BFFF), predicts that food producers and manufacturers will face a tough 2023.

He cites not just energy prices, but high ingredient costs mixed with labour shortages that will continue to pose challenges for the industry.

The government’s Energy Bill Relief Scheme provides a welcome buffer for businesses to help meet the cost of energy during the winter and the results of their review of the scheme are due shortly. However, the Chancellor has made it clear that any ongoing relief will be less and only for certain qualifying businesses,” ​warned Ashby.

While Baker & Baker CEO John Lindsay says he expects inflationary pressures to continue into 2023, although he hopes the worst of the “economic headwinds”​ have now passed and “stabilised”.

He continued: “The food industry has worked extremely hard to manage extreme disruption to supply chains caused by the war in Ukraine and COVID-19, and demonstrated resiliency and flexibility to ensure food has remained on shelf.”

Food supply and security

The National Farmers Union (NFU) has already called on the UK Government to support British food or face “sleepwalking” into a food supply crisis​.  

But there seems to be no quick fix to these widespread supply chain issues.

Tim Clarkson, Cluster Director UK and Ireland for Dawn Foods, believes that that issues, such as avian flu and the Ukraine war, continue to have an impact on the supply of raw materials; as a result, food manufacturers are looking to mitigate these challenges.

“We look to source alternative ingredients which can be used without having to change specifications or recipes, investing significantly in R&D to enable us to do this. This will continue for the foreseeable future,” ​he commented.

“Like other large manufacturers, Dawn has the benefit of being able to purchase ingredients on a large scale if required. We hold more stock too, meaning that this will keep our supply chain and production moving efficiently to meet customer requirements.”

The business of manufacturing

There is no doubt that 2023 is going to be a tough year. Food and drink manufacturers are facing the challenges of potential strike action, increases in production costs, as well as business failures and factory closures.

The Make UK/BDO Q4 Manufacturing Outlook survey has already revealed that the food and drink manufacturing sector is forecast to contract by -1.5% in 2023 due to the impact of the current economic crisis.

While, Mark Lynch, partner at corporate finance house Oghma Partners admits some early-stage businesses will struggle to survive and have lower valuations due to the current climate.

“As an alternative, these companies may look at selling as an exit route and we expect to see an uptick in M&A as a result of these more challenging conditions,” ​he explained.

British Meat Processors Association (BMPA) chief executive Nick Allen, added: Given all these pressures in the supply chain it is inevitable that there will be more consolidation and many businesses are looking at rationalising their operations.”

Labour shortages

The industry remains at the mercy of a labour crisis. The Association of Labour Providers says that that government plans to recruit domestic workers​ has already proved “ineffective”.

While the UK Government has confirmed that there will be 45,000 visas for seasonal workers​ available for businesses next year, the situation looks set to remain difficult throughout 2023.

Allen states that food processors have seen input costs rise steeply with energy costs rising four-fold and that most plants are running between 10 and 15% short on labour.

“They are only coping by reducing lines and using more overtime. And, while the skilled visa system is enabling processors to find workers from further afield, this comes at a significant cost. As an example, bringing one worker in from the Philippines costs about £12,000.

“Given the tight labour market in the UK, this seems to be the only option to alleviate the problem in the short term. We would like to think that we will not see a recurrence of the backlogs on pig farms that caused so many problems earlier in the year.”

The changing consumer

The cost-of-living crisis has seen some dramatic changes in purchasing habits as consumers tighten their belts.

Soumya Nair, global consumer research and insights director at Kerry, told Food Manufacture that changes in purchase and consumption behaviour is accelerating faster than before.

“There is clear willingness to reprioritise their expenses yet keeping their focus sharp on proactive health and nutrition, mindful purchases and sustainability, and unwillingness to compromise on taste,” ​Nair elaborated.  

“We don’t anticipate a decrease in food and beverage spending, rather a reprioritisation of the basket; with focus shifting to at-home solutions that meet their needs on nutrition, health, and sustainability, without compromising on taste or breaking the bank.”

food and drink collage

Paul Graham, managing director of Britvic and current president of the British Soft Drinks Association, sustains that the industry needs to adapt.

Price conscious consumers are now making extraordinary changes to their buying habits – where they shop, what they buy, how often and how much,” ​he said.

“As an industry, we need to continuously adjust to the changing landscape we operate within and adapt to help customers still find the enjoyment in products and treat themselves from time to time, even if they’re on a constrained budget.”

BMPA’s Allen added that with the economy under severe pressure and households looking to cut down on spending 2023, it will see a continuation of the trend to buy cheaper cuts of meat like mince.

“Volumes of meat produced are down, but not by that much. The issue is more about the value of the product being sold. And, when spending power is under pressure, consumers seem less inclined to dabble with unfamiliar products. They tend to stick with what they know, and of course they know and understand exactly what meat can deliver,” ​he explained.

