Australia’s food manufacturing sector is facing an increasingly complex risk environment, pushing resilience and risk management from the factory floor into the boardroom.
According to Lockton’s report Risks for Food Manufacturers and Producers: Why Risk Management Is Now a Boardroom Issue, challenges such as product contamination, supply chain disruption, and cyber exposure have made risk management a strategic priority for producers across bakery, confectionery, frozen food, and ready-meal categories.
“The sector has always been competitive, but the risk landscape has become more complex,” the report stated. It noted that shifting consumer preferences, climate change, and technological dependence are forcing companies to manage “more moving parts than ever before.”
Food recalls remain among the industry’s most serious threats. Lockton cited data from Food Standards Australia New Zealand (FSANZ), which recorded 95 recalls in 2024 – many involving ready-to-eat meals and confectionery. Undeclared allergens, mislabelling, and improper storage were identified as major causes of recalls, each carrying significant financial and reputational consequences.
Lockton advised producers to strengthen traceability systems and conduct regular supplier audits, warning that “traceability systems, strong supplier controls, and HACCP protocols are no longer optional – they’re essential.”
Supply chain fragility is another major concern. The report noted that wheat imports, packaging delays, and transport issues for frozen meals have disrupted operations across Australia. It recommended dual-sourcing critical inputs and mapping entire supply chains to identify bottlenecks and secure essential ingredients from multiple suppliers.
Lockton also highlighted the importance of preventative maintenance, workplace safety, and environmental responsibility. Equipment breakdowns can halt production and “wipe out profitability,” while improper waste disposal or emissions may attract regulatory penalties and damage community trust.
Cyber risks are emerging as a growing threat, with IT systems now controlling temperature, storage, and even fire suppression. “A cyber breach in these systems could spoil stock or halt operations,” the report warned.
Ultimately, Lockton emphasised that “risk management is not about slowing growth; it’s about protecting it.” When risks are strategically managed, producers can safeguard margins, protect their brands, and negotiate stronger commercial contracts.
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