In an era of climate extremes, the intricate environmental repercussions are having direct implications for businesses. From the extremely cold European winter of 2009-2010 to July 2023 being the hottest month ever recorded since 1880, with the high probability that the rest of 2023 will replace 2016 as the world’s hottest year topping the last 8 years (all of which were individually recorded as the hottest years on record). Arguably this VUCA (Volatile, Uncertain, Complex and Ambiguous) climate environment requires businesses to treat climate change as a fundamental business challenge.

European cities this year introduced cooling stations as the continent warms almost twice as fast as the global average, leading officials in Rome to mobilise task forces to hand out water in order to reduce heat stress on the populus. Meanwhile across the Atlantic, temperatures averaged 6-12 degrees warmer than normal in the US Northeast. The US Southwest faced extreme heat for much of July, with Phoenix experiencing 31 consecutive days above 110 degrees F (43.3 degrees C). There is a high probability that your Food and Beverage Sector business has been affected by this global Climate Change.

Climate Change is poised to reshape the business landscape by altering temperature and weather patterns, potentially straying from conventional seasonal norms. These shifts will, in turn, influence the scale, trajectory and character of consumer demand, subsequently impacting the entire supply chain. To effectively address the full spectrum of climate-related challenges, from localised sporadic daily variations to more frequent extreme events, business leaders must gain a comprehensive understanding of the ‘how,’ ‘where,’ ‘what,’ ‘why,’ and ‘when’ behind these climate risks. Armed with this knowledge they can craft and implement strategies best suited to navigate their evolving market environment.

To accomplish this business leaders must adopt a holistic approach, addressing both short-term and long-term climate fluctuations with the same strategic acumen as any other critical threat or growth opportunity. Consider it in a similar light to assessing the impact of a supply chain disruption or the consequences of a prolonged failure to grasp shifting consumer market demands. Or from a standpoint of seizing opportunities, imagine the advantages of precisely delivering the right product in the correct quantity, at the optimal location, exactly when your competitors falter.

In the dynamic landscape of the Food and Beverage industry, vulnerabilities stemming from Climate Change can transform into opportunities for innovative competitors. It is evident that maintaining the status quo is not a sustainable strategy, as complacency and incrementalism expose businesses to substantial and precarious risks. Betting on the assumption that the future will closely resemble the present is a high-stakes gamble yet whilst opinions may vary among individual managers regarding the immediacy and magnitude of Climate Change’s impact, one thing is certain: the climate and the consumer market environment it influences have changed. Decisions related to Climate Change carry a significant element of business risk, as inaction or inadequate planning could lead to substantial financial setbacks.

Strengthening business strategy hinges in part on forming strategic alliances with data and analytics providers and integrating value-added services. These services encompass forward-looking risk modelling for supply chains and an in-depth understanding of consumer demand behaviours. Such partnerships empower companies to navigate the complexities of the modern business landscape with enhanced strategic prowess.

Caerus offers precision in climate-ready demand forecasting by analysing and assessing all relevant impact factors, including temperature, at every sales location along with your historical sales data. Gaea’s cutting-edge Large Geotemporal Model (LGM) AI ensures business leaders can gain instant insights into both short-term climate variance impacts and long-term trends in consumer demand within their market environment. This empowers them to refine their antifragility strategies and transform climate variability into predictable profitability at the touch of a button.

For further discussion on the topics covered in this article, don’t hesitate to contact the Gaea team: contact@gaea.software.