Author: Jonalyn Cueto
Original article here.
Business interruption is the leading internal risk for nearly half of food and drink companies, according to the 2024 Global Food and Beverage Risk Outlook published by WTW. The report, which surveyed 400 senior decision-makers in the sector, revealed that 48% of companies view business interruption as the primary threat to their success. Supply chain risk follows closely behind, cited by 40% of respondents.
The industry faces a turbulent environment marked by global instability, conflicts, climate change, and a cost-of-living crisis. This backdrop has made navigating potential disruptions the norm for many companies. Over 40% of surveyed companies identify increasing liquidity as a top strategic objective for the next two years, aiming to bolster their financial resilience. Other priorities include reducing costs (38%) and stabilizing the business (35%).
Rapid shifts in consumer preferences also pose a significant challenge, with 36% of companies expressing concern over keeping pace with these changes. However, this area also presents opportunities, as businesses adapt to new consumer trends. More than half (53%) see embracing sustainability and health and wellness as a leading opportunity, reflecting growing consumer interest in these areas.
Despite the challenges, companies are proactively working to build resilience. Almost half (47%) review their business continuity plans every six months, while 31% do so quarterly. However, 29% of businesses report their insurance covers only property damage from extreme weather, with no provision for business interruption—a critical factor in recovery and resilience.
Simon Lusher, global food and beverage leader at WTW, emphasized the evolving nature of the risks.
“Many of the challenges food and beverage firms face today are of a different order from those they have overcome before,” he said. “Geopolitical instability, conflicts, and cost-of-living crises, alongside climate change, digitalization, and keeping up with the needs and wants of consumers, is getting harder in a fast-changing world.” He advises businesses to reassess their critical issues, areas of focus, and risk management strategies to prepare for various outcomes.
The survey highlights several findings, including: