MD Mikko Käkelä: Finland’s food industry has strong momentum

According to the latest investment survey by the Confederation of Finnish Industries (EK), the annual value of planned investments in the Finnish food and drink industry is approaching one billion euros. Particularly encouraging is that nearly one third of these investments are aimed at expanding business.

In other words, companies are not merely sustaining current production – they are actively laying the foundations for the next phase of growth.

Employment figures are equally encouraging. Finland’s food industry now employs a record 44,000 people, while the wider food sector provides jobs for as many as 320,000 people. Food and beverages are produced across the country, and the industry’s economic impact extends far beyond factory gates.

Each summer, thousands of young people take their first steps into working life in Finnish food and drink companies. This is highly significant. At the same time, companies help build future skills and introduce young people to an industry whose products are part of every Finn’s daily life.

Global events reach the food chain

Although the outlook for Finland’s food industry is positive in many respects, developments around the world are a constant reminder that stability cannot be taken for granted. International crises can quickly affect everyday operations throughout the food chain. Disruptions to supply chains and rising tensions in the Middle East, for example, demonstrate just how interconnected today’s world has become.

Many people first think of fuel or energy prices. For the food industry, however, the impacts are much broader. Raw materials for fertilizers, packaging materials, transport, the availability of shipping containers and international logistics routes all influence how efficiently food can be produced, transported and exported.

This is precisely why food security and self-sufficiency are now being discussed with a new sense of urgency. The debate is both necessary and welcome. At the same time, it is worth asking how much Europe has succeeded in reducing its strategic dependencies in recent years. The answer is not entirely satisfactory.

Finland has taken significant steps in reforming its energy system. Dependence on fossil fuels has declined and clean electricity is widely available. However, we must also strengthen other production inputs that are critical to the food system. Europe, for example, needs greater domestic fertilizer production and fewer strategic dependencies.

Finnish food companies are currently developing new circular economy solutions, low-carbon production methods and innovative packaging technologies. These innovations strengthen both competitiveness and resilience.

Consumer confidence drives the market

Consumers’ confidence in their own financial situation is immediately reflected in the order books of food and drink companies. One particularly interesting – but also worrying – trend is that Finnish consumers continue to perceive inflation as being significantly higher than official statistics indicate.

In May, Finland’s inflation rate stood at 2.1 per cent, while consumers estimated inflation to be 5.1 per cent. Both figures have increased since the beginning of the year. In January, inflation was -0.2 per cent, whereas perceived inflation was 4.1 per cent.

Although inflation has slowed, memories of the exceptional price increases of 2022–2023 remain vivid. Many of us still compare today’s prices with what things “used to cost”. When consumers feel that prices are rising, they adjust their purchasing behavior accordingly.

Strengthening consumer confidence is essential for the continued growth of the food and drink industry. Recent positive economic signals from Finland give reason to expect that confidence will gradually improve.

Well-being is built together, skilled people drive growth

The Finnish Food and Drink Industries’ Federation ETL will continue its determined efforts to ensure that companies in the sector have every opportunity to grow, invest, create jobs and succeed in international markets.

Together with our member companies, we are contributing to the national discussion on nutrition and well-being through our upcoming initiative.

Food and drink companies invest continuously in product development, with improved nutrition and consumer well-being serving as key drivers of innovation. Making this work more visible will encourage companies to go even further.

Ensuring the availability of skilled professionals is equally important, as food and beverages are essential every day. Food industry has the strongest employment multiplier effect of any manufacturing sector in Finland: every job created in the industry generates three additional jobs elsewhere in the economy.

The sector is also setting an example through close cooperation between employers and employee organisations. Together, we are anticipating how work in the industry will evolve and preparing for future changes while strengthening the sector’s attractiveness as a place to work.

Competitiveness through sustainability and data

The ETL will continue to promote more efficient and proportionate regulation in both Finland and the European Union. Sustainability is already deeply embedded in the DNA of our member companies, yet regulatory requirements continue to expand. Companies are increasingly frustrated by the growing administrative burden.

Now when Finland’s public finances are under pressure, policymakers can support businesses by simplifying regulation and avoiding unnecessary national requirements that undermine competitiveness. Finland does not need additional layers of regulation that place domestic companies at a disadvantage. Smart, consistent regulation would itself become a competitive advantage and help Finnish companies succeed in increasingly demanding international markets.

The better use of data and digitalisation has also become a strategic priority for the food sector. A comprehensive study of the sector’s digital transformation is currently underway. It will provide a clearer understanding of how information flows throughout the food system and how data can be used more effectively across the value chain. This also creates opportunities for closer cooperation between the public and private sectors, for example by enabling companies to make better use of the data held by the Finnish Food Authority.

Active advocacy in Finland and the EU

The ETL will also continue to invest strongly in advocacy at the European level. We want to engage early, act proactively and speak up boldly for Finland’s food industry.

Closer Nordic cooperation has strengthened our influence in Brussels, where we work side by side with our sister organisations across the Nordic countries to promote common priorities and ensure that the voice of the Finnish food industry is heard.