The food, beverage, and agriculture industry is confronted with a formidable task in the years ahead. It must nourish a growing global population amidst diminishing land resources and escalating weather extremes, all while mitigating the environmental footprint of food and beverage production.
Geopolitical tensions and inflationary pressures only compound these challenges, highlighting the industry's susceptibility to fluctuations in raw material prices and availability.
Such instability threatens to disrupt the industry's resource-dependent supply chain, presenting a formidable array of obstacles even for a sector accustomed to overcoming adversity.
In our second Food, Beverage, and Agriculture global survey, we engaged 400 senior decision-makers to glean insights into their perceptions of this evolving landscape. What are their primary risks and opportunities? How do they confront climate-related challenges? What strategies do they employ for risk mitigation and future planning?
“Our findings reveal that escalating external threats are heightening instability risks across companies, spanning political, climatic, cyber and workforce domains.”
Victor de Jager | Head of Property for Europe Direct & Facultative, WTW
Our findings reveal that escalating external threats are heightening instability risks across companies, spanning political, climatic cyber and workforce domains.
Consequently, apprehensions about potential disruptions are on the rise, prompting a near-term emphasis on liquidity and business stability.
Nevertheless, the sector is demonstrating resilience in adapting to forthcoming challenges. A majority of businesses are embracing sustainability initiatives and integrating climate resilience and business continuity into their risk management frameworks.
Our survey was carried out by our partner Coleman Parkes research in January 2024, using a mixture of phone interviews and web-based survey forms.
We received 400 responses from senior decision makers within food and beverage businesses based in Europe, the U.S. Asia-Pacific and Latin America.
Disruption dominates concerns: The primary focus of the sector lies in mitigating disruptions, with business interruption and supply chain issues being the top internal risks, and global instability exacerbating concerns about potential disruptions.
Sustainability and health as growth drivers: Embracing sustainability, health and wellness presents significant opportunities, reflecting consumer priorities. Businesses foresee these areas as key for growth, with 53% seeing them as major opportunities over the next two years.
71% of businesses identify climate change as a top risk.
Climate change as a major environmental risk: Climate change emerges as the most significant environmental threat, with 71% of businesses identifying it as a top risk. The impact of climate-related weather events such as floods and droughts is increasingly felt across the sector.
Focus on business resilience increasing: There's a growing emphasis on building business resilience to disruptive forces, with 47% of food and beverage companies reviewing their business continuity plans every six months and 31% doing so quarterly.
This proactive approach reflects the recognition of the importance of preparedness in navigating uncertainties effectively.
48% say geopolitical tensions pose significant challenges to risk management strategies.
External factors complicating risk management: External economic factors, geopolitical tensions, and regulatory burdens pose significant challenges to risk management strategies.
Economic factors are cited by 52% of businesses, while 48% point to geopolitical tensions. These complexities underscore the need for robust risk mitigation plans amidst an uncertain global landscape.
How to utilize insights from this report for your food, beverage, and agriculture business:
By leveraging the insights provided in this report, you can strengthen your organization's resilience, capitalize on growth opportunities and navigate the dynamic landscape of the food, beverage and agriculture industry with confidence and adaptability.
For specialist guidance in discovering smarter ways to manage your risks in the food, beverage and agriculture industry, reach out to us today.
