Bord Bia’s latest Market Insights Report, released on 11 November at their Food Service Seminar in Johnstown Estate, Co Meath, tells an interesting tale about Irish food service. While things look promising on the surface, a deeper dive speaks to wider issues currently facing the Irish food and hospitality sector.

According to the report, industry turnover for 2025 reached a record €10.4 billion across both the Republic and Northern Ireland – the largest turnover it has ever seen. But should this figure be taken at face value?

Bord Bia’s food service specialist, Maureen Gahan, says the growth we are currently seeing “hasn’t been without difficulties,” thanks to the post-pandemic economic slowdown combined with a more discerning Irish consumer. The main reason why 2025 turnover is so high is due to menu and price inflation as operators raise prices in response to increased costs of operation.

“Many operators still struggle with profitability due to rising costs,” Maureen says. “Future growth will depend not only on pricing, but also on collaboration, innovation, and a renewed emphasis on making food service both affordable and enjoyable for consumers. Because of menu price increases it’s just not as affordable as it was for the consumer with less disposable income in their pocket. They might want to go out but they can’t do it as frequently.”

Menu inflation

The prices we see on Irish menus are now 26% higher on average that they were in pre-pandemic times. As operational costs have increased, the profit margin for Irish food service businesses – which were small enough to begin with – has gotten tighter. When prices increase, consumers start to consider eating out an unaffordable practice. Until inflation is lowered to a level acceptable for consumers, growth is predicted to stagnate.

According to the report, hotels and pubs have been hit hardest by cost pressures and a lack of footfall. It also indicates an urban-rural divide, where we see rural food service operations facing greater challenges than their urban counterparts.

“Dublin has become a hub for international tourism,” Maureen says. “Visitors tend to take day trips to other areas and then come back to Dublin, so there is not a huge knock-on effect for rural hospitality businesses.”

It all sounds pretty bleak, doesn’t it? However, with challenges there are also always opportunities, and that’s why these reports exist – to help businesses navigate changing times. Irish food service operators are not alone in their current struggles – operational costs have increased all over the world – and there are examples of how other operators are finding creative solutions to these challenges.

“There’s a brand in Chicago called Goddess and the Baker, I was there on a recent visit to Chicago,” Maureen says, “One of our recommendations is around customer leverage, which includes a combination of factors which will create customer loyalty. It’s hard to put your finger on what might work for an individual business, but if you get it right, you’re golden. This spot in Chicago had great coffee, good food, a good system for getting people through, merchandise and a really strong brand.”

The Bord Bia report highlights other areas of opportunity within Irish food service, including the Government-led Hot School Meals Programme. As Irish Country Living reported last September, there are still issues to be worked out with this programme, but institutional food service has seen a 15.5% growth in the past year which was driven by a combination of the Hot School Meals Programme and the return to office mandate.

Consumers might be feeling restaurant-weary, but they are still up for interesting and engaging food experiences. This is proven through the growth in leisure and events hospitality, which includes eating at sporting events and concerts and reflects the idea of consumers “going all out” in their food spending when the timing is right.

“It’s also those ‘everyday’ food service occasions,” Maureen adds, “and a lot of people forget about them. They might buy a sandwich once a week, or coffees three or four times a week. From a value point of view, these everyday purchase comprise of around 36% of the market.”

As the industry attempts to work through this time of inflation and lower-than-usual consumer footfall, Bord Bia is calling for collaboration across the supply chain. While projected growth for 2026 is at 5%, this is again largely due to menu and price inflation. Until consumers see value in food service offerings, they will continue to look at other options.

When they say collaboration, the mean operators (business owners), suppliers and outside organisations all working together to think outside the box. Building sustainable pathways and investing in technology are ideal ways to innovate, but at the source of it all, the end consumer must always be considered – that human element to hospitality can never be replaced.

“Technology is important, and it’s all about how we can find efficiencies,” Maureen says. “In restaurants, that’s usually in the front-of-house. People appreciate convenience, but we need to remember that hospitality is all about the people.”

Collaboration in action

Pat O’Sullivan is CEO of Master Chefs, a Co Limerick catering company which holds major contracts with universities, hospitals and sports arenas. The key to their success is as much about how they have been able to innovate and collaborate.

Pat is passionate about sustainability and making change from within, but he found that when trying to source local, organic ingredients, there wasn’t always the scale or consistency required for catering. This led him to develop Ellan Farm in 2021, a 20ac organic farm where much of their own produce is grown. Located in Ballyneety, Co Limerick, developing this farm was a huge investment, but Pat says it has also led to many new opportunities.

“We’re experiencing phenomenal growth, and Ellan Farm is central to that,” he says. “We choose contracts that have synergies with our own vision for food solutions; we don’t go for every job on e-tenders.

“The farm has helped us physically demonstrate that there’s no greenwashing here – we have a clear pathway for the farm with our new processing facility, which is now nearing completion.”

Master Chefs recently won the catering services for Limerick’s new Bon Secours Hospital, which they will take on in addition to their work within other areas, like University of Limerick and the nutritional-based catering required for the Connacht rugby team.

The business also caters for Maynooth University and the National Gallery of Ireland. However, it’s their collaborative work on the new Mid West Bio District which is leading to even more opportunities to grow in the sector.

More opportunity

“The Bio District evolved from a number of conversations I had with Joe Kelleher [organics specialist with Teagasc], Anne Maher [of The Urban Co-op] and some of my clients,” he says.

“Organics can feel disjointed in its supply chain. I wanted more of a connection with organic produce as a consumer and Joe said, ‘What you’re talking about is a bio district.’ It all went from there.”

The Mid West Bio District is based on a wider European model where producers, suppliers and food service operators work together to achieve local social, economic and environmental sustainability goals.

It received a portion of the Government’s Short Supply Chain Funding earlier this year. One year into the group’s plan, they are working to create paths to connect organic producers with large-scale catering companies like Master Chefs. Pat says collaboration has been a significant element of the project.

“It is through collaborative efforts that we decided to re-evaluate how we would go forward – and that was by investing over €1 million in a farm,” he says.

“We underpinned our business through sustainable projects that people could align with and buy into, and that has led to further synergies. It’s been a remarkable journey.”