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Here’s what you need to know about the upcoming food processing revolution and how to cope with the risk that comes along with it.
During the pandemic, many leisure and hospitality businesses were forced to shut their doors, leading to a loss of 7.7 million industry jobs.1 Many of these were in food service, retail, food manufacturing, and other supportive industry functions. In contrast, now as the country opens up and service and food product functions are back in demand, food business owners and operators say it’s nearly impossible to find good help.
Without an adequate number of workers, the food industry is looking to other options, like artificial intelligence, or AI. AI can help accelerate food processes alongside a rapidly growing global demand for food. Benefits include:
Churning out a consistent-looking, -tasting, and -textured product is a chief goal of food processing operations. While 90% of product sorting worldwide was still done by humans at the end of the 20th century, today’s AI capabilities far surpass what humans can do on an assembly line.2
Food processing AI can measure food moisture levels and even smells with greater consistency than humans. AI cameras are taught to grade the marbling of a ribeye based on its fat content by comparing a live steak on the assembly line to photos of previously graded steaks. Nuts like almonds and pistachios can be similarly graded by AI.
AI sensors like optical florescent imaging and ultrasonic sensing technology are now employed to recognize food residue on equipment to prevent contamination of an entire product line. AI technology is also being used to ensure workers have their PPE, to do temperature checks, and grade food cleanliness, similar to quality grading.
Getting the Most Out of AI While Reducing Your Risk
Despite the enormous potential, AI comes with an increase in risk as well.
In April, Nestlé-owned BlueTriton suffered a temporary loss of plant operations after an AI-powered vehicle that transports pallets of water bottles caught fire while recharging. Nestlé subsequently grounded all 51 vehicles across its plants.3
Cyber breaches are another risk to employing AI in food processing. As soon as your plant is dependent on AI, ransomware is suddenly possible. When machines were operated manually, a breach only affected your data. With AI, your entire operation could be tackled by a remote bad actor.
What Can Your Business Do to Reduce Risk When Using AI?
Risk mitigation is possible. The first step is to create a path to organizational resilience across the processing plant. Making sure your IT department understands your use of AI and assesses the risk of data breach or the potential for equipment hacking and has a plan to prevent them both. Once the IT team is aware of the increased risk, put an operational plan in place for loss or downtime of equipment. Is it possible to still get the job done manually? What does AI-caused business interruption look like?
Secondly, offload your business’s risk to the right insurance coverage. Make sure your Product Liability, General Liability, Property Policy, Cyber, and more cover the AI you’re employing. If they don’t, add them. Find out what the trigger threshold would be for a claim.
AI also has the potential to reduce your coverage costs because it can be used to conduct predictive maintenance or determine when equipment needs to be serviced before it breaks down. In some cases, underwriters may ask to access a food processor’s refrigeration temperature sensors to confirm the equipment’s viability in real time. This type of information access has the ability to reduce coverage costs.
About the Authors:
Ken Kessler is an executive vice president with HUB International in Los Angeles. He has more than 45 years of insurance brokerage and consulting experience, and is nationally recognized for his expertise in the meat, food processing/distribution, and environmental industries. Currently, Kessler is chief marketing officer for the L.A. Campus. Before joining HUB International, Kessler served as president of Sander A. Kessler & Associates, one of the leading brokers in the Southern California marketplace. He had a broad range of responsibilities, including managing top-level insurance carrier relationships and overseeing sales and marketing. HUB acquired Kessler in 2011. Ken has a vast knowledge of workers’ compensation and is a member of HUB‘s new California Risk Management Practice Group, which will advise on loss-sensitive programs as well as other programs. He is an active participant on national advisory councils for major carriers. He has taught classes in workers’ compensation, written articles about risk-management issues, spoken at various trade associations, and taught classes for CPAs and attorneys.
David Laks is vice president, risk control services manager for Eastern Canada, for global insurance brokerage HUB International’s Risk Services team. He brings 30 years of experience in risk-control consulting. He develops and implements solutions in the areas of property loss control, building envelop analysis, risk mitigation, construction management, training, business continuity, and regulatory compliance. Prior to joining HUB, Laks was the loss control manager with a Fortune 100 food manufacturing company responsible for all aspects of property risk management. Laks leads HUB’s Cannabis Risk Service technical group. Currently, he is a member of the National Fire Protection Association (NFPA), Professional Engineers of Ontario (PEO), Risk and Insurance Management Society (RIMS), Society of Fire Protection Engineers (SFPE)–Ontario Chapter, and the Roof Consultants Institute (RCI).