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White Paper

Managing Global Risks and Opportunities in the Food and Beverage Sector

April 18, 2023

Global challenges are having a deep impact on the food and beverage industry, from the pandemic to the supply chain crisis, and from the Ukraine conflict to rising inflation. So how is the sector adapting and what are the main risks and opportunities looking forward?
Credit and Political Risk|Cyber Risk Management|Medioambiental|Marine
Climate Risk and Resilience|Geopolitical Risk|Ukraine crisis

Global population hit 8 billion in 2022 and is expected to reach 9.8 billion by 2050.

The UN has estimated that food production will need to increase by 70% to feed everyone1 by the middle of the century.

Yet even before the COVID-19 pandemic, the food and beverage industry was facing massive challenges, including:

  • Climate change
  • More frequent and more severe natural catastrophes
  • Water and labor shortages
  • Human and livestock pandemics
  • Land degradation and deforestation
  • Further global urbanization
  • Pollution and ocean acidification

In this review, WTW colleagues in the areas of crisis management, supply chain disruption, environmental risk, product recall and business continuity look at what our latest global food and beverage survey tell us about the emerging risk landscape for the food and beverage industry.

The review is based on our webinar of 25 January 2023.

Key themes covered in the report include:

Navigating geopolitical risks

The geopolitical challenges facing the food and beverage industry in 2022 were dominated by the conflict in Ukraine, with the impact felt well beyond those operating in the region.

At the same time, several other geopolitical themes are also impacting the food and beverage industry, underlining the need to understand likely global and local risks.

In this report we look at how the sector can steer a safe course in turbulent times.

Reducing the impact of supply chain disruption

Recent global events, such as port congestion, shortage of shipping containers and haulage operators, along with a lack of infrastructure investment, have severely disrupted supply chains.

Managing these supply chain risks has become a top priority, with just-in-time methods facing increasing scrutiny.

In this report, we look at seven key ways that food and beverage businesses can address supply chain disruption.

Environmental exposures

The increased public and political awareness of the impact businesses can have has resulted in an increase in public expectation and regulatory focus on environmental, social and governance (ESG) standards.

This continues to push environmental issues up the boardroom agenda.

In the report, we provide an overview of the key environmental exposures in the food and beverage industry.

Maximizing the benefits of automation and digitalization

Automation and digitalization continue to revolutionize the food and beverage industry, giving businesses the opportunity to optimize processes through new technologies, leading to increased efficiency, flexibility in production and sustainability.

We outline how food and beverage businesses can maximize the benefits of automation and digitalization within the report.

Managing product recall risks

The claims cost to recall, remove and replace products in the food and beverage industry can be high.

The impact of a recall on a brand’s reputation cannot be underestimated, with social media providing a platform for dissatisfaction to potentially reach an audience of millions within minutes.

We provide overview of how food and beverage businesses can manage product recall risks in this report.

Business continuity and resilience

The food and beverage risk landscape has changed exponentially in the last three or four years.

Extreme weather events are expected to become more commonplace, while rising energy costs, environmental concerns, and geopolitical tensions have become ever-present.

Finally, in this report we expand on how food and beverage businesses can ensure business continuity and resilience.

How WTW can help

We work with clients in the food and beverage sector to help them understand what their potential losses could look like, what scenarios they should be concerned about, and advise on placement strategy.

Our analytics team offers powerful modelling tools and systems to help businesses assess risks and quantify probable losses.

We also run workshops to help clients identify their exposures and tailor cover appropriate to their business.

For further information, please contact our experts listed at the bottom of this page.

Footnote

1 United Nations UN News

Disclosure

WTW offers insurance-related services through its appropriately licensed and authorised companies in each country in which WTW operates. For further authorisation and regulatory details about our WTW legal entities, operating in your country, please refer to our WTW website. It is a regulatory requirement for us to consider our local licensing requirements.

For more information, please contact

Jim Martuscelli
Head of Real Estate and Hospitality Industry Practice
email Email

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