• Barbara Guignard, Principal at Efficio


• 11.02.2025 03:00 pm
#FoodSupplyChains #Resilience

In October 2024, Hurricane Milton devastated Florida’s Gulf Coast, leaving a trail of destruction that significantly disrupted the U.S. food supply chain. Among the most affected was the citrus industry, with Florida's orange crops suffering from extensive damage. This event, combined with pre-existing challenges such as disease and climate variability, led to a 42% increase in retail prices for orange juice concentrate in the U.S. and a 25% rise in fresh orange juice prices in the U.K.

The cascading effects extended beyond juice production, impacting fresh fruit availability, food and beverage manufacturing, and agricultural infrastructure. Hurricane Milton’s aftermath starkly highlighted the vulnerabilities in global food supply chains, underscoring the urgency for businesses to adopt resilient and sustainable practices.

To address the growing frequency of such crises, businesses must implement forward-thinking strategies to strengthen their supply chains. Below are several proven approaches:

Developing alternative supplier networks

Global food companies like McDonald’s have successfully diversified their supplier base, working with multiple potato producers in each country to safeguard against localized disruptions. In general, a regular market assessment to track new suppliers, mergers, and acquisitions can further enhance supply chain resilience.

Exploring Alternative Products

Companies such as Subway and KFC have demonstrated the value of flexibility in menu offerings. During a chicken supply shortage caused by avian flu, Subway introduced turkey-based options, while KFC diversified its menu with seafood and pork products. These adaptive measures helped maintain customer satisfaction and minimize revenue loss.

Proactive Consumer Communication

Transparency is essential during supply shortages. For instance, Huy Fong Foods, the maker of Sriracha hot sauce, proactively announced a production halt in May 2024 due to a severe chili pepper shortage caused by drought in Mexico. Such communication helps manage customer expectations and builds trust.

Relocating Production

Barilla provides an example of adapting to climate-related challenges by relocating durum wheat production to regions with more favourable conditions, such as Greece and Turkey. This strategic shift mitigated climate risks while ensuring a stable supply of raw materials.

Strengthening Supplier Relationships

Long-term contracts, transparent volume forecasting, and collaborative problem-solving enhance trust and reliability. Regular engagement with suppliers on issues like climate change and resource management fosters partnerships that prioritize shared resilience goals.

Sustainable approach to climate change

Nowadays, big groups invest a lot in more sustainable approaches in general with their suppliers, promoting regenerative agriculture.

What is Regenerative Agriculture?

Regenerative agriculture is a holistic farming approach that restores soil health, enhances biodiversity, and improves ecosystem resilience. By emphasizing practices such as cover cropping, crop diversification, and minimal soil disturbance, this method offers environmental, economic, and social benefits.

For example, companies like Nestlé and PepsiCo have invested heavily in regenerative agriculture initiatives. Nestlé’s Plan 2030 promotes sustainable farming practices, while PepsiCo’s Pep+ program aims to improve water-use efficiency by 25% in high-risk areas by 2025. These efforts highlight the critical role of corporate leadership in driving agricultural sustainability.

The aftermath of Hurricane Milton serves as a wake-up call for industries reliant on vulnerable agricultural supply chains. Companies must prioritize sustainability, invest in alternative supply and product strategies, and foster partnerships with suppliers to navigate disruptions effectively. By adopting regenerative agriculture and supporting innovations like improved water management and shared best practices, businesses can ensure both environmental stewardship and long-term profitability.

As extreme weather events become increasingly common, the integration of these strategies is not just prudent—it is imperative for the future stability of global food systems.