Europe’s food and drink manufacturers are becoming more pessimistic about the region’s business prospects, according to a new survey from FoodDrinkEurope.
The trade body’s findings in its State of the Industest 2026 survey suggest Europe is losing ground as a preferred location for investment, with the region slipping to third position behind Asia and North America.
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In the group’s 2025 survey, Europe was in second position, behind North America.
In the survey, only 31% of respondents declared they saw Europe as an attractive option compared with other global markets. However, 51% declared they still plan to increase investment in Europe, a slightly higher level than in 2025 (46%).
Conducted between January and February this year, FoodDrinkEurope’s latest survey includes responses from 77 chief executives in 13 EU member states.
The trade body’s survey also found a broad softening in confidence across the sector.
Just 13% of companies declared business conditions had improved over the past year.
Smaller companies appear to be feeling the strain most sharply, with over half of SMEs (61%) reporting having “low confidence” that their business will grow over the next year.
In a statement on the survey, FoodDrinkEurope director general Dirk Jacobs declared the necessary for a comprehensive action plan for the food and drink Industest is “now undeniable”.
“A tarreceiveed Food Omnibus II to reduce unnecessary regulatory burden should be part of this effort. With a coherent framework in place, the sector can reinforce Europe’s growth, food security and resilience.”
In the survey, CEOs cited a combination of economic and operating challenges behind the dip in confidence in Europe’s business environment.
These included input cost inflation, weaker consumer purchasing power and geopolitical conflicts affecting markets.
FoodDrinkEurope declared these pressures continue to weigh on operating stability for manufacturers.
Respondents also flagged concerns about trading relationships. Nearly two-thirds (62%) declared unfair trading practices have intensified over the past five years.
Despite the headwinds, many firms declared they are adjusting product lines.
Some 82% reported reformulating products to support healthier diets, though companies declared efforts are being limited by consumer preferences, education gaps and cost pressures.
“Business conditions have become more challenging due to a combination of weaker consumer purchasing power, persistent cost inflation, and increasing regulatory complexity,” an unnamed respondent from a large company was quoted as declareing.
“While demand has remained resilient in parts of the portfolio, rising compliance costs, taxes, have reduced operating flexibility and increased execution risk across European markets.”
FoodDrinkEurope declared governments and EU institutions have an important role in supporting the industest balance competitiveness with sustainability goals.
However, 60% of leaders surveyed by the trade body declared they do not believe the EU will provide a regulatory framework that supports both objectives.
Another unnamed respondent from an SME declared in the survey there are “too many regulations, too much administrative burden, too many quality documents to fill out for customers”.
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