Changing Landscape for Food & Beverage Incumbents
Digging deeper on the trends & startups leading the charge in 2025
2025 Challenges
Reformulation efforts are accelerating as brands navigate global supply chain disruptions, rising ingredient regulations, and shifting tariff policies.
Evolving demographics are driving demand for more diverse, functional, and culturally resonant foods.
As the debate around ultra-processed foods (UPFs) intensifies, brands are under pressure to provide cleaner, more transparent ingredient lists.
Corporate organizations continue to operate with lower R&D budgets, looking to external innovation.
News & Regulation Landscape
Uncertainty around U.S. trade relations is prompting companies to diversify sourcing strategies. Brands that are reevaluating global sourcing must balance the growing consumer demand for global flavors and authenticity.
The convergence of pharma and food is pushing brands to explore functional ingredients from global traditions—like adaptogens, fermented foods, and ancient grains – to appeal to health conscious and curious consumers.
This scrutiny is opening the door for novel processing technologies and ingredient swaps that align with clean label expectations to reimagine global food staples.
Food and beverage M&A is showing resiliency in 2025 through strategic acquisitions, driven by the need for portfolio optimization
Despite the fourth consecutive year of decreased VC funding, valuations of venture-stage F&B companies are at an all-time high.
Emerging Tech Growth Areas
Global Flavors & Supply Chains
Emerging food and beverage brands are building agile supply chains around lesser-commercialized regional ingredients, in turn generating demand through their products. As consumers scrutinize labels and ingredient origins, these brands develop trust through transparency and authenticity. Founders are increasingly using their personal narratives to create fusion flavor profiles that reflect their heritage— resonating with today’s consumers.
Personalized Nutrition
Consumers on GLP-1 medications and aging populations are gravitating toward smaller portions and nutrient-dense options, creating new opportunities for globally inspired single-serve and frozen formats—categories that have historically led innovation in global flavors. AI-powered nutrition platforms are emerging to help consumers personalize their diets, including recommendations for global cuisines that align with specific health goals. Brands are responding by incorporating functional global ingredients into products tailored for special diets, toddler nutrition, and performance beverages. This convergence of health, tech, and internationalism is reshaping how consumers engage with food as a tool for wellness.
Private Label Innovation
Private label sales in the U.S. reached a record $270.6 billion in 2025, growing nearly four times faster than national brands, driven by consumers trading down from restaurants while still seeking diverse cuisines at home. Gen Z, in particular, is fuelling demand for Asian and Latin flavors in grocery aisles, prompting retailers to rapidly develop culturally relevant, clean-label offerings. This shift reflects a broader industry trend toward flavor personalization, ingredient diversity, and global storytelling—where private label is no longer just a value play.
M&A Landscape: Global Flavors (CPG)
M&A investment dollars reach highest point since 2021 peak, with valuations rising for third consecutive year.
Disclaimer
Rabobank is not acting as a broker or dealer and no information in this document is intended to be an endorsement of any startup or a recommendation by Rabobank as to the advisability of entering into any transaction or investment. Nothing in this document is intended to constitute an offer or solicitation to purchase or invest in securities.