Food manufacturers are upgrading existing plants instead of building new ones

Food Engineering's State of Food Manufacturing in 2026 cites the 2026 Processing State of the Industry Report, which PMMI and the Food Production Solutions Association (FPSA) produced together as a joint research project. According to that report, orders for new equipment are running ahead of construction of new facilities.

Put simply, this year's big capital projects are happening inside walls that already exist. For the plant engineering lead or VP of operations holding the capex list, that means the new line has to fit around a running operation and a crew that's already stretched. It also has to be ready for rules that take effect before the equipment is anywhere near paid off.

Machinery spending outruns construction

PMMI's 2026 Packaging State of the Industry Report gives a sense of the money involved. It valued the US packaging machinery market at $11.7 billion in 2025, with food machinery at $5.1 billion, or roughly 44%. PMMI projects food machinery shipments will reach $7.1 billion by 2031.

The joint processing report from PMMI and FPSA ties hesitation over new plants to economic uncertainty and an aversion to risk. It also cites borrowing conditions that are unfavorable and a shortage of the skilled labor that new plants would need.

Food Engineering describes the wider backdrop as tightening regulations, rising costs and deepening concerns about labor availability, all pushing manufacturers to run as efficiently and safely as possible. The magazine's own verdict on that goal: often easier said than done. Each of those pressures lands harder on a greenfield project, which has to finance a building and staff it from scratch, than on a line dropped into a plant that already has a crew.

FPSA President and CEO Chris Lyons told Food Engineering the pattern points to near-term caution, with tariffs, inflation and skills shortages all weighing on decisions. He expects spending to stay on brownfield upgrades, line expansions and targeted modernization for now. He also expects construction to catch up eventually. So the preference for retrofits looks like a phase of the cycle. Nobody in the report is declaring the end of new plant construction.

Why a new line wins approval first

David Pelyhes, a business partner at JPG Resources, offered Food Engineering a simple reason capacity expansion gets through finance more easily: it's easier to show a quick return, especially on automation and safety upgrades. In his view, a new line is a chance to build in the line integration and automation that would cut cost of goods sold but can't be retrofitted onto the old line.

The same logic applies to cleaning. Pelyhes said manufacturers can design out the hygienic design problems of the existing line, and that shorter sanitation can show up in cost of goods. Sanitation hours are hours the line isn't making product. That turns hygienic design into a cost argument as well as a safety one, and cost arguments are the ones that get capex approved.

Food safety is getting more weight in those decisions too. As major food safety incidents keep surfacing, Food Engineering reports, sanitation, hygienic design and traceability are now at the front of conversations about equipment purchasing and plant and process design. Nolan Lewin, executive director of Rutgers University's Food Innovation Center, said the companies he works with treat food safety as a higher priority than they used to. "Companies are stressing food safety, and they're trying to make strides," he said.

Earnings and shelf prices put payback first

The earnings of some of the largest processors give that quick-return test real context. Food Processing's 51st annual Top 100 list, which ranks companies by 2025 or most recent fiscal-year sales of goods processed in US and Canadian plants, shows Kraft Heinz, General Mills and Conagra Brands each moving from net income in the prior year to a net loss. J.M. Smucker posted losses in both years. Hershey's net income fell by more than half, and Mondelez's by nearly half.

The pressure isn't universal. PepsiCo, Tyson Foods, JBS USA and Nestle still hold the top four spots by US and Canadian sales, and net income rose at Coca-Cola, Keurig Dr Pepper and JBS USA. Still, at companies whose earnings look like the first group's, a project that proves a quick return would likely be easier to defend than a multi-year greenfield bet.

Pricing offers little extra cushion. USDA's Economic Research Service, whose September 2026 Food Price Outlook incorporates August consumer and producer price data, shows grocery prices rising more slowly than prices across the economy.

Grocery prices are a consumer-side measure, but an index running more than a point below overall inflation suggests manufacturers have limited room to recover rising costs at the shelf. That's the condition in which a COGS reduction, whether from automation or shorter sanitation, becomes the most persuasive line in a capex request.

The view past this year is looser still. ERS forecasts food-at-home prices rising 1.8% in 2027, with an interval from -5.0% to 9.2%. Its forecasts come from statistical models fitted to recent trends, so that width is a fair signal of how little a multi-year payback model should lean on a price assumption.

More robots in plants that are still hiring

BLS projected in a July 1 Economics Daily release that, over the 2024 to 2034 decade, food and beverage manufacturing will add more jobs than any other manufacturing industry. The sector employed roughly 1.7 million people in 2014. By 2024 that number had reached about 2.1 million, and BLS expects it to top 2.2 million in 2034. In 2024 the sector already accounted for 16% of all US manufacturing workers, the largest share among the 20 manufacturing industries.

The longer series shows how recent that run is. Employment hovered between about 1.62 million and 1.66 million from 2004 through 2013, bottoming at 1,617,500 in 2010, then climbed in most years after, apart from a dip to 1,878,800 in 2020 from 1,919,400 in 2019. The sector added roughly 419,000 jobs from 2014 to 2024, reaching 2,100,600. The 2034 projection of 2,230,900 implies about 130,000 more.

So the workforce keeps growing, but at roughly a third of the previous decade's pace. If demand for output grows faster than that, more of the gap could fall to equipment rather than headcount.

Taken together, the two forecasts suggest food manufacturers are buying automation to get more out of a workforce that is still growing and still hard to staff.

Across the 10 industries BLS tracks within food and beverage manufacturing, the growth is uneven. Beverage manufacturing leads with a projected 37,800 new jobs, and animal slaughtering and processing follows at 35,400. The middle of the pack includes bakeries and tortilla manufacturing (18,800), other food manufacturing (21,900) and dairy (10,800). Three segments stay roughly flat: fruit and vegetable preserving and specialty food (-1,200), seafood (-800) and grain and oilseed milling (+300).

For operators in beverage and protein, competition for line workers could be sharpest, and that's where the business case for labor-saving equipment would likely be strongest. In the flat subsectors, automation probably has to justify itself on throughput, consistency or sanitation time, since headcount pressure is weaker. Bakery and dairy plants, in the middle of the table, may need to make both arguments at once.

One limit on the BLS figures: the agency projects only the 2034 endpoint and doesn't publish estimates for 2025 through 2033. So the projection says where employment ends up, but not how tight hiring will be in any given year of a five-year capex plan.

When construction catches up

The thing to watch is the gap between equipment orders and new construction in next year's PMMI and FPSA processing report. If construction starts closing that gap, as Lyons expects, greenfield projects will compete again for the same engineering teams and equipment slots. If the gap holds, that suggests investment will keep going into existing plants as manufacturers prepare for FSMA 204 requirements in 2028.