Sean Riley: You are listening to UnPACKed with PMMI, where we share the latest packaging and processing industry insights, research, and innovations to help you advance your business.
Hi, and welcome to Unpacked with PMMI. I'm your host, Sean Riley. Consumer preferences from high-protein foods to viral grocery trends are reshaping the food and beverage processing industry in many unexpected ways. In today's episode, we chat with Vanessa Lopez from Interact Analysis and explore the key findings from PMMI's inaugural Food and Beverage Processing Industry Report, including the technologies, market forces, and investment trends driving the sector forward. Let's have a listen.
Sean Riley: So with all the fancy introductions out of the way, welcome to the podcast, Vanessa.
Vanessa Lopez: Thank you so much for having me. Excited to be here.
Sean Riley: The pleasure is all ours. So PMMI has been doing a state of the packaging industry for years, as long as I can remember, but this is the first time that we've really dived in with the US food and beverage processing state of the industry. So I'm excited to take a deeper dive into it to see what your data has revealed. What are the broader market trends that are shaping the processing machinery, equipment design, and investment decisions today, the things that are making the decisions for the industry?
Vanessa Lopez: That's a great question. Super interesting doing this for the first time. I've been working on the packaging one for a little bit, and there were a few trends that I noticed going between the two sectors. Those two trends were really workforce and sustainability. The ones that I found super interesting, as they related to processing, were actually the healthy eating and consumer preferences that have been changing, as well as sanitation requirements, and some of the needs that we found in the report in the research process.
Sean Riley: Interesting. The two that you highlighted, what were some of the drivers that piqued your interest?
Vanessa Lopez: As it relates to healthy eating, one thing that was mentioned to me constantly in the report was the increase in protein intake that's happening in the United States recently.
Sean Riley: It's everywhere.
Vanessa Lopez: I'm sure you've seen it on shelves. One thing that I thought was so funny is I think Pop-Tarts is a great example of this. It's not necessarily what you would think of when you think of a health protein-forward food, but it's spread so far throughout the aisles of the grocery store that even Pop-Tarts has its own protein line. And a big part of that is really GLP-1 use that's been increasing in the United States.
Sean Riley: Oh, very interesting.
Vanessa Lopez: If I'm not mistaken, I want to say one in eight individuals in the United States, around one in eight, are actually on GLP-1 medication. And one of the side effects of that is having a reduced appetite and a recommendation to have a higher amount of protein intake.
Vanessa Lopez: But there's also this health craze that's happening in the United States. So there are a lot of individuals seeking out healthier options, reading the back of the nutrition label, and seeing what ingredients they understand. And as a result, there's this new shift in ingredients that's coming forth. Cottage cheese was one that was increasing in relation to this. So it's more of a natural protein, if you will, and people are really starting to want that food a little bit more.
Sean Riley: Interesting. So then, from an equipment and segment standpoint, what are you growing the fastest? You spoke about what is driving the growth, but what is that doing from an equipment standpoint?
Vanessa Lopez: So, as it relates to healthy eating, we're seeing more changes in ingredient lists and changes in recipes. We heard from interviewees that it isn't necessarily increasing new machinery, so you're not going to buy a completely new machine because we're adding protein. We're going to have to work with them to make changes to the recipe. So sometimes the viscosity can change. I think there was talk of adding cottage cheese to ice cream or cottage cheese to yogurt and mixing it in.
Sean Riley: Interesting.
Vanessa Lopez: There's this chemical side. I'm not a baker, and I'm not a chemist, but there's this new level of modification that needs to be made in changing adjustments to the machines, so that's pushing for more changes in that aspect, and working with the vendors to work on that.
Vanessa Lopez: But as it relates to some of the fastest-growing machines, we saw the meat and poultry sector is having an increase there, as well as the dairy sector.
Sean Riley: I saw that. When you kept mentioning cottage cheese, I remembered seeing the dairy growing, and I was wondering what would've been the cause for that because I think dairy, I think eggs, cheese, milk, things that we've all been eating all along. Why would that suddenly be something that was boosting? But maybe that would be something like the cottage cheese, or even yogurt, which I know the Greek yogurt's high in protein, and that's a thing that people are into.
Vanessa Lopez: I think a big thing for the dairy is really that protein intake that's helped. There's actually data available from the USDA, and we show it in the report, which shows the amount of fluid milk sales. And you can actually see in recent years that people are choosing to drink more dairy. So, whole milk has been increasing slightly compared to where it has been in the last 10 years. And some of those low-fat skim milks are actually starting to decrease a little bit.
Vanessa Lopez: The cottage cheese one is actually a result of virality. We talked a little bit about it in the report. But there's this new growing effect where someone posts something online, or it goes viral on TikTok, and everybody wants it, and it flies off the shelves. And cottage cheese was a result of that, where there were some influencers promoting it, talking about the protein intake, talking about how you can put it in your food, your waffles, add it to your eggs. And as a result, it started to increase more purchases. And now there's even cottage cheese that has strawberries in it and different flavored cottage cheeses. So they get this product that's gone viral and make as many options and variables as you can because consumers are just looking to eat everything, try every flavor, and see which ones they prefer.
Sean Riley: Another end user segment that I saw that really jumped and is going to jump going through 2030 at almost like 4.8 CAGR, which surprised me, was prepared foods. Do you have any rhyme or reason for that?
Vanessa Lopez: Yeah. I think prepared foods are really increasing as people are back in the office. So during the pandemic, everybody was really slow working from home, and now we're seeing people come back into the office. And so with that, prepared foods are starting to see.
