Food & beverages industry vulnerable to downside risks in 2022

An industry report from global credit insurance provider Atradius reveals major growth drivers and constraints in the food & beverages industry across multiple markets worldwide.

A number of downside risks are expected to pose major challenges to the global food & beverages sector this year. Sharp increases in commodity and energy prices, labour shortages, transport issues and the ongoing spread of the coronavirus pandemic could jeopardise the profitability of major industry subsectors over the coming months.

In addition, consumer habits are changing as the end-client increasingly demands full transparency about their ingredients, production processes, and supply chain. All this could subsequently strain profit margins within a fiercely competitive industry, where the bargaining power of major retailers and discounters is very strong.

However, as highlighted by Atradius in its latest food & beverages industry trends report, the global food & beverages industry has various drivers that can unlock potential growth this year.

These are the non-cyclical nature of the industry, a growing number of middle-income consumers in emerging economies who are spending more money on high than low value-added goods and the increasing use of technology to engineer solutions for global food supply, are all contributing to growth. However, these factors could highly likely turn the surge in demand into a snack rather than a full meal.

The overall picture that emerges from the report provides some first insight into the overall trends in the global food & beverages industry. Variations among the countries covered in the report, ranging from Australia, Canada, Indonesia, many European countries and the US are wide and businesses should be aware of this in their regular trade activities with the industry.