As the food and beverage processing sector is growing, the need for environmentally sustainable solutions also grows. The industry is looking for more energy-efficient solutions focussing on reduction of the carbon footprint. In an email interaction with Ashwani Maindola, Kaustubh N Joshi, director, CPG segment, Schneider Electric India, talks about the need to rebuild a more sustainable and resilient global food & beverage supply chain that tackles waste and ensures traceability. Excerpts:
What is your assessment of India’s F&B industry vis-à-vis the global scenario?India is well known for its vibrant F&B industry that has shown unprecedented growth in the recent past owing to rapid urbanisation, a flourishing retail industry, and growth in disposable income. According to a report by IBEF, the F&B industry accounts for approximately a 3% share of the country’s GDP. With a workforce of more than 7.3 million, it is India’s largest employing industry.
Increasing the share of middle-class citizens in the economy would significantly improve the purchasing power that would further bolster the growth of the F&B sector. KPMG estimates the Indian food processing market to double from US$263 billion in 2019-2020 to US$535 billion by 2025. The growth of the global F&B industry rests on the shoulders of developing countries like India, China and Brazil.
The unprecedented events followed by lockdowns and remote working have caused some disruptions. However, it is important to note that these challenges have laid the foundation for the reinvention of the F&B industry. As countries worldwide look to unlock and recover, the Indian industry has a huge opportunity to score a goal.
What is the trajectory you see for the growth of the Indian F&B sector?
The massive potential of the Indian F&B industry can be gauged from the fact that globally, it is the 14th largest exporter of food products. Despite achieving this feat, India’s food processing levels are much lower than its peers. India’s geographical location gives it an edge over other countries. With an abundant supply of raw materials and a growing domestic market, the time is ripe for the F&B industry to push the pedal for a food processing boom in the country.
The Indian economy is swiftly inching towards recovery. The easing down of lockdown restrictions has led to a jump in the sales of packaged consumer goods. Customers are focussing on hygienic products that meet high safety standards and have longer shelf lives. This is a positive sign as it demonstrates that the acceptance of packaged food, snacks, and ready-to-eat segments is on a rise. With timely interventions, India is well-positioned to become a global food export hub.
Why technology is important in the F&B sector in today’s time? Also, describe what are the vital technologies that can be employed by the processing units to enhance their capacities as global best practices?
A steady and quick integration of technology in business operations would skyrocket the growth of the Indian F&B sector. Digitisation presents abundant opportunities to maximise efficiency and profitability. Moving forward, industry players would need to tap on the strength of technology and data to create an agile business value chain.Changing customer behaviour, policy framework, and shortage of resources are some of the factors driving the shift towards digital technology in today’s day and age. Features like data collection, visibility, and traceability promise to wipe out pain points in the supply chain by optimising product-to-market processes and improving the overall quality. Further, with the rise of global supply chains, stringent regulations, and the success of e-commerce and mobile apps, it has become necessary to provide traceable, complete, and transparent product information along the whole value chain. Therefore, F&B manufacturers require access to technology that provides end-to-end traceability with complete product information, labelling, safety standards, and minimised waste. The biggest underlying advantage of this model would be the industry’s shift towards sustainability.
What is your focus on the digital transformation of the food and beverage industry? Elaborate
Schneider Electric believes in embracing the latest technologies to drive the innovations of tomorrow. The future lies in creating interconnected spaces for increased collaboration and transparency through digitisation. Today, customers are much more aware and seek transparency at every level. They want to know everything about the product they choose, right from the sourcing of raw materials to the safety and sustainable aspects of packaging.
