Industries & Companies
Q2 2026
Industry Pulses: Connected Sectors
The briefings that follow cover the report’s three core operating markets—Retail & Consumer; Food, Beverage & Consumer Products; and Agriculture & Agribusiness—plus one rotating adjacent industry.
Logistics & Transportation is this quarter’s rotating briefing. These shorter pulses track the other sectors shaping cost, capacity, risk and execution by separating what is happening, why it is happening and what would have to change for the near-term trend to turn.
Banking & Rural Credit
What is happening: Agricultural lenders remain well capitalized, but credit is becoming more selective. Kansas City Fed data showed second-quarter farm-loan originations declining across most non-real-estate purposes, with larger loans priced just below 7% and smaller loans slightly above it. Repayment and restructuring measures are weakening gradually rather than signaling a sudden system-wide break.
Why: Lower commodity margins, elevated input costs and expensive working capital are reducing borrower cushion, so lenders are differentiating more sharply by liquidity, collateral, concentration and cash-flow visibility. The issue is not an absence of credit; it is a higher burden of proof for borrowers whose repayment depends on a better crop, better price or lower rate.
Near-term outlook: Selectivity is likely to persist through the next renewal cycle. A broad easing would require stronger farm income, improved repayment performance and lower funding costs; weaker collateral values or another income shock would push more credits toward restructuring.
Packaging & Materials
What is happening: Packaging is becoming a larger source of both cost volatility and commercial choice. Expanded tariffs on steel, aluminum and copper have increased uncertainty for cans, closures, equipment, shelving and imported components, while resin, fiber and freight conditions remain mixed. Brands are also using smaller entry packs, larger value formats and channel-specific configurations to manage household affordability and preserve penetration.
Why: Many packaging systems were designed around a single specification, supplier or cost assumption, so trade and input shocks travel quickly into the P&L. The cheapest material change can also create hidden costs through damage, shelf-life loss, slower lines or a weaker consumer experience.
Near-term outlook: Volatility should persist until trade policy and key input costs stabilize. Companies with flexible specifications, qualified alternatives and clearer pack-price architecture will adjust faster; broad-based relief would require lower tariff exposure, more supplier competition and steadier resin, fiber and freight markets.
Ingredients & Inputs
What is happening: Ingredient demand is rewarding function more than simple volume. Kerry reported 3.1% volume growth and margin expansion, while IFF generated comparable currency-neutral growth across its businesses. At the same time, Nestlé’s coffee growth and Delfi’s cocoa pressure show that commodity volatility is still moving through manufacturers unevenly.
Why: Ingredients that improve taste, nutrition, shelf life, convenience or processing efficiency can preserve pricing and mix, while commodity-heavy formulas remain exposed to harvests and inventory. SKU proliferation adds another layer through minimum orders, obsolescence, changeovers and forecasting error.
Near-term outlook: Functional ingredients should continue to outperform, and manufacturers can improve economics through a smaller ingredient library, dual qualification and disciplined reformulation. Broad cost relief will require better crops and inventory rebuilding in stressed commodities; without that, procurement and formulation choices will determine how much volatility reaches margin.
Equipment & Manufacturing
What is happening: Equipment demand is selective rather than broadly recovering. AEM reported higher U.S. combine sales in June while tractor sales remained below the prior year, consistent with operators funding necessary replacement, uptime and bottleneck relief while deferring wider fleet or plant refreshes.
Why: High financing costs, weaker farm economics and uncertain order visibility raise the hurdle for discretionary capital spending. Projects still move when they reduce scarce labor, prevent downtime, add line flexibility or protect throughput, but tax benefits and vendor financing alone are not enough to make a weak operating case attractive.
Near-term outlook: A broad replacement cycle is unlikely without lower borrowing costs, stronger farm and processor margins, and better demand visibility. Automation should remain comparatively resilient where labor or service risk is measurable; projects tied mainly to optimistic volume forecasts will continue to be delayed.
Energy & Utilities
What is happening: Energy has returned as both a cost issue and a capacity constraint. National on-highway diesel reached $5.134 per gallon on July 20, raising the cost of inbound freight, outbound distribution, field service and farm operations, while electricity availability is becoming a longer-duration concern as data-center demand, grid congestion and interconnection queues compete with industrial expansion.
Why: Fuel prices transmit quickly through transportation networks, whereas power supply responds slowly because generation, transmission and site interconnections require years to permit and build. Food processing, cold storage and water-intensive manufacturing are especially exposed because they cannot easily reduce load or tolerate outages.
Near-term outlook: Diesel can ease if crude and refining conditions normalize, but delivered costs will remain sensitive to region and lane. Power constraints are unlikely to improve quickly without faster interconnection, new generation and transmission, or added on-site capacity; until then, availability may matter as much as price in site and expansion decisions.
Insurance
What is happening: Commercial insurance is becoming more negotiable, but the improvement is uneven. Property capacity has increased and global property rates have declined, while casualty pricing remains firm and underwriters continue to scrutinize recall, contamination, auto, worker-safety, cyber, refrigeration and contractual exposures across food, agriculture, transportation and consumer products.
Why: More property-market capacity is creating competition, but casualty losses remain pressured by medical and repair inflation, larger verdicts and persistent claims severity. Sector-specific losses can also overwhelm broad market improvement when business-interruption values, supplier dependencies or recall controls are poorly documented.
Near-term outlook: Property buyers should retain leverage if capacity holds and catastrophe losses remain manageable. Casualty is less likely to soften materially until loss costs and claims severity improve; a major catastrophe cycle, adverse reserve development or deteriorating company-specific loss experience would reverse the broader relief.
Industrial Real Estate & Cold Storage
What is happening: Broad industrial vacancy has moved into the high-single-digit range by some measures, giving tenants more choices and slowing rent growth, but food- and agriculture-specific space remains much tighter. Cold storage, food-grade processing, rail access, wastewater capacity, infill locations and dependable power continue to command scarcity value.
Why: Conventional warehouse supply expanded as demand normalized, while specialized facilities are slower and more expensive to build, permit and equip. At the same time, tenants rolling leases signed near the end of 2020 can still face meaningful mark-to-market increases, and a low-rent older building may carry higher labor, inventory, maintenance and spoilage costs.
Near-term outlook: Negotiating leverage should improve further for generic distribution space, but specialized food and cold-chain assets are unlikely to loosen quickly. That would require new fit-for-purpose supply, available power and wastewater capacity, and easier development economics—not merely a higher national vacancy rate.
Technology & Commerce Platforms
What is happening: Commerce and software platforms are spending aggressively to put AI into merchant, sales, service and operating workflows. Shopify’s merchant GMV exceeded $100 billion in Q1, Amazon sustained double-digit North America growth, and HubSpot, Salesforce and Asana paired AI investment with improving operating leverage, while Microsoft and Alphabet continued to expand the infrastructure beneath the market.
Why: Platforms are trying to protect their ecosystems, create new usage and automate labor-intensive tasks, but the economics depend on data quality, integration and adoption—not the presence of an AI feature.
Near-term outlook: AI capability will spread faster than measurable returns. The trend becomes durable when tools consistently shorten cycles such as demand planning, trade-promotion analysis, route planning, collections or customer response; weak data, fragmented ownership or low user trust will keep many deployments in pilot mode.
