Packaged food firms tackle challenges to stay afloat amidst lockdown

Meenakshi Verma Ambwani New Delhi | Updated on April 12, 2020

Representative image   -  gilaxia

Companies looking to increase capacity to maintain supply, ramp up production

As India gears up for an extended lockdown to tackle the Covid-19 outbreak, packaged food companies are looking to ramp up their production capacities even as they continue to battle with shortages of labour, disruptions in last-mile delivery and challenges with local administration permissions. While the recent Central government directives have led to some improvement in the situation on the ground, interpretation by local administration regarding packaged food products (that are not staples/essential products) varies from district to district.

Nitin Seth, Vice-Chairman, GD Foods — which is known for “Tops” brand — said: “Movement of products from our plants to distributors is getting hampered as many local level administrations are not considering products like jams, ketchups, cornflakes, vermicelli or ready-to-eat instant mixes as essential. The role of such convenience foods has become even more crucial when consumers are under a lockdown.” He added that distributors are unable to conduct dispatch and distribution activities effectively due to either lack of enough e-passes and vehicles or lack of workers.

Increase capacity

GD Foods is currently producing at 8-10 per cent of the total capacity, but is looking to ramp it up to 50 per cent by the month-end. “This is the season for tomatoes and mangoes, which we procure and store to be processed through the year to make products such as ketchups and pickles, and farmers are unable to send their produce. Similarly, getting packaging materials has become challenging,” Seth added.

According to a survey conducted by LocalCircles in collaboration with Department of Consumer Affairs during April 9-10, only 50 per cent of respondents said they were able to find majority of essential goods from e-commerce apps and about 65 per cent said they could find essentials from local retail stores. As the lockdown gets extended, demand for packaged food is expected to increase further and companies are hoping to meet this by ramping up capacities.

Mayank Shah, Senior Category Head, Parle Products said, “From about 10 per cent earlier, we have ramped up capacity to about 25-30 per cent and hope to increase it to 35-40 per cent by the end of next week. Things are improving with each passing day. However, last-mile delivery challenges from depots to distributors and further to retailers remain in certain areas due to shortage of workers.”

Scale up production

Another senior industry executive said that players are looking at measures to ramp up production capacity for packaged food to 50-60 per cent of the pre-Covid-19 levels. However, food processing companies emphasised that efficient sourcing of raw materials, especially perishable agri produce, will be key.

Akshay Bector, Chairman & Managing Director, Cremica Food, said that movement of farmers and workers involved in harvesting and transportation will be very crucial in the coming days. “Consumers’ need for products that aid in cooking or help preserve food will only grow and agri produce is a crucial raw material for such products,” he added. The company is also looking to increase its production capacity to 50 per cent in the next few days.

Bector also highlighted the need for a central directive on hygiene and safety protocol for the industry. “We began training our factory workers from Feburary-end, not only on following social distancing and hygiene practices inside the factory premises, but also at their homes. In fact, I believe there is need for a Central directive or guidelines on safety and hygiene protocols for factories.”

Published on April 12, 2020

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