Food security risks are rising due to factors like geopolitics, inflation and climate change. As a result, the food, agribusiness and beverage (FAB) industry has been reevaluating how to operate amidst these new and unprecedented pressures.
Geopolitical conflicts and inflation have increased commodity prices and disrupted the global food supply chain, while drought, extreme heat and air pollution have stressed agriculture. FAB industry inflation jumped from 2.2 percent in 2021 to 7 percent at the start of 2022, the steepest increase since 1981, which Aon experts discussed in a recent article in The One Brief. According to Aon, droughts have cost the global economy $1.1 trillion since 1975. So far in 2022, Aon has tabulated five multi-billion-dollar droughts worldwide as reported in Yale Climate Connections, “Food supply and security concerns mount as impacts stress agriculture.”
“On Aon” podcast episode 35 focuses on the future of the food, agribusiness and beverage industry, discussing the impact of supply chains, inflation and climate change. According to Ciara Jackson, Aon’s food, agribusiness and beverage enterprise client leader , “We talk to our clients a lot about operational resilience making sure their systems, processes and structures are as strong as they can be to prevent disruption. But at the moment, inflation is a huge challenge. We’re seeing inflation on packaging, transport and logistics, there’s a shortage of drivers, shortage of warehouse spaces in some territories and there’s shortages of people.”
Aon also recently released its Q2 2022 Global Market Insights Report, highlighting the FAB industry, the top risks for businesses in this space and the impact on risk and insurance agendas. For more information on industry trends, view the spotlight here.