The Finnish food industry has developed steadily, but its growth remains sluggish. Urgent investments are required to maintain current production levels and support future growth. However, uncertainty about market developments, rising costs, and unpredictable regulations have delayed necessary investments.
According to a survey conducted by the Finnish Food and Drink Industries’ Federation (ETL) in September-October 2024, 70% of responding companies report a significant need for repair investments in the coming years. The survey included companies of various sizes and sectors within the food industry.
Companies in the sector need to make both maintenance investments and growth-oriented upgrades. These investments are essential for the industry to address future challenges and opportunities. For instance, developing a low-emission food chain and creating new products will require the implementation of these investments.
Investments Have Been Delayed
Although the need for investment has existed for some time, rising production costs and uncertainty about market and competitive conditions have delayed reforms. In addition, the unpredictability of the regulatory environment has prevented companies from making necessary updates.
ETL economist Bate Ismail emphasizes that companies need a predictable operating environment that fosters growth. Erratic and increasingly stringent regulations, along with tax policies affecting food and beverages, have made the future uncertain.
In any case, investments will be necessary in the coming years to maintain current production capacity. Growth-oriented investments, however, remain rare.
Profitability Gap Unlikely to Close This Year
The Finnish food industry is developing steadily, but profitability has yet to return to pre-cost increase levels. Revenue is expected to remain at last year’s level, approximately €14 billion, with production growing by less than 1%.
Exports and imports of food also remain at last year’s levels. However, there have been minor changes in the structure of exports. In 2024, Finland has exported more raw materials and low-processed products, such as oats, while importing more highly processed food products.
Ismail warns of certain risks in the European single market that could affect Finland’s food exports and imports. These risks include increasing trade policy tensions and the potential imposition of tariffs on food products.
