What can the UK food and drinks industry expect in 2025?

As the UK food and drinks industry braces for 2025, it finds itself at a pivotal point. With a drop in drink sales reported during the first week of January and mounting economic pressures, the sector must navigate shifting consumer behaviours, global trade uncertainties, and transformative trends. 

Yet, amid these challenges lie opportunities for innovation and resilience, offering a glimpse of what the future may hold for businesses prepared to adapt.  

Recent data from CGA by NIQ’s Daily Drinks Tracker highlighted a 9% year-on-year decline in drinks sales in managed venues during the first week of January 2025. This drop follows a strong festive season, with sales rising by 4% and 8% year-on-year in the last two weeks of 2024. 

Trading in the first full week of 2025 was negative across all seven days, with spirits suffering the steepest decline at 18%, compared to beer, cider, and wine, which fell by 7%, 8%, and 8%, respectively. 

Jon Calabrese, operations director at Clays Bar, views the 9% drop as a seasonal anomaly rather than a long-term trend. “The 9% drop in drink sales at the start of the year is not unusual and is more reflective of a seasonal pattern rather than a larger trend,” he explains. 

“Hospitality operates on an intense 24/7, 365-days-a-year cycle, and the 6-week period leading up to Christmas and New Year’s is particularly demanding. When January arrives, we shift from ‘feast to famine.’”

Calabrese attributes the slow start to January to factors such as post-holiday recovery, financial pressures, and the calendar’s unique positioning. “This year, New Year’s Eve fell midweek, creating a less cohesive celebration period compared to when it lands closer to or on a weekend,” he notes. “With NYE in the middle of the week, it disrupted this rhythm. People took longer breaks, leading to a delayed return to work routines and leisure spending.”

The broader economic landscape also plays a pivotal role in shaping the industry’s outlook. Jonathan Kleeman, wine consultant and hospitality operations specialist, highlights the impact of inflation on consumer spending. 

“With less money in people’s pockets, spending on luxury goods—including alcohol for many—has definitely shifted,” he says. “In previous years, there was a notable rise in people drinking less but spending more on higher-quality alcohol. But now, with inflation rising and many, especially in Europe, feeling the pinch, we’re seeing people cut back on these luxury alcoholic goods and opting for more affordable, regular options instead.”

Kleeman also points to broader cultural shifts, including declining alcohol consumption and the rise of alternatives like marijuana and psychedelics. “Fashion also plays a role. Right now, drinking isn’t as fashionable as it once was, but trends are cyclical,” he notes. Additionally, he highlights the growing influence of weight-loss drugs like Ozempic, which can reduce alcohol consumption. “As more people turn to these medications, not necessarily for health but for aesthetic reasons, it’s likely we’ll see further changes in drinking patterns.”

Ian Wright CBE, food and drink advocate, also emphasises the potential impact of Donald Trump’s return to the White House on the UK food and drinks sector. “If Trump imposes tariffs of potentially 10–20%, the big question is whether the UK will be targeted. During his first presidency, the UK was still a member of the European Union and, therefore, included as part of the EU. Now the UK is both more isolated and more precarious,” he warns.

The US is a key market for UK food and drink exports, with products like Scotch whisky, salmon, and cheese in high demand. Tariffs on these goods could squeeze UK exporters, potentially triggering retaliatory measures from the UK government. 

Wright also notes the potential ripple effects of Trump’s policies on NATO spending and relations with China. “It’s not all bleak. Certain sectors, like baby milk, might find unexpected opportunities. Where there are no major US producers, UK brands could step in, filling gaps and thriving despite the storm,” he adds.

The positives

Despite the challenges, there are opportunities for the UK food and drinks industry to adapt and thrive. Calabrese highlights the importance of focusing on quality and value, creating flexible pricing models, and enhancing the guest experience. “Guests are willing to pay for premium experiences, but the value must extend beyond price,” he says. “For example, drinks sales improve when paired with an immersive or social activity.”

Technology will also help play a crucial role in shaping the future of the food and drinks sector. Calabrese sees opportunities in intelligent cross-selling and upselling, leveraging pre-booked data for predictive insights, and advanced inventory management. “AI-powered systems can ensure the right offer is presented at the right time, increasing average spend per head,” he says. “I expect as we are already seeing technology will enable businesses to track inventory in real time, reducing waste and ensuring popular items are always in stock.”

The growing focus on health and wellness is another critical trend. Calabrese emphasises the rising popularity of low- and no-alcohol beverages and plant-based dining. “These options are no longer a niche category but a growing expectation,” he notes. “Guests won’t return for a menu that ticks the boxes on paper but falls flat in practice. These offerings must be thoughtfully curated.”

In a volatile global trading environment, Wright urges UK businesses to focus on resilience. “Uncertainty is the new norm, and the old US-led world order is no longer a reliable truth,” he asserts. “Businesses must improve resilience, spread their exposures, and review their supply chains and critical dependencies to ensure they are not exposed to significant shifts in policy or political positions.”

From seasonal sales fluctuations and economic pressures to geopolitical shifts and cultural changes, the sector must adapt to thrive. At the same time, the sector continues to evolve resiliently, and Calabrese encourages customers to foster that sense of community which is at the heart of every hospitality business. “I’m particularly concerned for smaller, traditional food and beverage businesses. There’s always a place for them, and we truly appreciate them. If there’s an F&B spot in your local community that you love and can afford to support, do so when you can, because it could make the difference between losing those cherished places or not,” he shares.