By Matthew Brown, CEO of Wherefour Inc.
Key Takeaways:
- Food and beverage manufacturers are scaling back on investments in 2026; only 28% plan to increase spending compared to 52% last year. The focus is now on optimization rather than new technologies.
- Compliance management is improving, with 88% of companies handling it internally or via software; however, just 11% have truly streamlined processes.
- Artificial Intelligence adoption is slow, with 65% of manufacturers not using it at all due to concerns about data security and inadequate digital infrastructure.
As we enter 2026, many food and beverage manufacturers exhibit a tempered confidence, reflecting a more disciplined approach to operations, compliance, and execution. Insights from Wherefour’s 2026 State of Manufacturing report highlight this evolution, drawn from a comprehensive survey conducted in December 2025.
Prioritizing In-House Production
The study reveals that 85% of food and beverage manufacturers are prioritizing in-house production as their primary method, in contrast to 79% across the broader manufacturing sector. This preference stems from the desire for greater operational control amidst stringent regulatory oversight from the FDA, USDA, and FSMA.
Challenges in Inventory and Scheduling
Staffing shortages continue to challenge food and beverage operations, particularly in inventory management and production scheduling—identified by 44% and 33% of respondents as their main operational bottlenecks respectively.
Investment Reassessment
Notably, investment sentiment has become more circumspect. Only 28% of manufacturers plan to boost spending in 2026, down from 52% the previous year. Manufacturers are now directing funds to areas that exert the most operational impact, with 35% focusing on equipment and hardware over technology and staffing.
Evolving Perspectives on Tariffs
In 2026, manufacturers report a lessened impact from tariffs, with 38% indicating only a minor effect. Those with domestic supply chains report minimal disruptions, whereas businesses dependent on imported materials face ongoing pressures.
Advancing Compliance Management
The report highlights that 33% of manufacturers now have dedicated compliance managers, with a substantial 88% managing compliance internally or via software, demonstrating significant growth since 2025.
Software Usage and Integration Gaps
Software adoption remains robust but reveals gaps in integration. While 78% of manufacturers utilize inventory or production software, satisfaction is mixed, and 45% continue to rely on manual forecasting methods.
Cautious Adoption of AI
Despite the buzz surrounding AI, adoption is limited, with 65% of manufacturers not utilizing it due to data security concerns. Only 1% report full AI integration into their operations.
Optimism Amidst Challenges
Overall, confidence in the industry remains strong, with 51% of manufacturers expressing cautious optimism for the year ahead. Those who focus on optimizing their operational control and compliance will likely outperform their competitors in 2026.
Matthew Brown is the Founder and CEO of Wherefour Inc., specializing in traceability and production management for process manufacturing. An entrepreneur since the age of 15, he holds a B.S. in business from the University of Colorado and an MBA from the University of Denver.
