Food & Beverage’s Cyber Challenge
Digitalisation is revolutionising how companies operate, and driving business leaders to think differently. The pace of technological change is increasing, and dramatically transforming the global business environment. At the same time, while traditional risks may be reduced, the potential cyber and technology exposures that businesses face continue to expand, presenting businesses with the possibility of substantial economic losses.
Marsh’s latest research was presented in The Changing Face of Cyber Claims report, which leverages insights gathered from Marsh’s claims data and from the data, experience, and expertise from Wavestone and CMS, to look at practical ways to manage and mitigate cyber risk and claims.
In these industry deep-dives, we gather the key findings from a number of key industries, each one impacted by cyber risk in its own, unique way.
A Fast & Furious Industry
The food and beverage industry is highly competitive and focused on introducing new products and concepts frequently and fast. While new products may be variations on existing products, a fair number of these new products truly have never been seen before. Also new concepts such as meal kits and food delivery are increasing in popularity. Data from market research allows for ever an more granular understanding of consumer needs. Consumers will typically notice the presence of brands as well through e-commerce and on social media, as data-driven marketing allows food and beverage companies to better penetrate target segments.
On the production side, improved supply chain processes and streamlined production due to the Industry 4.0 trend help companies to be ever more efficient, improving margins as well as product quality. The food and beverage industry has truly embraced digital transformation, as it allows manufacturers in this sector to address many of their traditional pain points, such as product safety and compliance.
The changing face of Food & Beverage
- The food supply chain continues to require all players to adhere to strict operational practices to ensure food safety and quality.
- The circular economy has companies striving to systematically reduce waste by retaining more of the value of food and beverage supplies.
- E-commerce is taking off in the food and beverage industry. Meanwhile, customers are demanding increasingly faster delivery.
- Increased demands from stakeholders on products, service and profitability require more efficient production and supply chains.
Data-driven analytics & processes means greater cyber exposure
Food and beverage companies have quickly adopted digital technologies such as social media and big data analytics to better understand the needs of their customers. At the same time, other digital innovations boost production processes and supply chains. The reliance on data has increased, both to boost marketing insights as well as a time-to-market.
Meanwhile, product quality requirements remain high, meaning that data in both marketing as well as production in the food and beverage sector is of vital importance.
Critical data such as personal data for marketing purposes or intellectual property is often the target of hackers and competitors alike to get an advantage in this cut-throat market.
Meanwhile, digital production processes are confronted with new risks of interruption of facilities or corrupted data feeding into production processes.
The result of threats such as ransomware shutting down a production facility can be devastating for the bottom line of food and beverage companies. Likewise, incorrect production information may lead to product recalls or in the worst case, injuries or fatalities with consumers.