Food & Beverage Operators Maintain Confidence Amid Rising Costs and Increased Claims Severity

The Food Liability Insurance Program (FLIP) has released its third annual 2026 Food & Beverage Industry Trends Report, which combines insights from mobile food service operators, U.S. consumer dining habit data from 2025 and 2026, and proprietary insurance claims information from 2025. Despite ongoing cost pressures related to food and labor, the report indicates that most operators remain optimistic about the coming year, with 81.7% expressing confidence in their 2026 business outlook. More than 60% of businesses reported growth in 2025, and 42.3% expect their average ticket size to increase in 2026.

"Food and beverage operators are entering 2026 with confidence, but that optimism comes alongside real financial pressure," said Daryle Stafford, CEO of Veracity Insurance, FLIP's parent company. "Rising food costs and tighter margins are forcing business owners to be more disciplined in how they plan for growth and protect their operations." Cost pressures remain widespread across the industry, with 63.3% of operators citing food costs as their largest expense increase, and 72.1% expecting food costs to rise further in 2026. In 2025, 54.6% reported that rising food and ingredient costs negatively impacted their profitability.

Consumer demand appears resilient despite growing price sensitivity. Only 16% of consumers plan to dine out less in 2026, while spending per meal continues to rise. More than 97% of consumers are willing to spend $10 or more per meal, up from 94% last year. However, FLIP's insurance data reveals a notable increase in claims activity and severity. Claims increased by 32.7% year-over-year in 2025, with a small number of high-cost incidents—particularly fires and major accident-related losses—driving a disproportionate share of total incurred dollars.

The most common claim types were accidents causing damage at 23.1%, auto or trailer incidents at 16.4%, weather-related claims at 14.2%, and fire-related claims at 9.7%. The average payout for all claims was $14,158, with 72% of claims occurring during the summer months. Caterers, food trucks and trailers, and farmers market vendors experienced the highest claim activity. "As claims become less frequent but more expensive, operators face a different risk profile than in prior years," added Stafford. "High-severity events can quickly turn into major financial losses, underscoring the need for proactive risk management and adequate insurance coverage."

The full report includes detailed findings by business type, consumer dining behavior, insurance claims activity, and economic outlooks across the food and beverage industry. The complete 2026 Food & Beverage Industry Trends Report is available online at https://www.flipinsurance.com/2026-trends-report.