Key takeaways:
Most large food companies had unspent capital in 2025. Sixteen of the 25 in Food Processing’s annual outlook were under budget, and, overall, the group finished 8.8% short of plan.
Spent capital went to cost, service, and inventory. Expansion is challenging when volumes are flat.
Survive mid-year cuts by ensuring each phase pays for itself and aligns with a metric that uses plant data.
Your project made it into the capital plan. But somewhere between the second and third quarter, finance takes another look at the year, and every approved line has to earn its cash a second time.
Last year, many big food companies left part of that budget unspent.
There was an 8.8% difference between budget and spend in 2025
Food Processing’s 2026 Capital Spending Outlook compares what 25 of the largest food and beverage companies planned to spend on capital with what they actually spent. In 2025, the 25 companies spent a combined $20.4 billion against $22.4 billion budgeted, 8.8% under plan. Sixteen were under budget. Of those, 13 spent at least 10% less than planned, including four that missed by more than 20%.
That makes two lean years running. Last year’s edition, published in March 2025, covered 31 companies and showed the first year-over-year drop in budgeted capex since the 2008-2009 recession.
The group’s 2026 budgets total $21.0 billion, 2.9% more than it actually spent in 2025, but still below the $22.4 billion it budgeted for 2025. Fourteen of the 25 budgeted below what they spent in 2025, and 10 of those by more than 10%. Only a minority of organizations are driving total growth.
Food isn’t alone in this. A recent CFO outlook survey found that plans to invest in structures and equipment have dropped since the first quarter. Just under one in five firms said the cost or availability of financing had constrained their investment or spending plans. More than half of that group said it kept them from pursuing new opportunities.
Conagra spent under plan two years running, then budgeted $550 million
In July 2025, Conagra guided to about $450 million in fiscal 2026 capital expenditures. When the year closed, it had spent $423 million while organic net sales slipped 0.4%. That was the second year in a row under plan. Food Processing’s data shows Conagra budgeted $500 million for fiscal 2025 and spent $389 million. Then the company reset. New CEO John Brase cut the annualized dividend to $0.70 a share and set fiscal 2027 capex at about $550 million. His stated priorities include rebuilding margin and spending more on Conagra’s brands and supply chain.
In the July 15 earnings call, executives said an extra $125 million in capital will go toward a sturdier supply chain and lower costs, largely by making more product in Conagra’s own plants. Roughly $100 million of the year-over-year capex increase relates to that in sourcing, specifically when it comes to protein. President and CEO John Brase said, “I do not believe we are investing enough in our brands and our supply chain.” He also pointed to a service-level target of 98% to 98.5%.
So Conagra’s new capital went to cost, service, and inventory, numbers the CFO already reports to the board.
Expansion is the hardest project to defend right now
Morningstar’s Erin Lash said that with CPG volumes stagnating, companies have little interest in adding plant footprint. CoBank’s Billy Roberts described a sector focused on holding its ground against private label and rival brands.
And this is evident on the plant floor. Food plants are running emptier than they have since 2021. A capacity project pitched into that environment asks finance to bet on volume that’s not there yet.
Big multiyear programs are also winding down, and that resets the baseline. Hershey spent $455 million on capital in 2025, down from $606 million in 2024. The company’s CFO noted that capex is settling back to where it should be. Utz said two years of heavy investment in capacity and automation had pushed capex to 7% of net sales. Its 2026 forecast is $60 million to $65 million, about 4% of sales, with roughly 3% expected from 2027 on. Once “normal” becomes the corporate default, every new request has to beat it.
Five ways to make your project difficult to cut
You probably don’t control when the trim happens or how deep it goes. But you can control how much a cut would cost the company.
Phase it so each stage pays on its own. A line upgrade that only works once every piece is installed is one decision, and one decision is easy to defer. Break the scope into stages that each deliver something usable. If finance trims stage two, stage one is already earning, and stage two comes back next cycle with a track record.
Attach it to a number an executive currently owns. Conagra’s new money went to service levels, inventory, and in-house production because someone in the C-suite answers for each of them. Name the customer commitment your project protects, the outside production cost it brings in-house, or the inventory days it removes. A project with a sponsor in sales or finance has a defender when it’s revisited later.
Keep the payback short and state it in months. Know your company’s hurdle and design the scope to clear it with room to spare. The faster a project returns cash, the less cutting it saves, which pushes it down the list.
Bring your own evidence. Finance discounts the vendor’s ROI model first. Your maintenance logs, downtime history, scrap rates, and changeover times are more difficult to wave off because they’re from the plant’s own record. Here’s where your systems pay for themselves without any fanfare. Pull 12 months of downtime and repair cost on the asset you want to replace from your computerized maintenance management system (CMMS) and line data, and you have a payback case based on trusted numbers.
Name the deferral before anyone asks. Tell finance up front which piece you’d push out if cash gets tight, and what that delay costs. You keep a say in the scope instead of watching the whole project slide to the next year.
Where the 2027 growth money will go
For calendar-year companies, 2027 capital plans are now in the works. So far, the money is going to projects that protect margin, service, and share.
Growth still gets funding when it’s argued in those terms. Conagra’s in sourcing spend is a capacity project for protein, and the company justified it on cost and resilience. A new line that pulls an outsourced SKU back into your plant works the same way. Pitch the cost savings first and let the added capacity ride along as upside.
Before your plan goes in, list the three projects you most need next year. For each one, write down the stage that pays first, the executive whose number it impacts, and the plant data that proves the payback. The project missing one of those three is the one most likely to end up on the chopping block.
