Spotlight: Food, Agribusiness and Beverage Industry Trends and Growth Perspectives
The Inflationary Environment is Becoming Increasingly More Volatile
Commodity price volatility for inputs, ingredients, energy, labor and packaging continue pressuring bottom lines. As costs rise and margins shrink, the industry is under pressure to minimize waste, employ resources efficiently and improve environmental sustainability credentials.
Insurers are closely monitoring Political Risk and Trade Credit risks as world hunger and inflation escalate, and as the risk of business failure remains high during the continued withdrawal of COVID-related government subsidies.
ESG, Climate and Sustainability Agendas are a Growing Priority
FAB businesses are facing increasing pressure from consumers, investors and regulators to define their ESG strategies and plans. Key areas of concern include quantifying and financing physical and transition climate risk, embedding ESG into strategic decision-making and governance, avoiding allegations of ‘greenwashing’ and consequential litigation risk, and operating as a ‘planet-positive’ business.
The FAB sector is particularly vulnerable to the consequences of climate change. The catastrophic effects of weather events have elevated risk and led to significant losses for primary producers of commodities such as coffee, sugarcane and corn.
Operational Resilience and Enterprise Risk Management Remain Critical
A key performance indicator for organizations across the FAB industry is the on-time delivery of safe products to customers. Pre-pandemic, supply chains were complex, digital and lean. COVID-19 introduced a new level of volatility, in terms of both security and safety of supply.
Operational resilience and agility, supported by robust supply chains, is critical. Supply chains are at risk of multiple forms of disruption including product safety and quality, ransomware attacks, weather, terrorism, geopolitics, as well as more traditional transport and logistics risks.
The War for Talent is Relentless
Attracting, retaining and developing talent continues to be a significant challenge for the FAB industry, with intense competition from other industries. The talent profile of the industry is evolving, with increased demand for expertise across tech and digital, risk and governance, and ESG and sustainability.
Human capital in the supply chain is a significant issue as the industry is heavily reliant on in-person manual workers across the supply chain. Significant workforce shortages continue for operatives (particularly in meat and horticulture), and in transport and logistics operators.
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