What do H1 2026 results reveal about where F&B growth is shifting?

Recent H1 and Q2 results from companies across the F&B value chain reveal an increasingly divided market. Health-focused products and formulation-led ingredient solutions are generating growth. However, several commodity and mainstream portfolios faced lower prices, weaker demand or volumes, and cautious consumer spending.

The results suggest that value is increasingly concentrated in products offering clear nutritional, sensory, or functional benefits. At the same time, food manufacturers are under growing pressure to improve affordability without compromising taste, texture, or product quality.

Food Ingredients First examines the common themes emerging from the latest earnings season and what they could mean for ingredient suppliers during the remainder of 2026.

Value-added solutions pull ahead

The divide between specialized and commodity ingredients was particularly visible at Arla Foods. Arla Foods Ingredients’ revenue rose 19.3% year over year (YoY) to €867 million (US$1.01 billion), supported by higher whey protein prices and sustained nutrition demand, including demand associated with GLP-1 medication use.

Value-added ingredient volumes increased 5.7% YoY, while their share of the division’s business reached 84.6%, compared with 82.9% in H1 2025. This contrasted with Arla’s Global Industry Sales business, where revenue fell 7% YoY as weaker butter, milk powder, and cheese prices weighed on performance.

Ingredion reported a similar divergence. Volumes in its Texture & Healthful Solutions division increased 7% YoY, marking a ninth consecutive quarter of growth. Meanwhile, volumes in its US and Canadian Food & Industrial Ingredients business fell 4% YoY amid softer F&B demand and operational disruption.

The performance indicates that manufacturers continue investing in clean label, texture, nutrition, and product-performance solutions, even as demand remains subdued for traditional, high-volume ingredients.Value-added ingredients are outperforming several core and commodity-focused businesses.

Taste and sensory ingredients also performed strongly. ADM’s Nutrition segment operating profit rose 51% YoY to US$172 million, supported by Flavors and improvements across Human and Animal Nutrition.

Meanwhile, dsm-firmenich’s Taste, Texture & Health sales grew 6% YoY on a like-for-like basis in Q2, accelerating from 2% YoY in Q1. The performance was supported by beverages, baking, dairy, and revenue synergies.

Symrise also reported strong demand for savory and natural solutions, both of which achieved high-single-digit organic sales growth YoY during Q2.

Together, the results suggest that formulation expertise remains a relatively protected area of investment. Manufacturers are still looking for solutions that can support reformulation, distinguish products, and respond to changing health and wellness expectations.

Functionality enters everyday products

Health-focused innovation was not confined to specialist nutrition companies. Several major manufacturers are incorporating protein, fiber, hydration, digestive health, and immune support into familiar products and mainstream consumption occasions.

Danone delivered Q2 like-for-like sales growth of 4.2% YoY, comprising a 1.9-percentage-point contribution from volume and mix and 2.3 points from pricing. The company highlighted continued momentum for high-protein products, medical nutrition, Skyr, Kefir, and plant-based offerings.

Kraft Heinz increased its H1 R&D spending by 22% YoY, despite reporting weaker sales and volumes. Its recent innovations include PowerMac, which contains 17 g of protein and 6 g of fiber per serving, alongside Capri Sun Hydrate and Philadelphia Lactose Free.

Kirin is similarly expanding its LC-Plasma postbiotic into everyday beverages and foodservice formats. The company is positioning the ingredient around familiar fruit flavors, refreshment, and hydration rather than limiting it to specialist immune-support products.

However, Kirin’s results also show that investment in health innovation can coincide with pressure elsewhere in the portfolio. Kirin Beverage’s H1 revenue declined 2.8% YoY, while normalized operating profit fell 30.2% YoY amid lower volumes, higher input and processing costs, and increased promotional spending.

The broader trend is toward delivering functionality through products consumers already recognize. For ingredient suppliers, this increases demand for solutions that can add nutritional value without disrupting taste, texture, price, or established brand positioning.

Consumers weigh price against value

Consumer demand remained resilient in several established categories, but the results also exposed the limitations of relying heavily on pricing.

Nestlé achieved H1 organic sales growth of 3.6% YoY, comprising a 2.1-percentage-point contribution from pricing and 1.5 points from real internal growth. Coffee, food, snacks, and emerging markets led performance, although currency movements and higher commodity costs weighed on reported sales and profit.Higher prices are supporting sales but putting pressure on consumer volumes.

Mondelēz also achieved contributions from both pricing and volume. Q2 organic sales increased 2.2% YoY, supported by a 1.5-percentage-point contribution from pricing and 0.7 points from volume and mix. Emerging markets and North America led performance, while Europe remained weaker.

Other companies experienced a sharper price-volume trade-off. Kraft Heinz’s Q2 organic net sales declined 1.3% YoY, as a 1.3-percentage-point contribution from pricing was offset by a 2.6-point decline from volume and mix.

In Q2, Hershey’s organic, constant-currency net sales grew 3.6% YoY, driven by approximately 12 points of net price realization, while volume declined by approximately eight points. Although lower commodity costs, productivity savings, and pricing helped rebuild margins, the volume decline highlighted the risk of passing higher costs on to consumers.

Private label is also playing a growing role in addressing affordability. Ahold Delhaize’s own-brand penetration surpassed 40% of food sales in Q2. The expansion of private label increases demand for supplier solutions that balance competitive pricing with nutrition, clean label appeal, and sensory performance.

The contrasting results suggest consumers have not stopped spending, but they are becoming more selective. Products offering trusted brands, health benefits, convenience, or a compelling price proposition appear best positioned to maintain volumes.

Volatility reshapes formulation strategies

Commodity movements continued to produce uneven outcomes. Olam Group’s ofi recorded H1 EBIT of S$509.7 million (US$400.3 million), down 4.9% YoY in reporting currency, while revenue fell 18.1% YoY, mainly reflecting the pass-through of lower cocoa and coffee input prices.

China’s pork sector provided a more severe example. Muyuan Foods recorded a RMB 6.08 billion (US$904 million) H1 net loss, reversing a RMB 10.53 billion (US$1.57 billion) profit in H1 2025. Revenue fell 22.3% YoY, as lower hog prices outweighed production improvements.

Against this pressure, Muyuan continues to emphasize low-soy diets, amino acids, precision nutrition, and flexible feed formulations to lower production costs and reduce reliance on individual raw materials.

Companies are also responding through portfolio changes. Ingredion’s recommended offer to acquire Tate & Lyle, dsm-firmenich’s agreement to divest its animal nutrition divestment, and Danone’s agreements to acquire Huel and MADE Group all point toward greater concentration on differentiated categories and improved operational efficiency.

Unilever’s agreed combination of its Foods business with McCormick provides another example of portfolio reshaping around more focused businesses.

The emerging picture is not one of uniformly weak or strong F&B demand. Instead, growth is becoming more selective. Ingredients and products that offer recognizable health, sensory, convenience, or affordability benefits are pulling ahead, while undifferentiated portfolios face growing pressure from consumers and commodity markets.