The 2022 disruption of Abbott Nutrition’s baby formula plant in Sturgis, Michigan demonstrates the
impact of exponential risks. At the start of 2022, the industry was under production pressure due
to materials shortages and pandemic-related supply chain issues.
By May 2022, 43% of formula products were out of stock nationwide.1 In June, an extreme weather event
hit the Sturgis facility, forcing it offline.
The failure of a single plant quickly became a national challenge for families and the Biden administration,
as out of stock rates hit 90% or more in 10 U.S. states. Abbott faced compounding risks with financial
impacts for customers, suppliers, commercial real estate companies, insurers, and banks.
“More and more management teams want to understand their exposure to extreme weather risk — across their operations and right down to the individual facility level. By bringing together historical and predictive data streams with natural catastrophe risk modeling, organizations can build resilience and make better business planning decisions that protect and enhance value.”
– Robert Muir-Wood
Chief Risk Officer, Moody’s RMS
“Investors and operators who can better anticipate developments in commercial real estate by piecing together previously separate data sets on occupancy rates, deal flow, and energy efficiency standards will be well-placed to capitalize — while those who are caught off guard risk losing out on financial value.”
– Luis Amador
General Manager, Commercial Real Estate, Moody’s Analytics
