The one-two punch of geopolitical tensions and climate anomalies has put unprecedented pressure on global food supply chains. Attacks on ships transiting the Red Sea have further strained supply chains that were already reeling from the war in Ukraine, where attacks in key wheat-producing regions have increased prices and created shortages of staple products like bread and pasta. This turbulence has created uncertainty in global markets, driving up the price of essential pantry goods.

At the same time, supply chains have been disrupted by adverse weather events across the globe, including heatwaves and wildfires in countries such as Italy, Chile and Colombia, causing substantial agricultural damage and strained food production. A recent surge in rice prices exemplifies the far-reaching consequences of climate change. India has imposed export restrictions on non-basmati rice, causing prices to skyrocket by as much as 61% in some regions. Meanwhile, the onset of an El Niño pattern has further curtailed agricultural output across Asia, impacting the production of not only rice but also wheat and palm oil.

It’s clear that instability has become the new norm in the global food supply chain, a reality that underscores the urgent need for a more agile and resilient approach to supply chain management. To mitigate these risks, companies need to diversify their sourcing and logistics strategies, reducing dependence on volatile regions. Digital supply chain tools, such as real-time tracking and predictive analytics, have become essential for proactive risk management. These technologies enable companies to anticipate disruptions and reconfigure their supply chains dynamically, enhancing transparency and resilience. Additionally, by building stronger relationships with a diverse range of suppliers and logistics partners, companies can access alternatives when usual channels are disrupted.

With real-time data sharing capabilities and predictive analytics, multi-enterprise supply chain platforms allow companies to swiftly respond to these challenges. The right platform can enable companies to quickly adapt to changing circumstances, such as finding alternative suppliers or rerouting shipments in response to geopolitical sanctions or natural disasters. These capabilities are important for all businesses, but a centralized system is especially valuable for food and beverage retailers.

The technology helps food and beverage retailers mitigate the impact of disruptions by enhancing visibility throughout the supply chain. A multi-enterprise platform acts as a control tower, providing real-time insights and analytics that are key to assessing and responding swiftly to disruptions.

In addition to gearing up to make the supply chain more resilient and agile, retailers and brands must consider the evolving consumer expectations around sustainability and ethical sourcing. Buyers are increasingly concerned about the environmental impact of their food choices. Moreover, regulatory changes aimed at food safety and environmental impact are demanding increased vigilance and adaptability from companies. For instance, the EU's new deforestation regulation requires companies to prove that commodities like coffee, palm oil and cocoa aren’t linked to deforestation. Changing consumer preferences and regulations have introduced additional complexity to supply chains, necessitating that food and beverage retailers invest in new traceability tools.

The heightened focus on sustainability is particularly consequential for food and beverage retailers, where confirming the nth-tier origins of ingredients like spices is especially demanding. Companies must undertake a thorough validation of all upstream suppliers to comply with regulations concerning specific areas like China’s Uyghur region. Efficient digital tools are required to conduct all necessary audits and certifications to ensure that standards of social and environmental sustainability are met at every stage in the supply chain.

If recent disruptions have taught supply chain managers anything, it’s to expect the unexpected. Disruptions in the Red Sea, for one, are predicted to continue well into 2024, with no signs of the attacks abating. In this volatile environment, multi-enterprise platforms offer invaluable resources, providing companies with the means to manage uncertainty, maintain sustainability efforts, and guarantee the continuous delivery of staple foods that consumers depend on.

Eric Linxwiler is senior vice president of TradeBeyond.