Beyond Compliance: How Data Security Works in a Food ERP Solution?

Food and beverage companies rely on ERP systems as the digital backbone of operations, integrating everything from recipes and production to sales and finance. With such broad integration, ERP security is high-stakes. These systems house sensitive information: customer personal data, proprietary formulas, supplier contracts, and financial records, which make them attractive targets for cybercriminals. 

A breach or ransomware attack can halt production and distribution (for example, global meat processor JBS paid $11 million after a 2021 cyberattack shut down its plants). Beyond the immediate operational disruption, data security breaches in ERP carry heavy financial loss, legal penalties, and reputational damage. The average data breach now costs companies $4.45 million globally and can trigger regulatory fines of up to hundreds of millions. 

Apart from that, customers and business partners lose trust as well – 80% of consumers prefer to buy from companies with strong data protection. So, it’s pretty clear that, rather than just a concern, ERP cybersecurity is a critical business priority for CIOs, IT managers, and ERP buyers in food & beverage companies. 

In this blog, we’ll outline the core risks to ERP data, essential security features to look for, and best practices to protect your system, all tailored to the ERP for food & beverage context.

What is ERP Data Security?

ERP data security refers to the practices and technologies used to protect all digital information within an ERP system from unauthorized access, corruption, theft, or loss. In essence, it’s about safeguarding the confidentiality, integrity, and availability of your ERP data. 

It means ensuring only authorized personnel can view or change information (confidentiality), preventing tampering or errors from compromising data accuracy (integrity), and making sure the system and data remain accessible to authorized users when needed (availability). Implementing ERP security involves multiple layers: access controls, encryption, monitoring, backup, and policies that together keep the data safe throughout its lifecycle. 

For example, robust encryption and user authentication protect data confidentiality, while audit trails help maintain integrity by logging changes. Overall, ERP data security is a combination of tools (like encryption, firewalls, and anti-malware) and practices aimed at protecting the central nervous system of your company’s information.

Types of Data in Food ERP

An ERP in the food industry contains a wide variety of data, all of which requires protection. Effective data security management in ERP platforms starts with knowing what you’re securing. Key data types include:

• Customer Personal Data (PII): Your ERP stores customer names, contact details, order history, and payment information in sales and CRM modules. This data is highly sensitive under laws like GDPR and carries risks of identity theft if exposed. Protecting PII is essential to maintain customer trust and ensure compliance with privacy regulations.
• Financial Records: Accounting and finance modules hold general ledgers, invoices, accounts payable/receivable, and reports that reveal company performance and cash flows. If leaked or altered, this data could enable fraud, insider trading, or damage stakeholder confidence. Strict controls are critical to secure financial integrity.
• HR & Employee Data: HR modules manage personal info such as addresses, SSN/NIC, payroll, and benefits. Insider data like salaries or disciplinary records is especially sensitive. Unauthorized access could cause privacy breaches or conflicts, so ERP security must extend to HR data with role-based access and data masking.
• Recipes, Formulas, and Product Specs: In food and beverage, ERP systems store recipes, formulations, and process steps as core intellectual property. Leaks could erode market edge, while tampering with allergen or nutritional data could create safety risks.
• Supply Chain & Operations Data: Supplier contracts, pricing, QA records, schedules, and traceability data reveal sourcing strategies and cost structures. If altered or misused, they could disrupt supply or compromise recalls. Securing this data safeguards compliance and operational integrity.
• Compliance & Quality Records: Food firms must keep HACCP plans, sanitation logs, tests, and audits tamper-proof for regulators like the FDA. Unauthorized changes could mean legal penalties or product risks, making audit trails and backups vital.

Why ERP Data Security Matters in Food & Beverage?

