Spending is holding across food and beverage, but rising fuel costs and supply chain pressures
Appetite among food and beverage consumers is holding, with spending largely up, year on year.
However, with cost-of-living pressures colliding with the Middle East crisis, which is sending fuel prices skyrocketing, many food and beverage retailers and brands are bracing for price rises.
“It’s too early to understand the full impact [of the Middle East conflict],”
Colm Maguire, CEO of the Australian Food & Grocery Council
“It’s too early to understand the full impact [of the Middle East conflict],” says Colm Maguire, CEO of the Australian Food & Grocery Council.
“Businesses have shown extraordinary resilience over the past few years, but they’re still navigating significant cost pressures across energy, labour and logistics.”
Across the hospitality industry, sentiment is mixed, says Laura Box, editor of Hospitality Magazine. “Venues are definitely feeling the pinch as costs have gone up across the board, from rent and wages to produce, licences and energy, and margins are extremely tight.
“We’re seeing diners still spending, but they’re being more conservative about how they do it. Where guests might order an entrée, main course, dessert, and a bottle of wine, maybe now, they skip dessert, don’t buy wine, or just have one glass.”
Numbers to know
Explore trends from fibre-maxxing to functional foods.
US$30 billion
The growth in the “functional foods” market in 20261
From prebiotic drinks to protein, brands are racing to launch products fortified with nutrients. The global functional food market is expected to grow from US$310.7 billion in 2025 to US$341 billion in 2026 alone.
150m
The number of views #fibremaxxing has generated on TikTok2
It’s the social media trend both Gen Z and dietitians can agree on, as fibre-rich foods like beans, chia seed and kiwi fruit jostle with protein for the spotlight. Fibre improves gut health and has been linked to lowering the risk of serious health conditions, but only 28 per cent of Australians eat the recommended amount.
$5.2billion - the value of the Australian ready-meal market by 20353
Blame time-poor consumers and a growing hunger for convenience, but the ready-meal market is soaring. To get in on the action, many QSR chains are launching restaurant-at-home products. In 2025, Grill’d launched retail burger patties through Coles, for example, while Zeus Street Greek launched a 15-product range at Woolworths, to help consumers recreate Zeus dishes at home.
trends
Mini everything
Small is having a big moment. From Ladurée's bite-sized macarons to Milk Bar's mini layer cakes and Magnolia Bakery's two-bite banana pudding cups, the most talked-about treats right now have one thing in common: they're tiny. For some, it’s all about playful indulgence, but for others it’s a way to access premium experiences, minus the price tag.
Then there’s the GLP-1 effect. Medications like Mounjaro and Wegovy are quietly shifting appetites - and it’s estimated that almost one in 10 Australians will be on the meds by 20304. Restaurants are already rewriting menus around it with snack formats, tasting plates and scaled-down desserts that cater to smaller appetites. Major US chain Olive Garden launched a dedicated "Lighter Portions" menu section nationwide in January, while over in the UK supermarket Morrisons rolled out a 53-product GLP-1-friendly range the same month. Even fine dining is getting the memo: Manhattan’s Tucci now lets diners order meatballs by the one or three.
Texture is the new flavour
Forget taste, the new frontier is how it feels. The chew of mochi, the pop of bubble tea pearls, the wobble of a gelatinous dessert: Gen Z and Millennial consumers are increasingly drawn to sensory play in their food and drinks, and Asian sweet traditions are leading the charge. Take “Q”, a springy, elastic texture found in sweets like kueh, which is going global as adventurous palates seek ever more tactile eating experiences. Over on Pinterest, searches for yokan (Japanese red-bean jelly) are up 60 per cent while hunts for agar-agar (similar to gelatin, but plant based) are up 35 per cent5.
Drinks are getting the same treatment: foams, jellies, gels and gelatin-based add-ons mean your favourite beverage now comes layered. At Starbucks, drinks topped with cold foam grew 23 per cent year-on-year, proof that texture is here in a big way.
The cabbage comeback
Once the wallflower of the produce aisle, cabbage is enjoying a moment in the sun it hasn’t had since WWII, appearing in everything from dumplings and sauces to reinvented pasta dishes and even kim-chi cocktails. Pinterest searches for "cabbage dumplings" are up 110%, "golumpki soup" up 95% and "cabbage Alfredo" up 45%. Apparently, familiar is just as good as fancy when you’re living through global volatility6.
The broader trend makes sense: with food costs biting, people are getting creative with the cheap stuff and turning to grandma’s recipes for inspiration. Cabbage is joined by potatoes and eggs in the shopping list of humble ingredients that are giving austerity cooking some new ambition - even canned fish is getting a makeover, pushed by “tinfluencers” who espouse the joys of sardines and mackerel (online chat around tinned fish has climbed 30%) with brands like LA-based Fishwife turning tuna tins into a pantry status symbol.
Flavour drops
Macaroni-cheese ice cream. Mustard-flavoured Skittles. Cheesy-jalapeno hot cross buns. Supermarkets and food brands are increasingly turning to intentionally controversial flavours to spark social media debate – and drive sales.
This Easter, Coles partnered with Dorito’s to create a cheesy, spicy hot cross bun – the latest in a growing wave of headline-grabbing flavour collaborations. The strategy is simple: create something unusual enough to generate media coverage, online discussion and curiosity purchases. Counterintuitive as some of these combos may seem, they can drive strong sales. In the US, ice cream brand Van Leeuwen (ice cream) launched a limited-edition collaboration with Kraft Mac & Cheese which sold out on its first day. The brand has since brought the flavour back three times.
Sources: 1 Grandview Research 2 BBC 3 Expert market Research 4 Medical Republic 5 Pinterest Business Reports 6 Pinterest Business Reports
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