Welcome to this week’s Food Exec Brief, a roundup of the most important news shaping food and beverage manufacturing, from M&A moves and regulatory shifts to tech innovation and sustainability trends.
Key takeaways:
- 🌱 Sustainability setback: Food industry quietly shelving climate commitments as costs soar and supply chain pressures mount, despite 33% of global emissions coming from food systems.
- 💰 Financial pressures: Hershey faces $170-180M in tariff expenses while 83% of Americans stress about grocery costs, forcing manufacturers into painful pricing decisions.
- 📈 Mixed performance: Tyson delivers fifth consecutive quarter of growth driven by chicken segment, while Utz shuts Michigan plant as part of $100M+ supply chain overhaul.
- 🤖 Technology evolution: AI agents emerge as scalable solution for consumer goods operations, while Mars partners with gene-editing firm to future-proof cocoa supply.
🌱 Sustainability and climate challenges
Food companies retreat from bold climate promises as economic pressures override environmental commitments.
Food industry backs away from sustainability promises
CPG executives increasingly admit “nobody cares about sustainability” as geopolitical instability, tariffs, and cost-of-living pressures force companies to prioritize immediate financial needs over long-term environmental commitments. Despite food systems contributing 33% of global greenhouse gas emissions, climate initiatives are becoming the first casualty of economic pressures, even as climate change directly drives commodity price increases in cocoa, olive oil, and rice.
Mars turns to gene editing to secure cocoa supply
Mars Inc. partnered with biotech company Pairwise to develop climate-resilient cacao plants using CRISPR gene-editing technology. The collaboration aims to create plants that can withstand disease, heat, and environmental stresses affecting West Africa, which supplies 70% of global cocoa. This follows cocoa prices reaching record highs of $12,000 per ton amid drought and plant disease pressures.
💰 Financial pressures and market dynamics
Tariffs and inflation create unprecedented cost pressures while consumer anxiety about food prices reaches critical levels.
Hershey braces for $170-180M tariff hit
Hershey expects to pay between $170-180 million in tariff expenses for 2025 while implementing double-digit price increases across its confection portfolio. The company’s Q2 net sales rose 26% to $2.7 billion, but gross profit declined as cocoa costs and tariff pressures mount. CEO Michele Buck emphasized protecting “key promotional events” like Halloween while seeking government exemptions for cocoa imports.
83% of Americans stressed about grocery costs
The vast majority of U.S. adults report at least some stress about grocery costs, with half calling it a “major” stressor. Lower-income Americans are particularly affected, with 64% of those earning under $30,000 citing groceries as a major stress source. About 40% of Americans under 45 now use “buy now, pay later” services for essentials including groceries, highlighting financial strain.
📈 Manufacturing performance and operations
Mixed results across food manufacturers as companies navigate operational challenges and pursue efficiency gains.
Tyson Foods delivers fifth consecutive quarter of growth
Tyson reported Q3 sales of $13.8 billion (up 4%) and adjusted EPS of $0.91 (up 5%), marking its fifth straight quarter of year-over-year growth. Chicken segment sales increased 3.5% with adjusted operating income up 12%, while Prepared Foods achieved 21% adjusted operating income growth. However, the Beef segment posted a $151 million adjusted operating loss amid record-low cattle availability.
Utz closes Michigan plant in supply chain overhaul
Utz Brands announced the closure of its Grand Rapids facility by early 2026, affecting 75 workers, as part of an ongoing supply chain transformation expected to save over $100 million. The closure reduces Utz’s manufacturing footprint from eight to seven plants, following several facility sales and shutdowns in recent years as manufacturers respond to inflation and margin pressures.
🤖 Technology and innovation
AI adoption accelerates as manufacturers seek operational efficiency and competitive advantage through scalable automation.
AI agents gain traction in consumer goods operations
Consumer goods companies are implementing AI agents that handle routine tasks autonomously, from customer service to retail execution and key account management. Early adopters report 50% faster customer support and significant improvements in data analysis speed. The technology promises to transform operations by automating complex workflows while freeing human teams for strategic activities.
The Food Exec Brief provides weekly insights for food and beverage manufacturing leaders and publishes every Friday. Want to get essential food industry news delivered to your inbox? Sign up for our weekly and daily newsletters.
