Leading SMEs of India 2023

68 | Leading SMEs of India 2023 [ INDIAN SME SECTOR OVERVIEW ] Focus on sustainability: The gove r nmen t r egu l a t i on s (banning of single use plastic in some states), and growing awareness about the adverse envi ronmental impacts of F&B packaging material, has led the industry to adopt more environment-friendly, recyclable packaging material. Adop t i on o f i nnov a t i ve technologi es : I nnova t i ve techniques like cloud kitchen and digi t a l technologi es l i ke blockcha in, ar t i f i c i a l i nt e l l i gence , geogr aph i c i n f orma t i on s y s t ems a r e increasingly getting used by the Indian F&B industry to upscale technological competence. CHALLENGES Supply chain challenges: The supply chain infrastructure bot t lenecks such as weak transport and distr ibut ion f a c i l i t i e s , poo r s u r f a c e infrastructure, lack of proper warehous ing, and er rat i c electrici ty supply leads to wastage of raw material and higher transaction costs. Lack of modern technology: Majority of food processing units are MSME enterprises. They have insufficient access to credit facilities are often unable to upgrade to the modern technologies. This directly hampers their productivity and has adverse impact on competitiveness. Elevated food costs: There has been strong rise in global food prices driven by transportation and energy inf lat ion. The elevated food costs have resulted in change in demand pat tern as wel l impact ing profitability of F&B companies GROWTH OUTLOOK The Indian F&B sector exhibits huge growth potential given the changing consumer lifestyle & consumpt ion patterns, rising di sposable incomes as wel l as large proportion of young population. The sector will be further benefited by the strong raw material base, conducive business env i ronment , technologi ca l innovations and government thrust on infrastructure development. Besides, the pol icy measures like development of mega food parks and grants will support MSMEs. However, to attain its true potential, the industry also needs to invest in cold chain setups, food quality control & testing labs, warehousing, and modernization of existing machinery. Dun & Bradstreet