Data security isn’t optional in the food industry; it’s mandatory for compliance and business survival. Companies must follow strict regulations like the Food Safety Modernization Act (FSMA) and FDA rules, which require reliable, tamper-proof record-keeping. For instance, the FDA’s FSMA traceability rule mandates certain producers maintain legible records, stored to prevent deterioration and available for prompt review. If ERP data, such as safety test results or batch records, were corrupted or inaccessible during a breach, you could fail an audit or struggle to execute a recall, leading to severe penalties.

Global privacy laws also apply. GDPR fines can reach €20 million or 4% of global turnover, while California’s CCPA allows $7,500 fines per intentional violation, plus lawsuits from individuals. A major ERP breach exposing customer or employee data can therefore result in multi-million-dollar penalties and litigation.

The reputational damage can be even more devastating. Food brands rely on public trust, and four out of five consumers prefer companies with strong data protection. Mishandling data drives customers away and erodes loyalty.

There’s also the risk to business continuity. If an ERP is compromised, production and supply chain operations can grind to a halt. With multiple suppliers, co-packers, distributors, and retailers sharing data through ERP, the attack surface is vast. A single weak link can trigger cascading breaches. In fact, over 35% of 2024 breaches stemmed from third-party or supply-chain compromises. The FBI also reported at least eight major food sector hacks in one year, including JBS.

Key ERP Security Challenges for Food & Beverage

Even with strong motivations to secure their ERPs, food and beverage companies face several challenges. Understanding these common ERP cybersecurity vulnerabilities is the first step to addressing them. We can group the challenges into three categories:

Governance & Access Challenges

Weak Documentation: Many food companies lack a documented ERP security policy, leaving responsibilities unclear, like who approves accounts or reviews logs. Without structure, tasks fall through the cracks, exposing systems.

Excessive Access Rights: Weak access management is common. Users accumulate permissions over time (“permission creep”), or IT grants admin rights to avoid roadblocks. A survey found 50% of employees hold excessive privileges, and 48% of ex-employees still had access months after leaving. Poor offboarding and weak segregation of duties (SoD), such as one person creating vendors and approving payments, heighten fraud risks.

Governance Mindset Gaps: A persistent myth is that on-premise ERPs are safer than cloud. In reality, cloud providers invest far more in security than most firms can. Misconceptions like this prevent upgrades or proper cloud safeguards, leaving systems exposed.

Human & Process Issues

Human Errors & Risky Behavior: Even with strong tech, people remain the weak link. Verizon found 82% of breaches involve the “human element” stolen credentials, phishing, errors, or misuse. In food manufacturing, untrained staff may mishandle data or fall for scams. Privileged users often bypass policies for convenience; in fact, 65% admit to breaking security rules, like reusing passwords or emailing sensitive reports.

Weak Incident Response: Many firms lack rehearsed ERP incident response plans. Without clarity on roles during a breach, responses become chaotic. IBM found that companies with IR teams and tested plans cut breach costs by 58%, yet many food firms skip cyber fire drills.

Unpatched Vulnerabilities: ERP flaws demand timely updates, but delays leave systems exposed. Ponemon found 60% of breaches stemmed from unpatched vulnerabilities. Legacy ERPs or outdated add-ons amplify this risk.

Technical & Emerging Threats

Rising Ransomware & Phishing: ERPs are prime cyberattack targets. Ransomware is escalating as Verizon reported a 13% annual jump, matching the prior five years combined. Nearly 70% of malware breaches now involve ransomware, crippling operations as in the JBS case. Phishing remains a common entry point, with attackers using AI-crafted messages that fool busy employees.

Customizations & Third-Party Risks: Food ERPs are often customized with quality modules, supplier EDI, or warehouse plugins. Each adds vulnerabilities if coding isn’t secure. Third-party software and APIs can be exploited; over 35% of breaches involve a third-party component. Vendor logins or VPN access are frequent weak spots, exposing supply-chain portals.

Lack of Monitoring: Legacy ERPs often lack robust logs or SIEM integration. Without real-time monitoring, breaches may go undetected for 200–300 days, letting attackers exfiltrate data unnoticed and complicating investigations.

