It's a busy time for the foodservice market with plenty of activity - encouraging, and not. Maureen Gahan, Global Foodservice Specialist for Bord Bia, interrogates the sector
This article was originally published in the Winter 2025 issue of Hospitality Ireland magazine, in December of 2025.
The findings from Bord Bia’s annual Irish Foodservice Market Insights report show that the Irish out-of-home sector increased by 5% in value and overall industry turnover reached a record €10.4 billion across both the Republic of Ireland and Northern Ireland. While this is the highest level seen within the industry to date, much of this increase has come about due to inflation and higher menu prices, driven by significant cost pressures in the sector.
As the challenges in the market continue, these findings and more were presented to over 300 foodservice industry experts at the Bord Bia Foodservice Seminar on 11 November in Johnstown House and Estate, Co. Meath.
The half-day event offered members of the industry the opportunity to tap into the best insights and learnings from experts in Irish and international markets, and to actively network and look at ways to collaborate. Panel discussions led by emcee Domini Kemp allowed attendees to hear directly from industry representatives, including Pat O’Sullivan, CEO, Master Chefs; Maxine Hyde, general manager, Ballymaloe Foods; Seán Ryan, foodservice account director, Kerry; and Jack Kirwan, co-founder and CEO, Sprout, who have used collaboration to benefit their businesses and communities.
Maureen Gahan, global foodservice specialist, Bord Bia, spoke to Hospitality Ireland about the findings and the outlook for the sector, as we look ahead to 2026.
What do you think is the most significant finding of the report?
The most significant finding is the fundamental shift in the Irish foodservice industry’s cost structure and profitability landscape. While the industry reached a record €10.4 billion, growth has slowed
considerably compared to previous years.
The sector’s resilience is evident, but the momentum seen post-pandemic has eroded, with inflation and rising labour costs now the primary drivers of increased turnover, rather than genuine volume growth.
Margin compression is widespread, and operators face a resetting of cost structures, with elevated input costs, especially labour, expected to remain above historic norms for the foreseeable future.
The report highlights that menu price inflation, up 26% since 2020, continues to outpace general inflation, making dining out increasingly unaffordable for many consumers, placing further pressure on
operators’ profitability.
What surprised you most within it?
The most surprising finding is the exceptional growth in the education sector, driven largely by the government’s hotmeal scheme for primary-level students.
Although coming from a low value baseline, within the Republic of Ireland, education foodservice grew by an extraordinary 60.8% in 2025, with operator purchases up 71.5%.
The scale and speed of this expansion, underpinned by €288 million in government investment, have made education the fastest-growing institutional channel, outpacing even commercial sectors.
Despite the fact there have been a number of documented challenges associated with the roll-out of the programme, this policy-driven growth is reshaping the institutional landscape and creating new opportunities for suppliers and operators with the expertise to deliver high-volume nutritious meals efficiently.
The other notable growth sector –although, again, coming from a low baseline value – is foodservice spend at sporting, music and other events. This sector has grown by 7.1%, year on year, reflecting the ongoing consumer demand for unique food experiences and our penchant for When we’re out, we’re out!
What is your sense of the next 12-18 months within the industry? What are the pinch points? What are the positives?
While the operating landscape will remain challenging, the outlook is not without opportunity. Profitability pressures from rising labour costs, persistent food inflation and limited pricing power continue to
weigh on operators, while flat footfall, [a] decline in tourism and an affordability crisis are dampening demand and driving consolidation. Yet, our research shows that businesses which clearly articulate their value proposition, execute consistently, and strategically target market share can still outperform.
The upcoming VAT reduction will offer some margin relief, and operators investing in technology, menu innovation, and value-led propositions are already seeing gains. Growth areas, such as the expanding education sector, further show that disciplined adaptation can deliver outperformance, even in a low-growth environment.
Looking ahead to 2026, we expect subdued but positive industry growth, with consumer spending forecast to rise by around 5%. Much of this uplift will be value led, as menu price inflation persists,
meaning real growth will remain modest.
Success will hinge on operational efficiency, innovation, and the ability to adapt to evolving consumer expectations and regulatory demands.
Bord Bia Foodservice Supports Bord Bia provides a range of ongoing supports to the Irish foodservice industry, including market updates and insights, networking and collaboration opportunities, and the annual Foodservice Directory, containing over 110 detailed profiles of foodservice operators and distributors.
The full 2025 Irish Foodservice Market Insights report is available on request. Please email thethinkinghouse@bordbia.ie.
