The food and beverage sector is one of the main drivers of industry in Spain. With exports totalling €30,342 million, it accounted for 2.6% of national GDP in 2019, production reaching €119,224 million, according to data from the Spanish Federation of Food and Beverage Industries (FIAB).
Coronavirus brings growth to a halt after six positive years
COVID-19 led to a break in a six-year cycle of continuous growth. Even so, the data show it to be the industrial sector that has best supported the effects of the pandemic, with a decline less than that of manufacturing and the economy as a whole. As a result of containment measures in response to the spread of coronavirus, real production in the sector totalled €129,854 million, a decrease of 5.3% compared to 2019.
However, these figures do not reflect the important role played by the sector in society since the outbreak of the pandemic. It intensified its activity in order to supply the population, despite the general atmosphere of uncertainty, especially in the first few months. The good work done throughout the food industry during the crisis has boosted its reputation, although it is well known that confidence achieved over time can be lost overnight. Unfortunately, cases of food poisoning, the withdrawal of contaminated batches, and products that did not meet the relevant safety requirements have often featured in the media.
Any unforeseen event can cause serious damage to a company because of its close links with consumer safety. Protecting public health and preventing damage to third parties are major objectives for a sensitive sector that will always be strictly controlled.
Step one: preventive measures by companies themselves
In order to protect consumers and respond quickly to any situation, food and beverage companies must first take appropriate precautions to protect themselves.
As well as the potential risks that may affect most sectors, the food industry must also allow for incidents related to public health, environmental liability, claims by third-parties and even product withdrawal, among others. This implies very specific insurance needs and companies are often in the difficult position of not finding a solution that meets their requirements.
Solutions for different scenarios
The insurance sector is therefore working to find suitable solutions for different scenarios. Thanks to our experience and knowledge of the problems, cover can be provided for different situations, including the withdrawal of a product. In most cases, when this occurs, companies only have damage to third parties covered in traditional civil liability policies, the withdrawal of a product sometimes being included. This guarantee basically includes logistical expenses and transport, but it does not reflect all the time and effort invested in making the product itself (raw materials or personnel costs).
Having an insurance solution that covers all damage and financial contingencies arising from a defective or faulty product, from third-party claims to the value of the product itself, can be a great relief for companies.
This is not a common solution in the market, but it is one that can bring about a revolution in insurance for the food industry, enabling it to overcome one of its main challenges: protecting not only the company’s customers, but also its products, its reputation and its brand positioning.