Spotlight: Food, Agribusiness and Beverage Industry
An Industry Under Unprecedented Pressures
Food, Agribusiness & Beverage Leader
At Aon, we believe it is important to deeply understand the dynamics of the industries in which our clients operate, and we have established a strong global footprint with regional hubs of industry experts that provide risk management and risk financing solutions across a myriad of sectors. Our holistic approach to understanding, quantifying and managing risk – be it existing or emerging, insurable or uninsurable - is informed by our deep, multi-faceted industry experience, sophisticated risk assessment capabilities, and data-driven insights such as qualitative and quantitative benchmarking which utilize Aon’s industry-leading datasets. We continuously strengthen our industry-focused capabilities and innovate solutions that support our clients’ risk, human capital and insurance strategies.
The Industry Spotlight of this quarter’s Global Market Insight report focuses on the Food, Agribusiness & Beverage (FAB) sector, an industry that is facing multiple external and unprecedented pressures. Top concerns for businesses in this sector include:
- Often through an ESG lens, consumers, regulators, and investors are becoming increasingly more demanding and influential
- The impacts of price inflation such as increasing costs of commodities, ingredients, packaging, labor and energy
- The heightened cyber (ransomware) threat environment
- Geopolitical crises and pandemics leading to vulnerability of global supply chains, food security and energy supply concerns
- Responding to the climate crisis: increasing volume demand to feed a growing population, while producing food in a more sustainable way
- Lack of talent and people shortages
- The sector’s ability to adapt to rapid digitalization
These issues have created a risk environment that is highly complex and inter-connected with many emerging risks that are uninsurable or only partially insurable. Businesses in the FAB sector have built agility and resilience on the back of evolving consumer preferences, regulatory requirements, and commodity and currency fluctuations; however, in the wake of disruption from the pandemic and against the looming threat of recession, alternative financing structures can offer organizations increased financial stability. Some are turning to captive insurance solutions to navigate challenging insurance market conditions and optimize their Total Cost of Risk. Turbulence in the equity market has also made access to traditional forms of funding challenging and some businesses are taking advantage of supply chain funding as an innovative way to boost their working capital and manage liquidity risk. Where traditional insurance remains the best option, FAB businesses can expect continued challenging market conditions with rigorous and strict underwriting.
On behalf of Aon's Food, Agribusiness and Beverage industry practice, I am pleased to provide a closer look at these and other trends and their impact on risk and insurance agendas.
To learn more about Aon’s industry expertise or the specific ways that the Food, Agribusiness and Beverage team can help you evolve and achieve your risk management objectives, please contact a member of your Aon Team.