Ashby highlighted that the frozen food market attracted approximately 400,000 more shoppers during the pandemic, and he expects frozen food will remain a staple of many weekly shops.

While Lindsay believes that one of the biggest trends for food manufacturers will be a focus on delivering genuine value.

Out of home challenges

Rachel Dobson, managing director of hospitality buying special Lynx Purchasing, notes that uncertainty in the foodservice sector will continue to hit suppliers and manufacturers, especially in forecasting demand.

“There are reports that many hospitality businesses are planning to restrict their opening hours in the new year, due to higher operating costs, such as energy bills and lower consumer spend, which in turn means they will be reducing food and drink orders,”​ she stated.

“However, the consumer mood can change quickly, and it might only need a warm spell early in the spring, or some good news on the economic front, to see customers start returning to hospitality in significant numbers. At that point, food and drink suppliers would need to gear up their supply chains to deal with a sudden spike in orders, which could affect both the availability and price.”    


Mike Bagshaw, founder of flavour specialists ITS, predicts the key market drivers for the coming year will focus on ‘frugal indulgence’, as well as plant based, experiential eating.

“Frugal indulgence will be a key market trend in 2023,” ​he noted. “Although the cost-of-living crisis means that consumers will feel the pinch, it’s my view that they will be happy to splash out on an indulgent treat if they consider it to be value for money.”

Lindsay agreed: “And despite the economic challenges, consumers will still seek out moments of indulgence or a treat. Bakery products are sold at a relatively low price point and are thus much more accessible for all shoppers.”

Innovation in flavours

While the consumer purse is being tightened, innovation is still ongoing within the food and drink sector. And Paola Bassi, marketing director Europe, Synergy Flavours affirms there will be more innovation - especially in the savoury segment.

“This could include the incorporation of distinct, signature flavours; authentic dairy flavours, alcoholic profiles, or umami or kokumi boosters to food favourites,”​ Bassi has predicted.

“The popularity of smoky flavours is likely to increase and evolve with seared, blackened, Japanese BBQ, smoked seaweed, and caramelised notes just some examples of flavours we expect to see more of.”

She anticipates international cuisines and ingredients will continue to prosper, including spicy and complex flavours such as sansho pepper, habanero chilli, Szechuan pepper, rendang, sriracha and green Thai.

Synergy believes beverages are seeing similar trends with a growing interest in savoury drinks, often inspired by mixers, with flavours such as ginger and chilli.

Meanwhile Bagshaw envisages classic flavours remaining popular.

“For those manufacturers pushing the flavour boundaries in 2023, blood orange, blond chocolate, jalapeno and Biscoff will be big news,”​ he commented.

Health beneficial products

There is still a demand for healthy and functional food and drink products.

Frank Jaksch, CEO of Ayana Bio, the plant cell technology company, says the biggest change in 2023 is a trend that’s been on the upswing since the beginning of the pandemic: ‘food as medicine’.

“We’ll see more people avoiding high-sugar and high-sodium contents while reaching for preventative and health-beneficial products that contain natural plant-based ingredients that support stress, sleep, healthy aging, immune function and brain health,”​ he forecasted.  

“People tend to seek prevention and self-medicate during economic uncertainty (for example, the supplements market soared during the 2008 housing crisis and during the Covid-19 pandemic). Expect that trend to repeat in 2023.”


Despite the challenges of 2023, sustainability is to remain high on the agenda.

“The key challenge for food manufacturers is to champion sustainable sourcing but also keep costs down,” ​Bagshaw said.

Lindsay agrees, adding: “There is a widespread understanding within the food and drink industry that decarbonisation and reducing emissions is critically important – to both lessen our impact on the environment, but also as the only way of doing business in the decades to come.

“The provenance and sustainable qualities of raw materials is a growing purchasing consideration for shoppers, particularly ingredients such as palm oil and cocoa.”

While Graham highlights the implementation of the DRS scheme in Scotland in August 2023, which aims to tackle the issue of drinks bottles and recycling.

“Producer fees bring an additional cost which right now, just doesn’t seem sustainable,”​ he contended. We have come a long way and the entire industry wants the DRS to succeed, and it will be a test when it comes into force next August, but the government can utilise the learnings from Scotland, to capture and apply it to a UK-wide DRS as soon as possible.”

Meanwhile, BMPA’s Allen has a wish for 2023 on sustainability that would be to see all the different industry bodies in this country come together to agree a plan.

“Here in the UK all our key players: the levy boards, the assurance bodies and the major farming organisations are all working in isolation. If we don’t get more cooperation and cohesion, I fear we will fall further behind other countries and the UK food and farming industry will pay the price,” ​he concluded.   

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