Strongest in Crisis: Empowering the Indian Food & Beverage Supply Chain During COVID-19

Published On October 31, 2021 by ShakeDeal Staff

The spread of the novel coronavirus and the rise of the COVID-19 pandemic put the world in absolute confinement. Countries around the world declared a state of health emergency and the ‘Strategic preparedness and response plan’ was implemented by the World Health Organization. One of the sectors that had to work its way through all the imposed restrictions and reach out to the masses at large, was the Food and beverage sector.

The spread of the novel coronavirus and the rise of the COVID-19 pandemic put the world in absolute confinement. Countries around the world declared a state of health emergency and the ‘Strategic preparedness and response plan’ was implemented by the World Health Organization. One of the sectors that had to work its way through all the imposed restrictions and reach out to the masses at large, was the Food and beverage sector.

How did the pandemic affect the supply chain?

The Food and beverage supply chain can be divided into five segments: agricultural production, postharvest management, processing, distribution (logistics), and consumption. All stages of the supply chain were affected by the outburst of the virus. However, the impact felt by each of these segments during the early lockdown days was varied.

  • Farm production and processing of the products were greatly affected due to the shortage of labor.
  • Selective lockdown of places further hampered the functioning of the manufacturing units.
  • Logistics and transport were majorly affected, disrupting the supply chain.
  • A rapid shift in consumer demand from junk food to healthy food further left an impact on the demand and supply ratio.
  • Sealing of the country’s borders had put a momentary halt on the global food trade.

Apart from lockdown restriction, the supply chain workers were also required to adhere to preventive measures like the hierarchical plan that involved frequent cleaning, sanitation of individuals, disinfection of the unit, and programs for educating the workforce.

Resilient Food Supply Chain

Post the nationwide lockdown, the food supply chain underwent numerous changes to effectively respond to the incoming consumer demand. Immediately after the implementation of the lockdown, aggregate volumes of supplies dropped by 62% but subsequently fully recovered. Even the wholesale prices of goods rose by around 8% but later showed a negative graph.  The government as well undertook decisions to stabilize the food supply chain, these included:

  • Permitting farmers to sell their products outside the market yard, for better returns.
  • Relaxation of the essential commodities act.
  • Introduction of an e-market platform for farmers to receive better prices.

Apart from the above-mentioned reforms, industrial leaders also suggested policies to further smoothen the food supply chain:

  • Reviving the National Oilseeds Commission, such that India can become self-reliant in edible oil production.
  • Conducive government policies to encourage innovation in the farm sector.
  • Regulations for ensuring secure and rapid electronic trading of goods.

The initial lockdown was the stringiest, with multiple restrictions in place to prevent potential damage. Even though it disrupted the supply chain, the quick recovery of the Indian food supply chain suggests that the initial lockdown did not leave long-term impacts.

Post-Covid Preparation

Now that the food and beverage sector is striving its way through the pandemic, it is also the right time to simultaneously prepare for the battle ahead. The post-covid world would be different and the only way to not miss out on any of the future opportunities and to safeguard operations is to be prepared.

Forecast Demand

A common trend that was seen across the globe post the eruption of the pandemic was panic buying and stockpiling. This led to the faster clearing of departmental shelves, leaving the shopkeepers puzzled. The only way to understand the trends in the coming years is to direct technology into gauging consumer demands. Using advanced analytical tools, consumer behavior can be studied and the cause of the purchase or the actual demand for the product can be understood.

Flexible yet resilient flow of goods

The restrictions imposed following the pandemic, left the supply chain disrupted. To prevent such disruption in the future, one can adapt to multichannel procurement of goods, also known as vendor diversification, or can shorten the product list, the impact of both of these would be it would save time, reduce risk, improve resilience. The ultimate goal is to ensure the food produced on the farms reaches the table.

Employee and food health

‘Health’ has become the center of attention. People have been shopping online rather than grocery shopping. The fear of getting infected from food even though it hasn’t been scientifically proven is still prevalent. Prioritizing employee health and ensuring food safety will create a good brand image for your product. Safety and precautions are the two keywords to swear by for a successful future in the food sector.

Sustainability

Transparency of the entire supply chain right from the harvesting of goods to its delivery will make the business more sustainable. The current scenario has made individuals curious about the components of a product and its health benefits. So, giving a clear idea about the product will make it more buyable.

Embrace technology

Technology has limitless benefits; one only needs to incorporate it into the system. Cloud technology can be a boon for distantly coordinating with the employees, managing customer demands, tracking the supply chain, and storing data. A weapon like technology if used wisely can help a company cut through the shackles of losses and failure.

Implement an effective sales and operations planning (S&OP) process

Now that the food supply chain has been stabilized by taking into consideration the previously mentioned points, it is time to get a competitive edge over fellow food industrialists. This can be effectively done by implementing the S&OP strategy. S&OP helps one closely track finances and business, thus promoting better decision-making ability. However, the S&OP depends on the resources of the organization and the needs of the customer.

To sum it up, a stable and uninterrupted food supply chain can be achieved by strengthening brand equity, making the procurement process transparent, and adapting technology.

 

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