Food, beverage industry seen growing 5% in 2026

THE Philippine food and beverage manufacturing sector is projected to grow by about 5% this year, driven by the strong performance of leading manufacturers, the US Department of Agriculture (USDA) said.

In a report, the USDA’s Foreign Agricultural Service (FAS) in Manila said the industry’s growth will be supported by ongoing expansion in food manufacturing and government measures aimed at easing logistics and fuel costs.

“Local governments are easing logistics costs by suspending port and toll fees, subsidizing public transport drivers, monitoring fuel and consumer prices, and enforcing excise taxes on gasoline companies,” it said.

The FAS said food and beverage manufacturing sales are expected to rise despite higher electricity, logistics, and raw material costs, with leading manufacturers continuing to post solid performance.

However, the report said headwinds include rising production costs, food price inflation, and weaker remittances from overseas Filipino workers, which may constrain household budgets and dampen consumer spending.

The report noted that evolving consumer preferences are also shaping product development across the sector.

“Demand is growing for natural, wholesome ingredients, such as whole grains, nuts and seeds, legumes, and less processed, healthier snacks and beverages,” FAS said.

Products with high-protein claims, including milk and energy drinks, as well as those containing functional ingredients that deliver health benefits, are gaining traction among consumers, it added.

The FAS also said there is increasing interest in ingredients catering to specific dietary preferences, including low-sugar, vegan, plant-based, and non-dairy options.

Meanwhile, it said retailers are expanding private-label or house-brand offerings, including more products in larger, industrial-size formats suited for households and food service operators such as restaurants, hotels, and catering businesses. 

To remain competitive in the face of rising costs, manufacturers are also shifting to more cost-effective packaging formats to keep prices affordable and appeal to increasingly price-sensitive consumers, the report said. — Vonn Andrei E. Villamiel