27 November 2019

Don’t let a computer failure bin grape harvest profits

From venerable traditions Australia’s wine industry has embraced the productivity gains and cost savings achieved by technology. But what happens when a system fails?Robotics and increased automation provide a number of advantages to wine industry businesses, including productivity gains, cost savings in labour, energy and resources, and minimising incidents of human error in the wine making process.

These technologies provide greater control over the wine making process and the consistency of the end product. This is an important consideration as today’s consumers expect quality product offerings year on year in spite of variations in conditions, particularly weather.

Processing harvested grapes requires careful management of transporting the harvested grapes to site for processing and quickly through crushing, chilling and fermentation, with winemakers using computer assisted systems to direct process streams, crushing speeds and fermentation schedules.

“With so much at stake wine makers need to consider further the severe impact of their systems and infrastructure being accessed and manipulated or damaged."

Gallagher Head of Food Production Stephen Elms

These systems can also control key variables such as screw feeders, pumps, presses, agitators and temperature during different phases of the wine making process. And, of course, wineries use automated equipment for, cleaning and sterilising, bottling, inventory and order tracking, palletising and depalletising and managing customer databases and supplier details.

But according to the 2017 RSM Food and Beverage Monitor survey of the 345 companies in Australia and other countries, while 33% had suffered a cyber breach only 21% had addressed cyber risks in their operations.


Severe impact

“With so much at stake wine makers need to consider further the severe impact of their systems and infrastructure being accessed and manipulated or damaged," says Gallagher Head of Food Production Stephen Elms.

"Typically, margins for producers are low in the wine market and any potential issue will most certainly impact the company's bottom lines if it is not addressed."

An emergency response plan or business resilience plan should be established to provide clarity and direction for ‘what if’ scenarios and to focus on identifying damage limitation requirements and assigning responsibilities for handling them to key people in the group.

“I’d recommend anyone relying on computerised systems to seriously consider cyber risk insurance, which should include enough cover to provide loss of profit coverage,” Elms advises.

Cyber risk insurance protects your business if one of your automated systems fails or you are targeted by a hacker looking to steal your customer data, for example, by covering exposures like business interruption, loss of data, legal expenses and data recovery.

Product recall liability provides cover for the costs associated with a product recall including

  • cover for the costs associated with the withdrawal of products off shelves
  • cover for the costs associated with transporting stock from retail stores or distribution centres back to site
  • other benefits such as expert assistance in managing your brand reputation in the public domain.

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To the extent that any material in this document may be considered advice, it does not take into account your objectives, needs or financial situation. You should consider whether the advice is appropriate for you and review any relevant Product Disclosure Statement and policy wording before taking out an insurance policy.