Our inner walls are sheathed with $10/sheets of "OSB board." We could have used plywood, but it was just more expensive. Many restaurants and meat processors will use FRP panels which are great! They are easy to clean and durable. OSB board (or untreated plywood) should be sealed before installation.
Other materials folks have used green-board, tile, galvanized steel, etc... The main idea is to use something that will not be damaged by exposure to moisture. Do not use standard sheet rock.