Every year brings its own defining challenges, but 2025 was one that was particularly instructive for businesses across Wales and beyond. Against a backdrop of global volatility, tight capital markets and persistent cost pressures, organisations were forced to adapt – not just to survive, but to position themselves for future growth.
While uncertainty has undoubtedly shaped decision-making, it has also driven innovation, collaboration and a renewed focus on resilience. We’ve reflected on what last year taught businesses and where opportunity is already emerging in 2026.
Navigating Uncertainty: The Reality of 2025
For many businesses, 2025 was characterised by a complex mix of financial, operational and people-related challenges. As Hilary Centeleghe, Programme Manager, observes, “Businesses are facing a range of challenges, from navigating finances and securing the right investment, particularly smaller funding amounts, which remain extremely difficult to access, to recruiting, developing and retaining skilled staff.”
Customer uncertainty has also played a major role. Delays in ordering and cautious buying behaviour have forced organisations to become more agile and financially savvy, with a stronger understanding of internal cost structures and cash flow. Those that adapted quickly, by being flexible, responsive and accommodating to buyers, often found themselves winning more work as a result.
From an international perspective, Gail Anderson, Programme Manager, highlights how volatility in tariffs and a difficult global trade environment added further strain. Tight capital markets made it harder to raise finance to support innovation, while rising input costs continued to squeeze margins. In response, many organisations have recognised that the way they operate must fundamentally change.
Sector Spotlight: Welsh Food and Drink in 2025
Few sectors felt these pressures more acutely than Welsh food and drink SMEs. As Linda Grant, BIC’s Managing Director, reflects, worries around tariffs, geopolitics, climate change and muted consumer confidence required producers to remain resilient and agile throughout last year.
While energy prices stabilised compared to the extreme highs of 2024 and some ingredient costs eased, climate change continued to exert a profound influence. 2025 was confirmed as one of the three warmest years on record, extreme weather events disrupted global harvests and drove volatility in key commodities such as grains, oils and cocoa. Closer to home, prolonged wet periods and unseasonal temperatures affected yields, quality and planning, a reminder of just how closely environmental factors are now linked to business performance.
Labour availability has remained tight, particularly for skilled production roles, pushing up employment costs and reducing operational flexibility. At the same time, customers and consumers are placing growing emphasis on sustainability, transparency and ethical business practices, with clear expectations around carbon reduction and environmental responsibility.
Despite these challenges, the sector has continued to demonstrate adaptability and ambition, investing in automation, sustainability and innovation while maintaining a focus on producing high-quality, safe and nutritious food.
What Businesses Have Learned
Across sectors, several clear lessons emerged from 2025. Businesses have learned the importance of operating more efficiently, using AI and other tools to offset higher costs and improve productivity. There has also been a growing recognition of the need to “fail faster” when innovating, testing ideas quickly and refining propositions before committing significant resources.
Attention to detail, quality and service has become even more critical. As Hilary notes, many businesses are focusing on refining existing products and developing new ones, with a renewed emphasis on getting things right first time. At the same time, organisations are being forced to sharpen their investment propositions, ensuring they are genuinely attractive in an increasingly competitive funding landscape.
Opportunities already emerging in 2026
The outlook for 2026 is already cautiously optimistic, particularly for businesses willing to think differently. Hilary highlights that some of the strongest growth opportunities are expected to come from overseas, especially through deeper collaboration with international customers rather than simply exporting products.
Gail points to renewed interest in markets such as the Middle East, which has emerged as a relatively stable and attractive destination despite wider global uncertainty. More broadly, collaboration is expected to be a key theme in 2026, enabling businesses to share risk, pool expertise and spread the costs associated with innovation.
Supply chain innovation, automation and sustainability will also continue to create opportunities, particularly for those organisations that have used 2025 to strengthen their foundations and rethink how they operate.
Finding Opportunity in Change
While 2025 tested businesses in many ways, it also reinforced the value of resilience, adaptability and strategic focus. Those who have taken the time to understand their finances, invest in people and technology, and respond proactively to changing market conditions have entered 2026 in a stronger position.
The challenges of the past year have not disappeared but neither have the opportunities. For businesses prepared to collaborate, innovate and look beyond traditional markets, 2026 now offers the potential not just for recovery, but for sustainable growth.
