There are more than 800 food-related processing and manufacturing companies doing business in Northeast Ohio. The products and ingredients produced by these companies are shipped all over the world. Additionally, consumers are purchasing food products grown and processed globally.
Leo G. Walter III, executive vice president of Aon Risk Services Inc., says the agribusiness and food processing industries have their own unique risks that require a special approach to mitigate.
“As your advocate, a risk management firm can not only help you identify those exposures, but it can help you develop the strategic business solutions to manage them so you can devote your resources to growing your business,” says Walter.
Smart Business spoke to Walter about how companies in these fields can mitigate their exposures to risk, and why it can have a huge effect on their success.
How can a risk management partner help an agribusiness or food-related company?
Every industry faces traditional and nontraditional risks. By utilizing perspective on the agribusiness and food system industry, a risk management partner can show you how nontraditional risks impact every aspect of your organization, from corporate compliance to information technology to human resources. Then, you can effectively and proactively reduce volatility, stabilize earnings and control pre- and post-loss risk exposures.
An enterprise-wide risk management and audit process provides an organized and thorough approach to risk identification and assessment. It can help you target nontraditional risks unique to your business such as the impact of a crisis on your brand and reputation, perception and acceptance of genetically engineered food worldwide, and trade policies and restrictions.
How can manufacturers, processors and distributors manage the impact of globalization?
Globalization has changed the way we feed the world. National and regional boundaries have vanished. Produce grown in Puerto Rico is eaten in Kansas. Pigs from Canada are shipped to Iowa and processed in Missouri. Ranchers in Argentina export their beef to France. To succeed in a globalized environment, your organization must proactively manage areas of concern including import and export laws and trade restrictions, governmental and regulatory reforms, and genetically engineered food.
Changes in import and export laws can significantly affect your ability to conduct business overseas. As trade restrictions and government regulations evolve across a variety of issues, including the ability to sell genetically engineered food to certain regions, you face strategic and financial business risks.