By Bob Grote, Chief Executive Officer, The Grote Company Family of Brands
Key Takeaways:
- Food processors are forging ahead with equipment investments despite economic challenges, influenced by trends in protein consumption and healthier eating. Flexibility and modularity are becoming more critical than large, fixed-line setups.
- The adoption of automation and AI is speeding up in specific areas like quality control and vision systems, though barriers such as ROI proof, food safety design, and skilled labor availability remain significant challenges.
- Customer centricity is emerging as a vital competitive differentiator in B2B equipment relationships, with processors choosing vendors based on service quality, not just products.
Reflecting on the first quarter of 2026, several pressing issues afflict food processors, shaping the industry’s future outlook.
1. Overall Economic Climate
In the United States, economic growth shows signs of resurgence as the food industry adapts to tariffs, and interest rates remain stable. Processors are increasingly investing in new or refined equipment.
In contrast, Europe faces sluggish economic growth, though areas of opportunity do exist.
The ongoing Iran War has led to rising fuel prices, which will likely translate to higher food costs. This scenario may motivate processors to invest based on the positive trends in protein consumption and healthier lifestyles, as waiting could risk losing market share to competitors.
2. Automation, Robotics, and AI Adoption
The topic of automation continues to be a key focus in the industry due to labor shortages affecting the ability to meet demand. The right level of automation can improve uptime, consistency, and adaptability.
Certain repetitive tasks, particularly in cold or wet conditions, are ideal for automation, enhancing efficiency and safety. For instance, decorating bakery items like cakes can maintain quality through robotic processes, ultimately saving time.
When it comes to AI, many customers hesitate to adopt new technologies without proven improvements to throughput. They often prefer to stick with established methods unless a clear ROI can be demonstrated.
Early adopters focus on internal efficiencies in equipment design and aspects like quality control, where AI and vision systems can validate and enhance food production. Early-stage applications assist significantly in identifying issues in the packaging process, saving valuable time and money.
As automation extends beyond simple handling to food contexts, designing equipment with food safety as a priority becomes paramount. Poorly designed or hard-to-clean machinery can escalate contamination risks.
Nonetheless, the current shortage of skilled technicians and engineers presents another challenge in the widespread adoption of automation; adequate maintenance plans must accompany technology installations.
3. Food Industry Trends: Protein and Healthier Eating
Growing interest in protein and healthier eating habits may be a driving force behind new equipment investments. Trends show a notable shift toward protein-enriched products, as exemplified by Doritos, which launched a new variant boasting 10 grams of protein per serving.
With the FDA’s updated definition of “healthy” taking effect, full compliance will be required by 2028. This may necessitate reformulations, impacting research and development, procurement, labeling, and marketing efforts.
Processors may need to think about flexible operations amidst unpredictable markets. Modular systems and retrofit options might provide the necessary adaptability.
4. The Age of Customer Centricity
In today’s B2B landscape, customers prefer relationships with vendors who cater to their needs. Client satisfaction drives referrals and retention, making experience paramount.
Despite advancements in automation, the human element in customer service remains essential. While some companies cut costs through automation, losing that personal touch could be detrimental.
Tailoring services—such as providing immediate support over phone calls instead of through online tickets—can make a significant impact on customer satisfaction.
5. Consolidation Among Suppliers
In an uncertain economic climate, many owners consider exit strategies, creating acquisition opportunities. Market fluctuations may compel owners to sell, leading to crucial decision-making scenarios regarding whether to continue navigating challenges or seek a suitable buyer.
Larger companies, especially agile, family-owned businesses, often serve as optimal acquirers who can preserve culture and jobs within smaller firms.
Food Processors Adjust and Move Forward
Despite persistent challenges, the food processing sector continues to adapt and innovate. As the fundamental necessity for food remains unwavering, new opportunities will continue to arise. By embracing change while prioritizing the human experience, we can further enhance our service to customers.
Bob Grote is the chief executive officer of the Grote Company Family of Brands. This includes Grote Company, PFI, Vanmark, ProFab, SPI Automation, and McCabe’s.
Grote became CEO in 2008 and now focuses on developing industry partnerships and seeking the latest food technologies. He has overseen eight acquisitions in 10 years and grown the Grote Company Family of Brands from a regional manufacturer into a global network with 11 locations.
