The food and drinks industry is losing confidence in its ability to manage risk in an increasingly volatile environment marked by surging litigation, according to a report from broker Willis.

The Global Food, Beverage and Agriculture Risk Report says only 62% of organisations feel somewhat or completely in control of their risks, down from 75% two years ago and 89% in 2023.

Food safety and health concerns driven by ultra-processed foods have emerged as the fastest-growing risk facing the industry: 45% of surveyed companies say it is their top threat, up from 29% in 2024.

“Growing scrutiny of food and drink ingredients has led to class actions comparing the harms caused by ultra-processed foods to tobacco and accusing food companies of knowingly making them addictive,” the report says. “This appears to have caused a spike in fears about the potential liabilities and costs the sector could face.”

Supply chain disruption driven by geopolitical tensions, tariffs and trade disputes remains a major concern, with 44% of respondents citing it as their top risk, compared with 40% in 2024.

Cyber risk is also growing: 40% of respondents now rank it among their leading internal threats, up from 32% previously.

Willis Pacific food and beverage industry leader Ian Poustie says cyberattacks are increasingly targeting critical operational system that “keep food and beverage businesses moving – from production lines to storage, logistics and distribution. For Australian businesses operating with perishable goods and tight supply chains, even a short outage can have immediate consequences for product quality, customer delivery and revenue.”

The survey also found companies are investing more heavily in resilience, with 83% reporting they have formal business continuity plans, up from 78% in the previous survey.

The report says 84% of respondents expect environmental, social and governance risks to remain a priority over the next two years as drought, flooding, water stress and land degradation increasingly affect agricultural production.