Europe Losing Investment Attractiveness for Food, Drink Producers, Says Survey

Why It Matters

The shift signals a potential reallocation of global F&B capital away from Europe, threatening the continent’s supply‑chain resilience and economic growth. It also pressures policymakers to address competitiveness and regulatory hurdles.

Key Takeaways

• Europe third for food & drink investment, behind Asia, NA
• Only 31% view Europe as attractive investment location
• 51% still plan to increase investment in Europe
• 61% SMEs report low confidence in growth next year
• Regulatory burden cited as major competitiveness obstacle

Pulse Analysis

Europe’s declining appeal to food and drink manufacturers reflects a broader realignment of global investment flows. While Asia’s rapid consumer market expansion and North America’s stable regulatory environment continue to attract capital, Europe’s perceived disadvantages—rising input costs, fragmented markets and lingering trade tensions—are eroding its competitive edge. The FoodDrinkEurope State of the Industry 2026 survey quantifies this shift, revealing that just under one‑third of senior executives consider the continent a prime investment destination, a stark drop from previous years.

The survey pinpoints three intertwined challenges that are reshaping executive outlooks. First, persistent cost‑inflation, driven by energy prices and raw‑material scarcity, squeezes margins and forces firms to reconsider expansion plans. Second, weakened consumer purchasing power across the EU dampens demand for premium and innovative products, prompting many companies to pivot toward cost‑effective reformulations. Third, an increasingly complex regulatory landscape—highlighted by 60% of leaders doubting EU support for balanced frameworks—adds compliance burdens that disproportionately affect SMEs, which already report the lowest confidence levels. Additionally, 62% of respondents note a rise in unfair trading practices, further complicating cross‑border operations.

Policymakers face a narrow window to reverse the trend. A targeted “Food Omnibus II” could streamline documentation, reduce redundant checks and align sustainability goals with commercial realities. By fostering a coherent, proportionate regulatory regime, Europe can restore investor confidence, sustain its food security agenda, and retain its manufacturing base. If decisive action is taken, the sector may stabilize, allowing firms to maintain growth trajectories while meeting evolving consumer expectations for healthier, sustainable products.