Business on the Edge 2024

Value chain implications of climate hazards Tropical cyclones and extreme heat cause power outages that halt production lines in processing and packaging facilities, resulting in operational downtime. Extreme heat and moisture may change the physicochemical properties of packaging, posing a threat to consumer health. Water stress limits availability of water for food processing which may force investment in alternative water sources.Extreme heat undermines the efficiency of cold chain transportation, resulting in spoilage of perishable goods. Climate hazards disrupt transportation networks, delaying food supplies and increasing logistics costs due to detours and additional labour. Flooding damages storage facilities and introduces harmful contaminants and pathogens into food storage areas, posing serious health risks to consumers.Flooding and extreme heat affect marketability by reducing food’s shelf life and nutritional value, ultimately leading to increased food waste as unsold products are discarded. Extreme heat may shift consumer preferences and purchasing behaviour towards lighter, more hydrating food and beverages, prompting brands to adjust product offerings accordingly. Climate hazards affect the availability and quality of certain products and when combined with price volatility, they discourage consumers, ultimately leading to decreased demand.Processing & packaging Logistics & distribution Sales & consumer preferences Recommendations Avoid economic lossIncrease revenue, cost savings & sustainability Protect communities & ecosystems Enhance resilience Capitalize on opportunities Shape collaborative outcomes Invest in efficiency and waste minimization technologies. For example: Early warning systems and temperature and humidity s ensors to anticipate and mitigate food spoilage. Energy-efficient infrastructure to support temperature-c ontrolled storage and help reduce GHG emissions. Renewable energy-powered devices to decrease dependence on fossil fuels. Strengthen early warning systems and disaster-resistant infrastructure. Use climate-resilience practices such as storing goods on pallets and building warehouses with sustainable standards. Install rainwater collection systems and maintain storm drains regularly.Adjust energy usage to real needs. Lowering temperatures in freezers can maintain frozen food safety and quality, lowering energy costs within supply chains. Drive portfolio reinvention through alternative ingredients. Plant-based and novel food bio-technologies such as precision fermentation and cell-cultivation are advancing fast and, once at scale, will be able to provide radically decarbonized and consistent ingredient solutions for consumer packaged goods. Collaborate throughout the value chain for new market opportunities. Engaging with producers, suppliers, bio-innovation start-ups and retailers drives innovation, supply chain resilience and mutually beneficial solutions to climate issuesFoster genuine partnerships. Work with local communities to learn from grassroots innovations. This collaboration enhances product development, helps meet community needs and empowers local solutions. Collaborate on data use. Partner with all stakeholders to collect and share climate hazard data, to inform new insurance and loan products for the food and beverages industry. Adopt blockchain. Blockchain technologies can create a transparent, traceable and trustworthy supply chain. Benefits include accurate labelling, fraud reduction, product origin details, removing intermediaries and enabling quick recall responses, enhancing food system integrity.Fluvial flooding Extreme heat Wildfire Tropical cyclone Coastal flooding Water stress Drought Business on the Edge: Building Industry Resilience to Climate Hazards 52