Nine out of ten beverage manufacturers reported ‘significant’ supplier issues in the last 12 months
To explore these challenges in more depth, Lloyd’s Register conducted its own survey of 100 senior executives in the beverage sector. The results are a wakeup call to all sectors – shining a light on both the cause and effect of what threatens to become a crisis of confidence in suppliers
Detailed in the LR report – Confidence and Supply Risk in the Beverage Sector – food fraud was found to be almost universal across the industry. An astonishing 97% of respondents reported having been affected in the past 12 months, with 80% agreeing that food fraud is a growing concern for their business.
More worryingly, issues with food fraud appear to be only part of the problem. Nine out of ten beverage manufacturers reported ‘significant’ supplier issues in the last 12 months - and these factors are clearly undermining confidence. Just one in five (22%) of those asked said they were ‘very confident’ that suppliers are meeting food safety standards, while 70% confirmed that they have been forced to change at least one of their suppliers in the past 12 months.
The report does, however, clearly signpost where beverage manufacturers should focus, in order that confidence can be re-built. Just 32% of respondents confirmed that suppliers are checked against a recognised Global Food Safety Initiative (GFSI) benchmark standard. Almost one in five (19%) admitted that either no food safety checks are made as part of a sourcing decision, or that meeting regulatory requirements is considered sufficient.
Do we need to more attention on standards? The answer is clearly yes and endorsing certification to a GFSI benchmark standard is a solid first step. But with its evidence of endemic levels of food fraud, I would argue that this report shows the need for manufacturers to be much more flexible in their approach to risk management. Food fraud is just one example of how complex and how dynamic the risk environment for food and drink manufacturers has become. When it comes to managing those risks, not all suppliers are created equal – it demands a more customised approach.