Essential Security Features in a Food ERP

Given the challenges above, what features should a food & beverage company look for in an ERP to ensure data security in ERP operations? Whether you’re evaluating a new system or strengthening an existing one, ensure your solution provides these essential ERP security features. These core features directly address the risks we’ve identified:

Strong Encryption (Data at Rest & in Transit)

Enterprise-grade encryption is non-negotiable. The ERP should encrypt sensitive data at rest in the database (using robust algorithms like AES-256) and enforce TLS/SSL encryption in transit for all network communications. Strong encryption ensures that even if an attacker intercepts data or steals a backup, the information remains unreadable without the keys. This protects confidentiality as encrypted customer credit card numbers and personal data can’t be easily exposed.

Granular Access Controls & Role-Based Permissions

A food ERP should support very granular, role-based access control (RBAC) mechanisms so each user only accesses what they need. You should be able to define roles with fine-grained permissions on modules, forms, and even specific data fields. Granular controls help prevent the excessive access issue, where half the staff might otherwise have broad rights. Also, look for built-in segregation of duties (SoD) enforcement, as the system should allow you to define rules that prohibit one user from having conflicting permissions.

Audit Trails & Monitoring

A secure ERP must provide comprehensive audit trails, automatic logs of key actions like record creation, modification, or deletion, with details on who did what and when. These logs should be immutable or tamper-evident to meet standards such as the FDA’s 21 CFR Part 11. They help detect suspicious activity and provide forensic evidence during audits or incidents. Modern ERPs pair logging with monitoring tools or SIEM integration, enabling alerts for anomalies like repeated failed logins or unusual access patterns.

Data Masking & Tokenization

To reduce exposure of sensitive data, especially in test or training environments, look for masking or tokenization. Masking replaces real values with realistic substitutes (e.g., hiding full credit card numbers), while tokenization swaps data for secure reference codes stored in a vault. In production, this allows customer service staff to see only partial identifiers, minimizing insider risks. These techniques are encouraged by privacy laws and enable secure outsourcing or analytics without revealing actual identities.

Threat Detection & Intelligence

Beyond prevention, advanced ERPs include intrusion detection and anomaly monitoring. Machine learning may flag abnormal usage, such as midnight queries by a daytime account. Integration with threat intelligence feeds strengthens defenses by blocking known malicious IPs or malware signatures. Since many breaches go undetected for months, these capabilities shorten response time dramatically.

Secure Integrations & APIs

Food ERPs connect with suppliers, e-commerce, labs, and devices. Every integration must be secured through standards like OAuth 2.0, API keys, and encryption. Features such as IP whitelisting, input validation, sandboxing for plug-ins, and API monitoring are vital. With over 35% of breaches tied to third-party components, secure integrations close a major attack vector.

Disaster Recovery & Compliance Automation

Resilient ERPs safeguard business continuity through automated backups, failover systems, and geo-redundancy. For food companies, short recovery times are critical to avoid product losses. Compliance automation further reduces risk by embedding rules like role-based access, password policies, or electronic signatures into workflows. Certified vendors (SOC 2, ISO 27001) ensure best practices, while automated reporting eases audits and minimizes penalties.

Cloud-Based vs. On-Premise ERP Data Security

When you weigh cloud-based ERP data security against on-premise, the reality is clear: modern cloud ERP often delivers stronger protection than aging on-prem systems, provided you configure it correctly.

Cloud providers implement layered defenses that most food companies can’t match in-house: enterprise-grade data centers, strict physical access, encryption by default, multi-factor authentication (MFA), redundancy, and 24/7 monitoring by dedicated security teams. They also apply patches and updates quickly, reducing the window of exposure. 

With ERP cloud data security, you benefit from their expertise and scale, but you’re still responsible for secure configurations, strong passwords, and proper access controls. Most cloud breaches happen due to customer missteps, not provider failures.

