Food manufacturers are no strangers to volatility. Commodity price spikes, supply shortages, labour challenges and changing consumer preferences have all become familiar features of the operating environment.
However, our latest Global Food, Beverage & Agriculture Risk Report suggests something more fundamental is taking place: many of the risks that were once considered periodic disruptions are becoming permanent features of the landscape.
The consequence is a growing sense among industry leaders that resilience is being tested in new ways. In fact, only 62% of food, beverage and agriculture businesses now feel somewhat or completely in control of the root causes of their risks, down from 75% in 2024 and 89% in 2022.
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The challenge for manufacturers is no longer simply managing individual risks. It is understanding how multiple risks can interact and amplify one another, creating disruption across operations, supply chains and customer relationships.
Product recalls: The hidden cost of disruption
One of the clearest findings from our research is the growing concern over product contamination and recall risk.
More than a third (38%) of respondents identified product contamination and recall as a leading internal risk, up from 31% in 2024. At the same time, food safety and health concerns have risen sharply up the agenda, increasing from 29% to 45%.
38% of food, beverage and agriculture businesses identify product contamination and recall as a leading internal risk.
Global Food, Beverage & Agriculture Risk Report
Food manufacturers are operating in an environment of tighter margins, evolving regulations, increasingly complex supply chains and heightened public scrutiny. Labelling errors, contamination incidents, supplier failures and malicious tampering can all trigger costly recalls.
Yet many businesses may still underestimate the true financial impact. While the immediate costs of withdrawing products from the market are obvious, the longer-term operational consequences can be far greater. Lost production time, disrupted customer relationships, retailer penalties and recovery costs often outweigh the direct cost of removing products from shelves.
Our findings indicate that fewer organisations now rank business interruption among the biggest consequences of a recall, despite evidence that it is often the largest component of recall losses. This suggests some businesses may be focusing on the visible costs while overlooking the broader operational impact.
Cyber risk is no longer just an IT issue
At the same time, digital transformation is creating new vulnerabilities.
The food industry has embraced automation, operational technology and artificial intelligence to improve efficiency and competitiveness. Our survey found that 44% of respondents see AI as a major opportunity, while 43% highlighted new production technologies.
However, increased connectivity also expands the potential attack surface for cyber criminals. Cyber risk was identified by 40% of respondents as one of their top internal threats, up from 32% two years ago.
For food manufacturers, a cyber attack is no longer simply a technology problem. It can halt production lines, compromise operational systems, disrupt cold storage facilities and affect product availability. In sectors dealing with perishable goods, even a short outage can have significant financial consequences.
40% of food, beverage and agriculture businesses cite cyber risk as their top internal threat.
Global Food, Beverage & Agriculture Risk Report
As businesses become more connected, cyber resilience needs to be embedded within operational resilience planning. The question is no longer whether a business could be targeted, but how quickly it could recover if it were.
Supply chains remain under pressure
Global supply chains continue to face challenges from geopolitical instability, trade tensions, climate events and transportation disruption. Our research found that 44% of organisations are concerned about supply chain vulnerabilities, while concern over the cost and availability of inputs has risen significantly compared with previous surveys.
And recent years have demonstrated how rapidly disruption can cascade through food supply chains. A weather event affecting a key growing region, a conflict impacting shipping routes or a sudden trade restriction can have ripple effects across sourcing, production and distribution.
Many manufacturers have already taken steps to diversify suppliers and strengthen continuity planning. Encouragingly, 83% of respondents now report having a formal business continuity process.
However, resilience is increasingly about understanding critical dependencies before disruption occurs. Businesses that can map supplier exposures, identify bottlenecks and develop alternative sourcing strategies are likely to be better positioned than those relying on reactive responses.
A new era of scrutiny
Another significant trend is the growing focus on nutrition, public health and product formulation. The debate around ultra-processed foods, alongside increasing scrutiny of ingredients and health claims, is creating a more complex operating environment for manufacturers. Concerns about food safety and health risks have risen dramatically since our previous survey, reflecting heightened public awareness and an increase in litigation activity globally.
Alongside this, 76% of respondents identified food standards and public health as one of their biggest social risk factors. Manufacturers are therefore facing a challenge that extends beyond compliance. Reputation, transparency and consumer trust are becoming increasingly important components of long-term resilience.
Resilience as a competitive advantage
Despite the pressures facing the sector, there is reason for optimism. More than half of respondents expect their business to be more profitable in two years’ time. The most successful organisations are likely to be those that view resilience not simply as protection against downside risk, but as a source of competitive advantage.
That means investing in robust quality controls, strengthening cyber preparedness, understanding supply chain dependencies and ensuring continuity plans are regularly tested and updated. It also means recognising that many of today’s risks are connected and cannot be managed in isolation.
In an increasingly volatile world, resilience is no longer just about surviving disruption. It is about building the capability to recover faster, adapt sooner and compete more effectively than the market around you.
About the author
Sue Newton is the GB food and beverage leader for WTW, a global advisory, broking and solutions company.
