What are the major challenges that the Food & Beverage Industry players will face in the future?

Now is perhaps the most challenging time for food and beverage manufacturers. The rising cost of materials and manpower, customer experience sharing at a global scale, shrinking margins due to tough competition, the constant shift in consumer tastes, fluctuations in agricultural outputs- has all contributed to heavy challenges not just to F&B manufacturers in Kerala, but national and international players.

What are the major developments that the Food & Beverage Industry players will face in the future?

But these challenges are the opportunity for the real visionary businesses to beat competition, excel, and gain market shares. One of the important tools to be used by these visionary businesses will be technology, in its various forms, from sourcing, manufacturing, supply chain management, branding to end-customer experience.

According to a white paper by GE released at the “Gulfood Manufacturing 2018”, these technological changes can range from Industrial Internet of Things (IIoT), connected industrial units,  proactive repair of machinery based on real data, smart asset management, low-cost effective sensors, usage of the “Cloud”, big data, artificial intelligence- and many more technologies that will help reduce drastically wastage of raw materials, damages to finished or semi-finished products, prevent overproduction or underproduction, reduce cost and increase margins, besides target marketing to target customers.

According to GE, their customers (business and manufacturers who opted for their technology) stated operational efficiencies such as up to 20% reduction in unplanned downtimes, 20% inventory reduction, more than 20% recovered capacity, up to 40% EH&S incident reduction, up to 20% reduction in maintenance, up to 10% inventory cost reduction, 8% decrease in field service cost, 9% increase in equipment uptime, 13% decrease in average time to repair and so on.

How does Kerala or Kerala-based Entrepreneurs Benefit?

There are several unconventional opportunities for adventurous daring forward-looking entrepreneurs in Kerala. Like,

Build and operate “modern” technology-oriented farms: Global consumer packaged foods manufacturers are facing the security of agricultural inputs. To overcome this, they are purchasing farmlands in other countries, to overcome any shortage of agricultural produce. Currently, they are looking at China and Africa. This is an opportunity for modern agro-entrepreneurs who can own, manage and bring agro-products of global standards. To be cost-effective and quality assured, these farms should be capital intensive than manpower intensive. It should use all the latest technologies to ensure maximum output, with minimal harmful chemical usage, and that too at a minimal cost. This will bring a new breath of life to the fertile lands of Kerala. This is an opportunity that Kerala-based entrepreneurs can do in other states of India as well, where farmland availability will not be an issue.

Build Consumer Brands to Sell: Global consumer brands face two types of hard competition that affect their survival and profitability. One is the usual competition they face from other global players. Other is competition faced from the local consumer brands (who have a better local knowledge about the local customers). As part of their inorganic growth strategy, the global players have a tendency to buy local brands. This is a good opportunity for new-age young entrepreneurs who wish to sell off their brand at a handsome price and start a new venture. This is especially ideal, when the local brands are suffering from the tough competition (despite having a good market share), and going ahead is not that easy. It’s a win-win situation for the buyer and the seller. So the opportunity is to build a great brand that you would sell at a high price when the competition gets really tough.

Technology Ventures: There exists the opportunity for specialized technology firms that will provide technology solutions (hardware, software, or platforms) to the F&B sectors. The opportunity is global, as these ventures can sell their products or services in the global market. This is the biggest opportunity for Kerala, as thousands of specialized technology ventures can be market players. And Kerala’s IT parks and IT professional pool can be a good resource. But the key is to specialize, as only when there is specialization they can invest in research, R&D and know the market needs better.