How the food and beverage industry is rethinking manufacturing investments

Food and beverage companies are shifting their manufacturing strategies toward cost efficiency and modernization as they navigate a period of fluctuating sales and evolving consumer demand. While project activity saw a significant 26% decline in 2025, recent investments are rebounding to support high-growth categories like dairy, high-protein foods, and snacking. This trend reflects a broader industry move to replace aging infrastructure with high-efficiency facilities to protect margins while pursuing targeted innovation.

Manufacturing investments in the food and beverage sector reached a notable low in May 2025, with only 48 projects announced according to data from Industrial SalesLeads. This followed a year where planned project activity dropped by 26% compared to 2024 levels as companies prioritized cost efficiency. Despite this contraction, the industry is seeing a resurgence in specific high-demand sectors. Companies like Danone and Chobani are increasing production capacity for high-protein dairy products, while Ferrara is investing $675 million in a new 750,000-square-foot facility to capitalize on the success of its Nerds Gummy Clusters brand.

A significant portion of current capital expenditure is being directed toward modernizing existing infrastructure rather than just building new sites. In March, renovations accounted for half of all planned manufacturing investments as companies like Campbell's and Smithfield sought to replace aging plants with more efficient operations. For example, Smithfield is replacing a century-old facility in South Dakota with a new plant designed for packaged meats that promises significant efficiency gains. Similarly, Anheuser-Busch is pursuing its Brewing Futures initiative to improve facilities and workforce commitments across its domestic footprint, while Sensient is transitioning away from artificial dyes in what its CEO calls the largest opportunity in the company's history.

Large-scale investments from industry giants highlight a strategic focus on coffee, snacking, and dairy. Nestlé has announced more than $2 billion in manufacturing projects over the past year to support its coffee, creamer, and yogurt brands. Mars is expanding its snacking operations, a move expected to create 600 jobs following its $36 billion acquisition of Kellanova. Other notable expansions include Coca-Cola’s Fairlife brand in Michigan and Conagra’s increased chicken production capacity. These investments come as CPG executives report that shoppers have not returned at expected rates, forcing a dual focus on price rollbacks and manufacturing innovation to rejuvenate growth.