Food and Beverage is a challenging industry. Trends come and go, products fall in and out of favour and prices can fluctuate.
Things can also go wrong in production. The recent strawberry needle contamination scandal in Australia highlights some of the risks inherent in the industry. This series of food tampering events has impacted not only consumers but also growers, sellers and others in the industry.
Other risks in the industry include liability claims, financial risks, machinery breakdown, theft of intellectual property and cyber security breaches.
For example, according to the 2017 RSM Food and Beverage Monitor survey of 345 companies in Australia and other countries, 76% said the price of components had increased in the past year, 38% considered that commodity fluctuations presented a business barrier, and 33% had suffered a cyber breach. However, only 21% had addressed cyber risks in their procedures.
It’s important for players in the industry to create sound risk management plans to protect their businesses. This may include:
- Using data management software to track products and their movements to determine where problems occur.
- Being aware of global food trends and changing tastes.
- Tightening up security to protect intellectual property.
- Securing insurance for the company’s risk profile – such as for machinery breakdown, premises, labour hire, food contamination and cyber security, as well as general business insurance cover.
Your broker will be able to assist you to find the right insurance cover, tailored to financially protect your business for its unique combination of risks.