ProPak India, a processing and packaging event by Informa Markets in India & Suman Food Consultants recently conducted an insightful webinar on COVID-19 Crisis: Challenges & Solutions for the Food & Beverage (F & B) Industry that attracted over 940 attendees. Given the dynamic situation of COVID-19 crisis, there has been a pressing need among industry leaders to chalk out strategies in order 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 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 industry thought leaders Sagar Kurade, MD, 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, MD, Bajaj Processpack; Aditya Bagri, MD, Bagrrys India; Jayesh Gosrani, joint MD, Goma Engineering.
Speaking on the operational challenges in food production under COVID pandemic, Nitin Seth said, “There is a huge gap in what central government says and what district administration understand. They say that the 60% of the food industry is operational; though even if the manufacturing units are operational, they are operating at 15-20% capacity only.”
On the labor issue, Anil Rajput of ITC said, “Whether one gets permission to operate at 15%-20% -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 safe working environment in order to mitigate risk for labors both physical and psychological. Money is not the driving factor to bring back employees back to work.”
Focusing on the liquidity crunch issue for MSME, Aditya Bagri of Bagrrys India said, “This being a procurement season for food processing industry, in the current scenario, a lot of MSME’s are struggling to procure the required raw material due to liquidity crunch which ultimately affects the manufacturing capacity. This has been actively discussed with MOFPI in order 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 a subside interest rates. Further with the manufacturing units being nonfunctional during the lock down period, if the discretionary fixed costs like, electricity charges etc. can be subsidized or waived off, it could add up to the liquidity for the food processors. Further it is important that the cash flows across the supply chain in order 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, Jayesh Gosrani of Goma Engineering 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.”
Additionally, Girish Bajaj of Bajaj Processpack also reiterated that primary processing is the need of the hour. “There are around 70-80 agro processing universities which has well equipped post harvest technology centers, if these universities can become a link between farmers and 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 the fittest; it will be survival of quickest,” said Anil 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 packaging industry, Amit Ray of, UFlex 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 a key to success with changing 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 first quarter being badly affected, the companies to survive themselves will need to ramp up their capacity for the remaining 3 quarters, and with issues of migrant labors 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 of food industry Anil 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 and get into manufacturing of their own end products in the country.”
Commenting on the vital impact that digital marketing and online platforms will have on sales in food processing industry, Aditya Bagri said “The lockdown scenario has made more and more people to try online solutions and companies are heavily investing in customer acquisition and digital marketing. The change is consumer behavior in ordering online is going to stay for long due to convenience and flexibility.”
