Structural transformation is taking place across the entire food value chain

By: Trademagazin Date: 2026. 03. 20. 11:34

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A new $3.1 trillion market is emerging in the food industry by 2035, with much of the growth coming not from excess consumption but from structural transformations, technological innovations and health-conscious consumer expectations. According to PwC Strategy&’s latest study, Future of Food 2.0, this momentum is setting new directions for everyone from farming to retail. Without stable economic conditions and targeted support, however, it will be difficult for farmers most exposed to climate and cost risks to make the transition.

The modern food economy is undergoing its most profound structural transformation yet. By 2035, fundamental changes in how food is consumed, produced and sold will create a market worth around $3.1 trillion in innovative areas growing four times faster than the industry.

According to the latest report from PwC’s global strategy advisory business (Strategy&), the transformation is being driven by three defining trends:

the rise of health-focused lifestyles,

the demand for fast and convenient food delivery, and

increasing climate risks – all of which are being accelerated by technological and AI-driven innovations.

These trends are completely reshaping the way food is produced and sold today. From alternative proteins and sustainable packaging to AI-powered shopping assistants, new solutions are emerging, and nearly 90% of this growth is driven by structural transformations; for example, the substitution of scarce raw materials with waste or the replacement of traditional proteins with alternative proteins.

Health boom: new consumer logic, new market winners

The study predicts that by 2035 this global potential will be visible across the entire value chain: an increase of $400 billion in food production, $680 billion in manufacturing, and $2,060 billion in the consumer segment.

Within these, PwC experts have identified several highly promising areas:

In agriculture, greenhouse cultivation is expanding rapidly: its global market is expected to double by 2035, reaching $220 billion.

Precision agriculture continues to strengthen, increasing the cost-efficiency and resilience of farms.

On the manufacturing side, sustainable packaging dominates: its market could grow to $430 billion following strict EU regulations.

However, the greatest growth opportunity is in the consumer segment. The turnover of the health and nutrition category could increase from $490 billion today to $800 billion by 2035. The market is also being shaped by the rapid spread of GLP-1 drugs, which are already affecting portion sizes, satiety and food preferences.

“The food industry is undergoing a fundamental structural change. Technological developments, climate risks and changing eating habits are simultaneously questioning traditional business models, while completely new areas of value creation are emerging. For more and more people, food no longer serves merely to satisfy hunger or as a source of pleasure, but also as a means of health, fitness and personalization”
– emphasizes Harald Dutzler, the study’s lead author co-author and partner at Strategy& Austria.

The expert highlights that consumers are increasingly following personalized diets due to the spread of wearable devices, digital health checks and AI analyses. This is stimulating the demand for protein-rich and functional foods. Dairy Soybean – once considered waste – has now become a more valuable raw material than the cheese or yoghurt it is made from.

Sustainable packaging is also part of the structural change. The PwC survey on the future of reusable packaging also shows that the transition to circular and recyclable solutions affects the efficiency of supply chains, cost structures and consumer confidence.

“Consumers fundamentally demand opportunities where they can do something for the environment. If there was an environmentally friendly option for their favorite products at a similar price, they would choose it. However, a sustainable solution can only truly spread if it means a convenient and easy choice. The transition works where the consumer can make a good decision in their usual routine, without extra organization and significant price differences”
– pointed out Léna Molnár, PwC Hungary expert.

Unequal conditions: the role of producers is crucial

According to the study, despite growth, the food ecosystem remains characterized by significant structural inequalities. The focus of growth dynamics is at the end of the value chain – in trade and hospitality – while the greatest climate and cost risks are concentrated with agricultural producers.

608 million farmers worldwide produce food, 84% of them on farms smaller than two hectares, meaning that the backbone of global food production is predominantly small-scale farms. For them, investing in precision technologies, digitalization or regenerative methods is a serious financial risk. According to the study, the pace of transformation of the food system will depend on whether these small-scale farms can make this transition. Without stable economic conditions and targeted support, many new technologies – and the growth opportunities they bring – may remain theoretical.

From survival mode to strategic growth – food ecosystems

The Hungarian food ecosystem today operates more along the logic of survival than moving towards development. The relationship between retail and small and medium-sized producers is often contingent, and most of them do not have the resources, technological capabilities or quality assurance systems that would be necessary to act as a national supplier to a large chain. The current area-based support system does not encourage producers to make investments that increase efficiency and adaptability, so the natural consequence of the system is that many actors focus on “maintaining the level”, PwC experts point out.

However, there are positive examples. Kifli.hu consciously builds on domestic producer cooperation and successfully serves a customer base that is open and solvent towards quality Hungarian food. Initiatives can also be seen on the side of larger retail chains – for example, the cooperation between Auchan and the National Chamber of Agriculture to support Hungarian farms’ access to the market – but these are more partial successes than widely felt structural breakthroughs.

“Ultimately, the transformation of the entire system is not determined by technology per se, but by the investment capacity of farmers. The turning point in Hungary will also be where producers receive a real economic incentive to switch to higher value-added, data-driven, quality-assured production models. Only in this way can they become part of long-term, predictable, national supply chains”