The Food Liability Insurance Program (FLIP) has released its third annual industry trends report, revealing that while most food and beverage operators remain confident about their 2026 business outlook, they face mounting challenges from rising costs and increasingly severe insurance claims. The comprehensive analysis combines operator insights, consumer dining behavior data, and proprietary insurance claims information to provide a detailed picture of the industry's current state and future trajectory.
According to the report, 81.7% of operators feel confident about their 2026 business outlook, with more than 60% of businesses indicating they were able to grow in 2025 and 42.3% expecting their average ticket size to increase in 2026. This optimism persists despite widespread cost pressures, 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% of operators reported that rising food and ingredient costs negatively impacted their profitability.
"Food and beverage operators are entering 2026 with confidence, but that optimism comes alongside real financial pressure," said Daryle Stafford, CEO of Veracity Insurance, parent company to FLIP. "Rising food costs and tighter margins are forcing business owners to be more disciplined in how they plan for growth and protect their operations."
Consumer demand remains resilient despite these challenges, with just 16% of consumers planning to dine out less in 2026. Spending per meal continues to rise, with more than 97% of consumers willing to spend $10+ per meal, up from 94% last year. This suggests that while price sensitivity is growing, consumers continue to prioritize dining experiences.
The insurance data reveals a significant shift in risk patterns, with claims increasing 32.7% year over year in 2025. A small number of high-cost incidents, particularly fires and major accident-related losses, are 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 of 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 2026 Food & Beverage Industry Trends Report includes detailed findings by business type, consumer dining behavior, insurance claims activity, and economic outlooks across the food and beverage industry. The report's findings are particularly important for small to mid-sized operators who must navigate both economic pressures and evolving risk landscapes to maintain profitability and business continuity in the coming year.
