A recent report by WTW has illuminated the primary risks impacting the success of food and beverage companies globally. The 2024 Global Food and Beverage Risk Outlook, conducted by the World Trade Organization, indicates that nearly half of the companies surveyed have identified business interruption as the most significant internal risk to their success, closely followed by supply chain risk.
The report, which engaged 400 global senior decision-makers in leading food and beverage companies, revealed that navigating turbulence and potential disruption has become the new normal in the sector. This is against a backdrop of global instability, conflicts, climate change, and the cost-of-living crisis.
In response to these challenges, over 40% of food and beverage companies have expressed the need to increase liquidity as one of their top strategic objectives for the next two years, providing them with the financial strength to manage through any further shocks. Additional priorities include cost reduction and business stabilization.
Furthermore, companies are becoming increasingly apprehensive about their ability to keep pace with the rapid change in consumer tastes and preferences. While this presents a risk, it is also viewed as an opportunity as companies pivot to capitalize on the latest consumer trends.
The report also highlights an opportunity identified by over half of the businesses, which is embracing sustainability and health and wellness. In comparison to 2022, there is less enthusiasm for plant-based meat substitutes and increased interest in gut health, nutrition, and sustainable production among consumers.
Despite these challenges, food and beverage businesses are taking action to build resilience, with almost half of them reviewing their business continuity plans every six months and a third doing so quarterly. However, more than a quarter of businesses have emphasized that their insurance includes damage to property only in the event of extreme weather, with no cover for business interruption, which is a key factor in recovery and resilience.
Simon Lusher, Global Food and Beverage Leader at WTW, emphasized the need for businesses to become more resilient in the face of these challenges. He advised companies to reassess critical issues in the business, areas of focus, and how they can manage the key risks they face to be prepared for almost every outcome and keep operations moving forward.
The report provides valuable insights into the current state of the food and beverage industry, offering a clear understanding of the risks and opportunities that lie ahead. It serves as a reminder for companies to assess their strategies and build resilience to thrive in a fast-changing world.
At WTW, they provide data-driven, insight-led solutions in the areas of people, risk, and capital. Leveraging the global view and local expertise of their colleagues serving 140 countries and markets, they help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce, and maximize performance. Working alongside their clients, they uncover opportunities for sustainable success and provide perspective that moves businesses forward.