Business disruptions are costing each ‘mid-size’ UK food & beverage (F&B) company an average of £151,000 a year, according to the findings of a new report.
80% of food and beverage companies said they have experienced significant disruptions to their supply chain, with a third claiming to have suffered between one and five disturbances in the last 12 months alone.
The top three common causes include product quality incidents (68%), adverse weather (49%) and unplanned IT outages (34%). The average length of disruption experienced by the F&B companies surveyed is three weeks.
The research was carried out by Zurich Insurance for a report called ‘The Weakest Link: UK Plc’s Supply Chain’.
F&B companies that took part in the study reported an average of 41 critical suppliers, with the majority (75%) describing their supply chains to be either very important or critical to their business.
Many said that supply chain disruptions led directly to a loss of orders, reputational damage and increased operating costs.
Of all five major industry sectors surveyed by Zurich, food and beverage businesses suffered greater losses in sales from supply chain problems than any other. It calculates that this represents an average hit of £151,000 per company.
Dave Carey, head of corporate insurance at Zurich, said the research showed mid-corporate businesses remain to severe supply chain disruptions that can dramatically affect their bottom line.
“A well-managed and maintained supply chain is essential to the efficient workings of a company,” he said. “However, the failure to prepare for the worse scenarios can have devastating consequences that resonate across a business, regardless of size.