On-premise ERPs give you complete control, but that means your IT team must manage servers, apply patches, monitor threats, and run backups. Without significant investment, this often leads to delayed updates, limited monitoring, and weaker physical security. Many food & beverage firms simply don’t have the budget or staff to match the layered security of cloud vendors.

For highly regulated data, hybrid deployments are a strong option: keep sensitive datasets in a private environment while leveraging cloud ERP for broader functions.

Aspect	Cloud ERP Security	On-Prem ERP Security
Infrastructure	Tier-IV data centers, redundancy, professional monitoring	Relies on in-house facilities and staff
Patching & Updates	Automatic, timely patches applied by vendor	The IT team responsible; often delayed
Encryption & Backup	Default encryption, geo-redundant backups, built-in disaster recovery	Must be configured manually; backups prone to gaps
Access & MFA	Supports SSO, MFA, conditional access	Requires own solutions; remote access riskier
Monitoring	Continuous monitoring and alerts from vendor SOC	Depends on in-house SIEM and staff availability
Compliance	Certified (SOC 2, ISO 27001) and offers audit reports	Full burden on your team

Best Practices for Securing ERP Data

Technology features alone won’t guarantee safety. How you manage and use the ERP is equally important. Here are ten actionable ERP security best practices to help food and beverage companies secure their ERP data. These best practices address the challenges discussed and are key considerations for ERP data security in day-to-day operations:

1. Develop a Documented ERP Security Strategy

Start with governance. Create a formal ERP-specific security policy that defines roles and responsibilities (who manages accounts, reviews logs, approves changes) and outlines controls like password standards, remote access rules, and data classification. Incorporate regulatory requirements (FSMA, GDPR, etc.) so compliance is baked in. A documented strategy ensures everyone, from IT to end users understands expectations and provides clear guidance for decisions, such as third-party access. Review it annually or after major changes like cloud migration. Treat ERP security like any other business-critical process: planned, owned, and continuously improved.

2. Perform Regular Risk Assessments & Audits

At least annually, audit your ERP for vulnerabilities and compliance gaps. Conduct technical scans, configuration reviews, and role audits to maintain least privilege. Engage experts for penetration tests to uncover flaws like default passwords or unpatched systems. Simulate incidents to test response readiness, and always include disaster recovery (DR) in your audits by verifying backup restoration. Assess vendor risks by reviewing certifications and breach history. Document findings and remediation steps, patch flaws, adjust firewall rules, and revoke unused accounts. Proactive audits catch issues before attackers or regulators do.

3. Implement Least-Privilege Access & Segregation of Duties

Revisit access rights with a zero-base review. Remove unused accounts, minimize permissions, and ensure segregation of duties (SoD). For example, no one should both create vendors and approve payments. Where overlaps are unavoidable, add supervisory reviews. Avoid generic accounts; each user should have a unique ID for traceability. Use privileged access management for admins, granting temporary elevated rights instead of permanent power. Only 5% of organizations enforce least privilege across the enterprise; strive to be in that elite group for mission-critical ERP systems.

4. Enforce Strong Authentication

Require multi-factor authentication (MFA) for all ERP logins, especially admin and remote accounts. MFA blocks attackers even if passwords are stolen. Enforce strong password policies, lengthy passphrases, complexity, rotation, and integrate ERP with single sign-on (SSO) to reduce reuse risks. For service accounts, use random long keys stored securely. Run periodic password audits and subscribe to breach notification services to catch exposed credentials. With 81% of breaches tied to weak or stolen passwords, strong authentication is one of the most effective safeguards.

5. Keep ERP Systems Updated

Apply ERP patches promptly, covering the application, database, OS, and middleware. Establish a regular cadence, prioritize critical updates, and maintain a test environment to reduce disruption fears. Subscribe to vendor advisories to stay ahead of emerging vulnerabilities. Plan timely upgrades; legacy versions lose support and become security liabilities. Don’t neglect firmware updates for servers and network devices. Staying current keeps you protected against known exploits.