Digital transformation is the only way to integrate traceability and sustainability in the F&B value chain, right from the farm to fork. By bridging the gap between the producer and the consumer, F&B firms can achieve higher agility, traceability, and precise control over business operations that would ultimately strengthen the bond between them and the consumers. Globally, businesses that have shown farsightedness by becoming early adopters of digitisation have been able to remain resilient even during challenging times.Apart from this, the F&B sector faces similar industrial challenges in the form of thin margins, ageing equipment and lower budgets. To top it all, this sector is highly energy-intensive which directly impacts the overall costs. Therefore, it is crucial to optimise manufacturing and operating processes by integrating flexibility, efficiency, and sustainability across the business chain. With timely technological interventions, the F&B industry can move towards Industry 4.0. Schneider Electric’s EcoStruxure for F&B is an IoT enabled solution that facilitates higher operational efficiency, maximises asset value, reduces energy consumption, and protects the environment.
How is your company helping the sector achieve operational efficiencies and sustainability across the supply chain?
Digitisation offers a chance for manufacturers to better align with the needs and expectations of the customers. For this, they require flexible and efficient manufacturing, safer and greener facilities, and agile and transparent supply chains. Schneider Electric’s EcoStruxure is uniquely positioned to improve overall customer processes from design to operation and maintenance.Our IoT-enabled EcoStruxure helps in maximising energy efficiency and sustainability through real-time, data driven-decisions taken by the smart systems. Further, we aim to develop a complete end-to-end traceability suite of flexible, open, and scalable solutions for our partners so that they can monitor and reduce any wastage and henceforth move towards sustainability and circularity. Sustainability is at the core of what we do at Schneider Electric. We are committed to reducing the environmental impact of our partner’s businesses by deploying advanced technological solutions.
What are your thoughts on the MSME sector, which is the largest contributor to the food processing sector in India?
The MSME sector is an extremely important arm of our economy. It accounts for a 30% share of India’s GDP. This sector is going to play an invaluable role in India’s journey towards making an AatmaNirbhar Bharat.. The readiness of the MSMEs to deploy advanced technology in their operations would exponentially increase their productivity and solidify their position in the F&B industry.By embracing Industry 4.0 technology, MSMEs can look to shift towards the future of the food processing segment. Not only would this boost their manufacturing capability but would also propel them towards the larger cause of sustainability. Smart investments of today would make them future-ready. The technologically enhanced, smart solutions significantly cut down the cost of maintenance and downtime, while ensuring high efficiency and productivity. So, it is like a one-time investment that ensures that the MSMEs are poised to enjoy the benefits of the future.
How can companies like yours contribute to the upgradation of the MSME sector and help in augmenting both the quality and quantity of the value-added products?
MSMEs should proactively look to adopt the latest technologies for sustained growth. Moving ahead, companies must evaluate how to foster an agile, resilient and reliable value chain. It is essential for MSMEs to embrace digital transformation to address the issues of growing consumer demand, changing customer preferences, and faster adaptability to newer recipes. All these factors have a direct bearing on the overall quality and quantity of products.Our EcoStruxure for food & beverage boosts the manufacturing capabilities of the factory unit by optimising energy distribution and providing actionable data. Predictive maintenance ensures that there is no delay in conducting the normal processes and data insights make it convenient to manage and process the raw materials, ensuring efficient usage of energy, water, waste, and chemicals.
As we adapt and meet the evolving needs of our industrial customers, providing cyber security solutions is a critical component of our commitment. Our vendor agnostic services software works with any platform, offers secure and flexible monitoring and complete visibility of the manufacturers IoT enabled network.
If companies want to gain a stronghold over the market, they will need to quickly adapt to changing situations. In today’s age of connected devices, the divide between IT and OT is starting to dissolve. A strong IT, OT convergence is now possible to achieve this kind of efficiency.
How do you see the policy interventions/support by the Government (Union and state) for the operations of companies like yours? Do you see any challenges?
The policy framework of the Central as well as the state governments has been really supportive. The government’s vision of AatmaNirbhar Bharat is at the forefront of our operation at Schneider Electric India. We export our Made-in-India products to more than 35 countries. India is one of the four global hubs for Schneider Electric. Adding to this, we have a combined strength of 32 factories and 35 distribution centres in the country. As India looks to embrace sustainability and expand its renewable energy portfolio, Schneider Electric is fully committed to be a part of this journey.