How Top Food & Beverage Leaders Control Costs without Sacrificing Quality

Rising costs are a top concern for most food and beverage executives in 2025. But the problem is more multi-faceted than simple economizing. Not only do you have to keep expenses in check, but you have to do so without sacrificing product quality and hurting your brand.

And yes, even small changes in product quality can trigger backlash from consumers. For example, a few years ago ConAgra reduced the oil content in Smart Balance margarine, a change consumers described as “disgusting” and a “terrible mistake.” Turns out, “skimpflation” doesn’t land.

F&B executives are caught between two competing mandates—one from investors, the other from customers. So how do they strike the right balance? The key isn’t to cut corners, but to optimize processes, streamlining sourcing, and leveraging technology in ways that drive efficiency.

Complex problems require experienced, skilled leaders

At first glance, controlling food costs seems like a problem that’s out of F&B leaders’ hands. After all, the causes of rising prices are mostly macro: inflation, high input costs, disruptions caused by natural disasters and geopolitical events, and more.

But despite these external factors, there are plenty of ways to streamline internal processes to keep costs under control. For example, inventory mismanagement (say, overstocking) can lead to spoilage and waste. What’s more, energy expenses account for at least a third of F&B manufacturing expenses, making inefficiency a major area of waste.

The good news is that, unlike natural disasters or federal monetary policy, these internal factors are entirely within F&B executives’ control. The challenge lies in finding leaders with the right skills and experience to make it happen:

• Vision, transparency, and the ability to align teams around quality and efficiency
• Clear decision-making frameworks to inform when to invest vs. when to economize
• Investment in talent development—both for themselves and the team

Taking a strategic approach to cost control

Let’s assume you find the perfect leader and bring them onboard. What happens next? What steps should they take to keep costs under control? In our experience working with top F&B manufacturers around the world, we’ve seen that the most effective executives look at cost control not as an economization challenge, but an opportunity to invest.

These leaders have the long game in mind. Prices will always fluctuate, and given a long enough period of time, they tend to trend upward. Instead of chasing quick fixes to short-term price changes, top leaders are looking deeper into root causes and implementing strategic investments that address those issues.

Take supplier relationships, for example. Rather than treat every encounter as purely transactional, top F&B manufacturing leaders are constantly looking for ways to invest in the relationship over the long term—i.e. through risk-sharing or collaborative cost-reduction. Or, consider technology and automation. Depending on how these tools are deployed, executives can use real-time tracking to improve inventory management, track actual vs theoretical (AvT) food costs, reduce labor costs, and more.

That doesn’t mean these leaders never economize. For example, they may implement a lean management philosophy, adapting those core principles to the specific demands of the F&B industry. They just treat economization as one tool among many.

3 operational tactics to balance cost control with food quality

When your F&B manufacturing company hires an executive that adopts this strategic approach to cost control, here are some operational tactics you should expect them to implement in your organization.

1. Strategic inventory management

Volatility in supply, demand, and prices makes inventory management a tricky business. Given the speed at which food prices are rising—the fastest pace since 1979—the traditional approach to inventory is too slow.

Strategic executives should pursue a number of tactics that can help make smarter inventory decisions faster. These include:

• Demand forecasting to avoid over- or under-stocking
• Yield management to predict the precise quantity of ingredients needed based on menu items and expected demand
• FIFO/FEFO methodology to avoid expirations and spoilage
• Using technology to enable more consistent inventory tracking based on usage patterns, waste sources, and more
• Improve supplier relationships to gain access to economies of scale and secure competitive pricing

2. Energy and resource efficiency

As mentioned above, energy costs can account for upwards of a third of total expenses. Investments in energy efficiency, then, can be a major source of cost savings, with different tactics ranging from a 15 to 75% reduction in target cost areas.

Some tactics to consider include:

• Replacing faulty equipment and, better yet, upgrading to more energy-efficient alternatives
• Implement efficient systems like variable speed drives (VSDs), which can reduce energy consumption by as much as 60-80%
• Use energy recovery systems to capture excess heat from processes like baking or boiling and reuse it for other operations
• Adopt Power Purchase Agreements (PPAs) or Energy-as-a-Service (EaaS) to secure fixed energy prices and mitigate fluctuating utility costs

3. Quality control systems

Nearly 30-40% of the U.S. food supply is wasted every year. On a micro level, that represents a significant chunk of change that’s literally thrown away each year. By investing in quality control systems, F&B executives can mitigate and, in some cases, eliminate this expense category:

• Precise measurement and monitoring of ingredient use
• Standardize, streamline, and automate regular quality checks to prevent production of substandard products
• Reduce packaging and labeling errors, which account for 70% of all food-related recalls

Bonus: Shipping Cost Management

As we recently wrote about, managing shipping costs—especially during natural disasters, but at all times—is a key way to minimize expenses without sacrificing quality. Read that blog post here.

How to identify these leaders in the hiring process

Now it’s time for the big question: how do you identify leaders who actually have the skills to navigate the road ahead in 2025 and beyond? It requires a combination of skills and experience that not every leader has.

At Alpha Executive Search, we look for a variety of traits when searching for F&B manufacturing executives. In terms of experience, we want people who’ve engaged in cross-functional collaboration, supply chain optimization, continuous improvement, and technology implementation. On the skills side, they need a mix of financial literacy, quality systems, data analysis, vendor negotiation, change management, and more.

Because of our deep industry connections and data-driven approach, we’re able to identify these unique leaders faster and with a higher success rate than any other executive search partner. To learn more about our proven process, get in touch with a member of our team today.