Vanessa Lopez: So think about how cheese is being sliced, and a lot of these small things that you don't really think about have been done manually. In one interview, it was shared with me that a customer was actually getting little pieces of meat and rolling the cheese around it manually, and they actually created a way to do that automatically. So it's things like that that are increasing the prepared food sector, but it's also just the amount of food that we are consuming as a society, and everyone wants something ready-to-eat and easy to grab, and that's boosting that sector.
Sean Riley: Interesting. Okay. From a machinery standpoint, equipment types, when I looked at it, the thing that was jumping the most, and I hope I know the reason for this, but hopefully you can clear it up a little bit more, was inspection equipment, which was supposed to be the highest at 4%. Is that just the logical, more sanitation rules, more things coming in, recalls, things like that, that's driving that?
Vanessa Lopez: We actually took a look at the sanitation growth and inspection growth that we're seeing in that space. And there's been an increase in US FDA recalls recently. And whenever there's a recall, it is scary for someone as a consumer, but also for the company that's selling this product. No one wants to see their names in the headlines with a recall. And so there's been this growing push to understand, ahead of anything, what is it that's going on, and so inspection equipment has really seen an increase there.
Vanessa Lopez: There's been some new technology starting to come to fruition, especially with the inclusion of AI. You're able to more easily spot smaller fragments of materials than you wouldn't have otherwise. You're able to have a better view of the bones. I think one example that I saw was AI included in inspection equipment for fish bones, which has been notoriously pretty hard to sell. They're really small, and things of that sort are starting to gain more traction. And no one wants anything that's not supposed to be in the food be in their food, and with the technology developing more, we're seeing it increase a lot.
Sean Riley: Interesting. And you led me to a question that I've been thinking, was there any other impact for AI that popped up in the study beyond just inspection equipment, or is that something that hasn't made its way in yet?
Vanessa Lopez: Yeah, we're starting to see AI enter and creep its way into processing a little bit more. I think there's a bit of hesitation. Someone was sharing with me the capability for AI to understand if the machine was outputting the product, let's say, at a thicker viscosity than it needs to be or a lighter viscosity, and note as it's seeing the product come down the line that there's a change that needs to happen and automatically look at the product, look at the data and make adjustments as needed, which is really great. And if we're able to do it, it saves a lot of time from having to stop the machine and make manual adjustments.
Vanessa Lopez: But the barrier that we're seeing on the AI side is the fear of accountability. So if there was an AI glitch and the patties are coming out wrong, and now we have really big patties, who is going to be held responsible for the changes that AI made? So it's slower to come into the machine side as it comes to that.
Vanessa Lopez: But I heard a lot about AI being used to help with increasing the amount of yield out of a product. So when they're cutting off meat off the bone, a lot of that is done manually, and we're starting to hear more about AI being included with robotics to be able to get as much meat off the bone. I'm sure you've heard that the cattle numbers are a little low, and so having the inclusion of AI for a system like that can actually increase yield a lot.
Vanessa Lopez: So AI is starting to come into the market, but I think most people were talking about it more so in the aspect of using it online, using it for marketing, using it to increase easeability or ease of use with the HMI simplification on that front a little bit more to start.
Sean Riley: And that's what I've been hearing as well. I was just curious if it was any different in the processing sector, but you noted that there's a trust barrier, about how much we can trust with... Either way, you're going to still need a person overseeing it, and then is it worth going through all the trouble of the AI if a person and people have to check it anyway? So you jived up with what I've been hearing in packaging as well, so that we have to talk about AI, but it seems like you said it's still in the back office part and not necessarily working its way onto the line, beyond the inspection part, which is pretty cool.
Sean Riley: You've touched on a ton of trends that we should be paying attention to. I guess, are there one or two things that we can expect in the rest of 2026, leading into 2027, or even going out further, in this sector that we should be paying attention to?
Vanessa Lopez: Yeah. I think, as it relates to the trends, fiber is the next protein. So the way protein increased significantly over the last couple of years, we're seeing fibers start to enter. So, fiber drinks, I think, are the start of where we're seeing this entry. I hear fiber gummies are making their way into the space as well. Adjacent to that, I think beans might increase as a natural fiber. So, in the same way cottage cheese and dairy are helping with the protein side, I think beans might be the one that helps with the fiber side.
Vanessa Lopez: Going to the machinery investment, though, in 2026 and 2027, I think we've had a couple of years of uncertainty in 2025. So there's a lot of economic policy changes that happened. And 2024 was a lot of wait and see mentality, so there was change that was going to come at the end of the year, the Fed was lowering interest rates. And then going into 2025, there were a lot of changes, and it was a little bit tumultuous.
Vanessa Lopez: So, going into 2026, I think there's been this pent-up demand that we've been seeing in the market, and people have been holding their money tight and pausing to see where they should be investing and then looking to R&D with all of the virality and the changes that are happening so quickly. 2026 and 2027, I think, are going to be the years when companies are like, "Okay, we've held off for so long. We need to get moving forward on these projects." And I think we're starting to see more talks about where these are going to go, and see more of the market pick up.
Sean Riley: Awesome. I can't thank you enough, Vanessa, for taking time out of your busy day to hop on here and talk us through the inaugural Processing State of the Industry Report.
Vanessa Lopez: Thank you so much.
Sean Riley: Thanks for listening to this episode of UnPACKed with PMMI. If you liked what you heard, be sure to follow or subscribe on Apple Podcasts, Spotify, or wherever you listen. That way, you won't miss any of the industry insights coming your way. While you're there, we'd really appreciate a rating or review.
Sean Riley: Want more? Visit pmmi.org/podcasts for all of our past episodes and additional resources. Thanks again for tuning in. I'll see you next time.
