Five Key Topics for Beverage and Food Companies in 2025
2025 will be a transformational year for the beverage and food industry, which has already been dramatically impacted by shifting market trends and profound policy changes. Here are the top five topics influencing the strategies and growth plans of beverage and food companies.
1. Trade and Tariffs
The Trump Administration’s America First Trade Policy, announced on January 20, has already impacted the global operations and sourcing strategies of beverage and food companies. The policy, led by tariffs on Canada, Mexico, China, worldwide tariff threats on imports, and a push toward domestic production, has created an uncertain and unpredictable trade landscape. For example, the tariff on aluminum imports is anticipated to fundamentally change the cost structure for beer, soda, and other beverage manufacturers using aluminum in their packaging. Even if the proposed tariffs are not implemented, or if the implemented tariffs are reversed, the unstable landscape makes it difficult for business leaders to forecast costs, cash flow, and production/sales volumes throughout the year. Valuations, compliance with financial covenants, and timelines for M&A transactions will be impacted accordingly.
To monitor fast-changing developments, ArentFox Schiff has developed a Tariff Tracker with up-to-date information regarding threatened and imposed tariffs. We counsel a multitude of businesses navigating this rapidly evolving trade landscape.
2. Additives
The US Health and Human Services Secretary, Robert F. Kennedy, Jr., has directed the US Food and Drug Administration (FDA) to “take steps… to eliminate the self-affirmed GRAS pathway.” Historically, beverage and food companies have relied on the self-affirmation process to avoid having to go through the FDA’s Generally Recognized as Safe (GRAS) notification or food additive approval process. This potential change could greatly impact the time and cost to bring new beverage and food products to market and could possibly have implications for historical formulations.
The Food, Drug, Medical Device and Cosmetics Group at ArentFox Schiff is tracking these developments, and stands ready to assist clients with navigating the new regulatory framework surrounding beverage and food additives.
3. Immigration Policy Developments
Given the increased focus on immigration compliance and enforcement, beverage and food industry employers should expect increased workplace enforcement actions, including US Immigration and Customs Enforcement raids, and unannounced immigration workplace investigations and more frequent governmental I-9 audits. To minimize disruptions to their operations, beverage and food companies should organize their I-9 records by conducting a proactive internal I-9 audit to correct all deficiencies, to the extent feasible. Notably, employers who choose to proactively correct their I-9 records may take advantage of the “good faith compliance” defense under the Immigration Reform and Control Act of 1986. Such remedial efforts can be taken into consideration during a governmental audit or inspection, and the employer may receive credit for those corrections, thereby mitigating potential penalties.
The ArentFox Schiff Immigration team is ready to provide personalized trainings on these topics for beverage and food businesses of all sizes and industries. The team can offer detailed guidance on how to prepare for an unannounced immigration workplace investigation and how to conduct a proactive internal I-9 audit.
4. Monetizing AI
Artificial intelligence (AI) continues to play a major role in the beverage and food industry, enhancing various aspects from analyzing customers’ preferences to making product development more efficient and product design more attractive. AI is a powerful tool for increasing beverage and food companies’ ability to optimize production and logistics, customer identification/matching, food safety, and pricing strategies.
As new AI tools are adopted, beverage and food companies should closely monitor the evolving legal AI landscape. For example, state data transparency laws in California and Colorado may soon be implemented that will impose new levels of scrutiny on AI developers and deployers, requiring AI developers to make certain disclosures about the data used to train their systems.
The proliferation of AI models capable of performing complex actions on behalf of consumers will raise new challenges for legal compliance and liability, particularly in areas such as product recommendations, personalized marketing, and automated customer service. More information on key AI legal issues for 2025 can be found here.
5. PFAS and Other Forever Chemicals
2025 will be another year full of legislative and case law updates for beverage and food companies manufacturing and selling products containing per- and polyfluoroalkyl substances (PFAS). As of January, multiple states, including California and New York, have implemented or expanded total bans on the sale of a variety of products, including food packaging, containing intentionally added PFAS that have a functional or technical effect in the final product. In many cases, this ban encompasses products manufactured, distributed, sold, or offered for sale in the state on or after January 1, with no exception for goods sold online. Some manufacturers continue scrambling to find solutions for unsold inventory and could find themselves in litigation over unsellable stock.
At the same time, beverage and food companies must satisfy the US Environmental Protection Agency’s (EPA) PFAS reporting rule that took effect in November 2023 regarding reporting and recordkeeping requirements for past use of PFAS in their products. The EPA final rule requires manufacturers or importers of all PFAS-containing “articles” (which includes both finished consumer products and their individual components) to provide a one-time detailed report to EPA on the use of PFAS in their products for each year from 2011 to 2022, even if the products were discontinued. Reporting opens July 11 and must be completed by January 11, 2026; a separate report is required for each type of PFAS.
Finally, this year we anticipate seeing a multitude of consumer class action lawsuits alleging that manufacturers failed to adequately alert consumers as to the presence of PFAS in their beverage and food products and product packaging. Companies in the beverage and food industry should take immediate steps to assess whether any of their products and/or packaging contain PFAS or other so-called “forever chemicals” and to ensure that any use of those chemicals has been adequately disclosed.
ArentFox Schiff’s dedicated PFAS counseling team regularly advises clients on PFAS audits and strategies to mitigate associated risks.
Key Takeaways
More than ever before, changes in the regulatory environment will impact how beverage and food companies do business. In fact, these changes will likely create new champions in the industry, and in some cases, lead to the demise of some long-standing players. As was seen in the COVID-19 pandemic, the companies that stay informed of new developments and proactively modify business operations to take advantage of opportunities and mitigate risks will have the best chance of success and will be best positioned to deliver results for all stakeholders.
ArentFox Schiff’s cross-functional Beverage and Food team will continue to assist companies, big and small, in managing these opportunities and risks.