Top 6 sector risks of concern to watch out
for, hand-picked by our Food and Beverage
experts and clients.
Learn how the food and beverage industry can protect and mitigate emerging risks with Lockton’s Food & Beverage Risk Watchlist. Throughout the report, our findings examine key
considerations and methods to safeguard risk exposures.
The top risks (each risk and response will vary by sub-sector), are:
Employee risks:
Labour shortages – attracting and retaining talent.
Contract labour needs increasing – challenging availability and added costs.
Ongoing Covid-19-related absences.
Change in technology and re-skilling employees.
Ageing workforce and the need for next-gen workers.
The increasing cost of workers’ compensation insurance.
Worker-to-contract worker risk increasing and the insurance gap growing.
Supply chain risks:
Impact on operations from failure at any point in the supply chain.
Vulnerability of transport links.
Geo-political risks.
Lack of space on cargo ships/shipping container shortages.
Semi-conductor production shortages – highlights global pinch exists upstream.
Pallet shortages.Availability of key equipment/machines – increased lead times/delay.
Reputation risk due to unchecked supplier/customer ESG failings.
Inflation risks:
Increasing costs of raw materials.
Equipment cost and longer lead time.
Financially vulnerable to customers/suppliers.
Energy costs pressure throughout the supply chain.
Spiralling labour expense adds to production cost – inability to pass all expenses onto customers.
Under-insurance risks.
Business interruption risks:
Loss of insurable profit following an insured property damage event.
Increased costs incurred post-loss to maintain supply or continue to service customers.
Loss of market share if businesses are unable to maintain an adequate supply.
Incorrect Indemnity Period – the time taken to get back to trading levels that exist at the time an insured loss occurs.
Climate change risks:
Increased energy costs.
Increased exposures to natural hazards such as floods and bushfires; including key supplier.
Base load supply concerns.
Net zero strategies and disruption.
Need for a well-considered ‘sense of purpose’ statement and ESG strategies.
Reputational Risks:
Contaminated products caused by production errors, undeclared ingredients or foreign bodies.
Mis-labelling and packaging errors – absence of allergens and incorrect use-by dates.
Malicious tamper or threats to contaminate products.
ESG concerns, e.g., modern slavery.
Vulnerable ESG statements.
Download Lockton’s Food & Beverage Risk Watchlist: Managing Risks Before Insurance.
Click the download button (located on the right for desktop users and at the bottom for mobile users) and fill out the form to access the report.
