What’s the prime threat for foods and drinks firms?

Enterprise interruption is the main inner threat for almost half of foods and drinks firms, in response to the 2024 International Meals and Beverage Danger Outlook revealed by WTW. The report, which surveyed 400 senior decision-makers within the sector, revealed that 48% of firms view enterprise interruption as the first risk to their success. Provide chain threat follows carefully behind, cited by 40% of respondents.

The business faces a turbulent surroundings marked by world instability, conflicts, local weather change, and a cost-of-living disaster. This backdrop has made navigating potential disruptions the norm for a lot of firms. Over 40% of surveyed firms determine rising liquidity as a prime strategic goal for the following two years, aiming to bolster their monetary resilience. Different priorities embody lowering prices (38%) and stabilizing the enterprise (35%).

Speedy shifts in shopper preferences additionally pose a major problem, with 36% of firms expressing concern over maintaining tempo with these modifications. Nevertheless, this space additionally presents alternatives, as companies adapt to new shopper tendencies. Greater than half (53%) see embracing sustainability and well being and wellness as a number one alternative, reflecting rising shopper curiosity in these areas.

Resilience constructing amid uncertainties

Regardless of the challenges, firms are proactively working to construct resilience. Nearly half (47%) assessment their enterprise continuity plans each six months, whereas 31% accomplish that quarterly. Nevertheless, 29% of companies report their insurance coverage covers solely property injury from excessive climate, with no provision for enterprise interruption—a important consider restoration and resilience.

Simon Lusher, world meals and beverage chief at WTW, emphasised the evolving nature of the dangers.

“Lots of the challenges meals and beverage corporations face at this time are of a special order from these they’ve overcome earlier than,” he mentioned. “Geopolitical instability, conflicts, and cost-of-living crises, alongside local weather change, digitalization, and maintaining with the wants and desires of customers, is getting tougher in a fast-changing world.” He advises companies to reassess their important points, areas of focus, and threat administration methods to organize for varied outcomes.

The survey highlights a number of findings, together with:

• Disruption considerations: Enterprise interruption and provide chain points are the highest inner dangers, with world instability heightening considerations about potential disruptions.
• Progress alternatives: Sustainability and well being and wellness are seen as main development drivers, with 53% of firms figuring out them as key alternatives.
• Local weather change threat: Local weather change is a major environmental risk, with 71% of companies recognizing it as a prime threat. The sector more and more feels the affect of climate-related occasions reminiscent of floods and droughts.
• Enterprise resilience: There’s a rising emphasis on enhancing enterprise resilience, mirrored within the frequent assessment of enterprise continuity plans.
• Exterior challenges: Financial components and geopolitical tensions complicate threat administration methods, cited by 52% and 48% of companies respectively.

For the complete report, go to the WTW web site.

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