Covid-19 crisis, challenges and solutions for food & beverage industry

Time for the industry to think, build and implement survival strategies

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Webinar on the Covid-19 crisis, challenges and solutions for food & beverage industry

ProPak India, one of the nation’s premier processing and packaging event by Informa Markets India and Suman Food Consultants, recently conducted webinar on ‘COVID-19 Crisis: Challenges and solutions for the food & beverage industry’. According to the organizers, the webinar attracted over 940 attendees.

Given the dynamic situation of the Covid-19 crisis, there has been a pressing need among industry leaders to chalk out strategies to address the situation, delve into impact assessment and revival strategy and how to steer the industry to bounce back post the Pandemic.

The webinar duly enabled F&B professionals to sustain their critical business conversations and engagement and deliberate on challenges in food production, labor issues, liquidity crunch, farm level intervention, the need of an organized sector, strategies food industry should adopt to tackle the recessionary phase, impact of Covid-19 on the packaging industry, self-reliance of food industry and the role Digital marketing and online platforms will play on sales in the food processing industry.

The webinar was moderated by respected industry thought leaders Sagar Kurade, managing director, Suman Food Consultants and was marked by the following thought leaders from the F&B industry – Nitin Seth, vice chairman, GD Foods; Anil Rajput, head corporate affairs, ITC; Amit Ray, president, Uflex; Girish Bajaj, managing director, Bajaj Processpack; Aditya Bagri, managing director, Bagrrys India; Jayesh Gosrani, joint managing director, Goma Engineering.

Speaking on the operational challenges in food production under COVID pandemic, Seth said, “There is a huge gap in what the central government says and what district administration understands. They say that 60% of the food industry is operational; though even if the manufacturing units are operational, they are operating at 15 to 20% capacity only.”

On the labor issue, Rajput, said, “Whether one gets permission to operate at 15, 20, or 50%, labor is administrative, the major issue is the fear that the labor has of risking his own life as well as the life of his dear ones back at home. We, as employers need to think from their perspective and adopt the most caring and nurturing attitude towards them and ensure a safe working environment to mitigate risk for laborers, both physical and psychological. Money is not the driving factor to bring employees back to work.”

Focusing on the liquidity crunch issue for MSME, Bagri said, “This being a procurement season for the food processing industry, in the current scenario, a lot of MSMEs are struggling to procure the required raw material due to liquidity crunch which ultimately affects the manufacturing capacity. This has been actively discussed with the ministry of food processing industries (MOFPI) to see if some amount of relief is passed on. Also, if financial institutions can come up with some option to inject the working capital need at subside interest rates. Further, with the manufacturing units being unfunctional during the lockdown period, if the discretionary fixed costs like electricity charges and others can be subsidized or waived off, it could add up to the liquidity for the food processors. Further, the cash must flow across the supply chain to put the working capital cycle in motion.”

Speaking on the farm level intervention and the need of the hour to move from unorganized to organized sector, Gosrani said, “Today consumers have become more health-conscious and are very much aware of what they consume. Automation in the processing sector will be the key to success wherein the products are processed in a condition where the consumers are confident of consuming it.”

Bajaj also reiterated that primary processing is the need of the hour. “There are around 70 to 80 Agro-processing universities which have well equipped postharvest technology centers, and if these universities can become a link between farmers & end consumers in terms of the inspection of the crops further if they guide framers to do the primary processing of the agricultural produce at the farm level, it will reduce the wastage.”

With the world getting into a recessionary phase, the panelists also spoke about the strategies the food industry should adopt to tackle this phase.

“The industry needs to be agile and adapt to the changing scenario. It will not be “Survival of fittest; it will be survival of quickest,” said Rajput, who further added that, “This might open new opportunities for the entire food processing sector. In the short run, there could be some challenges. However, the industry will have to be prepared for new product development based on consumer behavior post this crisis scenario.”

Talking on the impact of COVID on the packaging industry, Ray, said, “The essential commodities will spurt; however, the lifestyle products and luxury commodities will take its own time to regain its normalcy. Hygiene products will see a boost. Packaging will be the key to success with changing the behavior of the consumers.”

While labor issues prevail during the COVID crisis, speaking on what role will automation play, Bajaj commented, “The Automation is the way forward with consumers changing behavior towards personal hygiene, food safety and health consciousness, the demand for quality processed foods is on rise and that’s where the manufacturers will look at automation to ensure that the food they produced is more safer and healthy. Further, with the first quarter being badly affected, the companies to survive themselves will need to ramp up their capacity for the remaining three quarters. With issues of migrant labor, the only option available is to automate the production. The other paradigm shift will be third party manufacturing wherein the companies will reduce their capex requirement to manage the liquidity crunch.”

On self-reliance on the food industry, Rajput said, “Deglobalization shall open up new opportunities for the processing sector. Demand for technology transfer and joint ventures will increase in the country. The machine manufacturers can get into joint ventures & get into the manufacturing of their end products in the country.”

Commenting on the vital impact that digital marketing and online platforms will have on sales in the food processing industry, Bagri said “The lockdown scenario has made more and more people try online solutions and companies are heavily investing in customer acquisition and digital marketing. The change in consumer behavior in ordering online is going to stay for long due to convenience and flexibility.”

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