Business Interruption Danger for Food and Beverage Retailers

In a rapidly changing world, the food and beverage industry faces significant risks, with business interruption emerging as the foremost concern. According to WTW’s 2024 Global Food and Beverage Risk Outlook, nearly half of the companies in this sector, about 48%, view business interruption as their primary internal risk. This concern is closely followed by supply chain issues, which 40% of companies identified as a major problem.

Consumer preferences present both challenges and opportunities. More than 53% see growth potential in areas like sustainability and health and wellness. There’s a growing interest in products related to gut health, nutrition, and sustainable production, shifting from plant-based meat substitutes. Yet, 36% of companies express concern over adapting to these changes.

The industry is increasingly aware that a comprehensive reassessment of their critical issues, areas of focus, and risk management strategies is essential. By doing so, businesses can better prepare for a range of outcomes and ensure continued operations amidst ongoing global challenges.

The persistent disruptions plaguing the industry stem from various global instabilities, including geopolitical conflicts, climate change, and the ongoing cost-of-living crisis. These challenges have prompted companies to adopt a more cautious and strategic approach to ensure resilience. Notably, 41% of businesses are prioritizing the enhancement of liquidity over the next two years as a buffer against unforeseen future shocks. Alongside this, other critical objectives include reducing costs, a priority for 38% of companies, and stabilizing operations, a goal for 35%.

To fortify their operations against these risks, many businesses are enhancing their resilience strategies. Almost half of the companies (47%) now review their continuity plans every six months, with a notable 31% doing so quarterly. Despite these proactive measures, there remains a significant vulnerability; over a quarter (29%) of businesses lack adequate insurance coverage for business interruptions caused by extreme weather, which is a crucial aspect of their recovery strategy.