As the 2024 U.S. presidential election draws near, companies in the food and beverage industry should begin scenario planning to prepare for potential political shifts. The policies of the next administration will significantly impact the industry in 2025, presenting both challenges and opportunities.
Kamala Harris’ platform emphasizes labor rights, sustainability, and public health, offering pathways for innovation but also posing potential regulatory hurdles for manufacturers, especially those with tighter margins. On the other hand, Donald Trump’s focus on deregulation, tax cuts, and cheaper energy aims to reduce costs but could introduce risks tied to labor and trade policies. Understanding these differing approaches is crucial for businesses to navigate the evolving landscape.
Key areas worth paying attention to in the Food and Beverage Industry
- Food Pricing and Inflation: In recent years, food prices have surged due to supply chain disruptions, labor shortages, transportation costs and energy costs. In 2025, managing inflation will be a priority, with candidates proposing different solutions. Kamala Harris’ policies focus on combating price gouging and increasing regulatory oversight in the food supply chain, particularly in sectors like meat processing, where monopolistic practices have led to inflated prices. Her focus on antitrust enforcement could bring down food prices in the long term by fostering competition. However, tighter regulations could increase compliance costs for large corporations, potentially raising operational costs in the short term. Donald Trump takes a different stance, emphasizing deregulation to reduce costs for food producers. His strategy includes rolling back environmental regulations and lowering energy costs, which he argues would reduce production costs and help stabilize food prices. He has also highlighted energy costs as a key factor in food price inflation, advocating for increased domestic oil production to lower fuel costs.
- Food Security and Accessibility: Access to affordable, nutritious food, particularly for low-income families, will be crucial issue to address. Harris has supported initiatives aimed at improving public health and nutrition. Food manufacturers that produce healthier or plant-based products could benefit from policies that encourage innovation in these areas while Trump leans on broader economic recovery policies to address affordability of healthier options.
- Labor Shortages: Labor shortages continue to be prevalent in the industry, particularly in processing plants and lower-wage jobs. Immigration policies will play a significant role in addressing these shortages. The next administration’s stance on immigration reform and labor rights will directly impact staffing levels in the industry. Harris advocates raising federal minimum wage, improving workers’ rights and vocational training programs and workplace development. Trump’s stricter immigration policies could exacerbate labor shortages, particularly in agriculture and food processing sectors that rely heavily on migrant labor. However, his focus on reducing labor regulations could make it easier and cheaper for manufacturers to hire workers domestically.
- Climate Change and Sustainable Practices: Both consumers and regulators are increasingly demanding sustainable practices from food producers calling for reduced carbon emissions, less reliance on single-use plastics, and more sustainable sourcing of raw materials. Harris supports policies that encourage businesses to shift to renewable, clean energy sources which could impose stricter environmental requirements for the industry. Trump, on the other hand, favors reducing environmental regulations to lower operational costs.
- Trade and Tariffs: International trade remains a significant concern. Trump plans to reinstate or increase tariffs on imports, particularly targeting China. While this could benefit some U.S. producers, it could hurt others, especially exporters of agricultural goods who rely on international markets like soybeans and pork. Retaliatory tariffs from other countries could lead to price increases for consumers and disruptions in the supply chain. Harris’ trade policies emphasize fair labor and environmental practices. While this could protect U.S. manufacturers from unfair competition with countries that have lower standards, it may also limit access to cheaper imports of raw materials and food ingredients increasing production costs for food manufacturers.
- Supply Chain Resilience: Building more resilient supply chains that can withstand future disruptions—whether due to pandemics, geopolitical conflicts, or climate change—continues to be a critical challenge. Policy decisions, such as promoting domestic manufacturing and reducing reliance on imports, will influence this. A new administration might prioritize infrastructure investment, which could improve logistics and reduce transportation costs for the industry. Conversely, disruptions to international trade relationships, due to shifts in foreign policy, could cause volatility in global supply chains, especially for imported goods. Trump’s policies are centered around reducing dependence on foreign suppliers and increasing domestic production capacity while Harris’ policies reflect a broader, more integrated approach that considers infrastructure, technology, labor rights and sustainability.
- Food Safety and Regulation: Ensuring food safety will remain a top priority, with concerns about contamination, foodborne illnesses, and the integrity of the supply chain. Harris may push for more stringent safety regulations particularly around contamination prevention, labeling, and traceability. This could lead to higher compliance costs but also reduce risks of foodborne illnesses, protecting brand reputation. Trump would likely roll back regulations to reduce compliance costs for manufacturers. However, this could increase the risk of safety issues, which might negatively affect consumer confidence and brand integrity.
- Health and Nutrition Trends: Public health concerns over obesity, diabetes, and heart disease continue to influence the industry. There is growing demand for healthier food options, plant-based alternatives, and reduced sugar content. Harris advocates for stricter food labeling laws and a push for manufacturers to offer healthier product options, which could require reformulations and additional R&D costs. However, this would also align with consumer trends toward health-conscious eating. Trump is likely to prioritize deregulation, which could reduce the burden on manufacturers to reformulate products or comply with new health-focused regulations. However, manufacturers might still face market pressure to adapt to shifting consumer preferences towards healthier and more natural products.
- Technological Innovations: Advancements in food tech—such as lab-grown meat, precision fermentation, and AI-driven food production—will continue to disrupt the industry. Regulatory clarity around these innovations will be key. Harris may push for more oversight, while Trump’s administration might prioritize fostering a more innovation-friendly regulatory environment. Harris may promote investment in advanced manufacturing technologies, especially those that align with climate goals and job creation. Manufacturers may benefit from federal funding or tax incentives for adopting automation and AI solutions that improve efficiency. Trump’s emphasis on deregulation and reducing taxes on businesses could make it easier for companies to invest in automation and robotics, especially if they want to mitigate labor shortages. However, this approach may prioritize short-term cost reductions over sustainable technology investments.
In 2025, the food and beverage industry will face a complex landscape shaped by economic, social, and environmental challenges. The next administration’s policies on regulation, trade, and sustainability will play a critical role in determining how these issues evolve.
Interested in learning how the election may impact the M&D industry as a whole? Check out part 1 of our upcoming election series: “The Potential Impact of the 2024 Election on the Manufacturing and Distribution Industry.” And if you need further guidance or have any questions on this topic, we are here to help. Please do not hesitate to reach out to discuss your specific situation.
This material has been prepared for general, informational purposes only and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. Should you require any such advice, please contact us directly. The information contained herein does not create, and your review or use of the information does not constitute, an accountant-client relationship.