6. Secure Integrations & Customizations

Inventory every integration and customization. Secure connections with VPN, TLS, and API keys, and limit integration account privileges. Use API gateways and monitoring to detect abnormal activity. Ensure custom code follows secure development practices and undergoes reviews to prevent flaws like SQL injection. Patch or revisit customizations after ERP upgrades to avoid new vulnerabilities. For IoT and shop-floor systems, secure endpoints and validate data inputs. Vet third-party add-ons and update them regularly. Remember: attackers often exploit overlooked integrations and scripts.

7. Monitor Continuously & Use Threat Intelligence

Aggregate ERP, database, OS, and network logs into a SIEM for real-time monitoring. Define alerts for suspicious events such as failed logins, off-hours access, or unauthorized role assignments. Modern ERPs may support user behavior analytics to flag anomalies. Use intrusion detection/prevention at the network layer. Supplement monitoring with threat intelligence feeds and industry sharing groups like FS-ISAC to stay updated on emerging attacks. IBM reports that automated detection significantly reduces breach costs and response times, making monitoring essential for resilience.

8. Train Employees & Build a Security Culture

Employees remain both the weakest link and the first line of defense. Provide tailored training on phishing, account security, and proper ERP use. Simulate attacks to reinforce lessons and highlight industry-specific scams (like fake FDA inspection emails). Train executives too; they’re high-value targets. Encourage reporting of suspicious activity and reward good security practices. Offer tools like password managers and enable SSO to reduce friction. A strong security culture reduces errors and turns staff into active defenders.

9. Establish Incident Response & Disaster Recovery Plans

Prepare for the worst with documented IR and DR plans. Define roles for IT, security, legal, and communications. Include contact lists, decision trees, and playbooks for different scenarios. Regularly test plans with tabletop exercises or drills to expose gaps. Ensure you can restore backups quickly and maintain interim processes if ERP is down. IBM data shows organizations with tested IR plans suffer far lower breach costs, proof that preparation pays.

10. Evaluate Vendors & Strengthen SLAs

Your security is only as strong as your weakest partner. Vet ERP vendors and third parties for certifications, security practices, and breach history. Build requirements into contracts and SLAs: data protection, encryption, backup frequency, incident notification timelines, and liability clauses. Limit vendor access with least privilege and time-bound controls. Maintain a third-party risk management program to assess and monitor partners continuously. Hold vendors accountable so security is a shared priority.

How Folio3 FoodTech Ensures Data Security in Its ERP Solutions

Folio3 FoodTech is a specialist partner for food & beverage manufacturers and distributors, delivering industry-specific Food ERP, food safety, and compliance solutions built from real shop-floor insight, not theory. We have supported food businesses with tailored software, covering end-to-end needs like production, quality, traceability, procurement, and supply chain visibility. 

The focus is clear: help you streamline operations, strengthen compliance, and stay audit-ready with purpose-built tools for HACCP, quality management, and lot-level traceability, so you can scale without compromising on control. This is where ERP data security meets day-to-day usability: practical controls embedded in workflows, plus guidance to deploy them the right way.

Security parameters & strategies we apply

• Encryption by design: Data encryption at rest and in transit to protect sensitive operations across modules and industry sub-verticals (e.g., meat, frozen, snacks).
  
• Granular access & authentication: Role-based access controls (RBAC), user authentication, and support for MFA to limit exposure and enforce least privilege.
  
• Audit trails & user tracking: Built-in user activity tracking to keep critical modules secure and auditable for regulators and customers.
  
• Secure integrations & operational hardening: Robust protocols for supply-chain data with encryption, authenticated connections, and regular security audits.
  
• Compliance-first workflows: HACCP, quality management, and traceability tools that keep records complete, consistent, and audit-ready, supporting data security management in ERP platforms and faster recalls when needed.

So, align governance, technology, and culture to strengthen ERP data security. Also, assess your ERP security challenges, collaborate cross-functionally, and set vendor requirements. Consult security ERP experts to request an ERP demo.

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