April 2020 by Divyansh Infomedia

RNI No: MAHENG/2018/75095

FOODANDBEVERAGE MATRIX

MONTHLY NEWSPAPER FOR F&B INDUSTRY Volume 3 / Issue 2 / Mumbai / April 2020 / Pages 28 / INR Rs 50/-

April 2020 | Food And Beverage Matrix

Publishers Note

FOODANDBEVERAGE MATRIX

MONTHLY NEWSPAPER FOR F&B INDUSTRY Dear Readers; Hello! After India was put under a 21-day lockdown to contain the Covid-19, the country

witnessed a heart melting • This trend of reverse migration • In this kind of a scenario. Millions of panicdepicts how urban metropolises scenario, one cannot stricken migrants flocked to are but second homes for these help but ponder over their hometowns in the fear migrants, a significant number Mahatma Gandhi’s that they’ll perish of starvation of whom work in the informal in the city. economy. vision of Indian villages being growth engines for village dwellers. • For materialising this Gandhian dream, both government and private players must work in solidarity to create an enabling environment for industries to thrive in these regions and to provide amenities and opportunities that lure rural inhabitants to stay put.

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This exodus makes it evident that these urban cities were nothing more than second homes to migrants. Though these migrants might inhabit metropolitan centers, they still owe loyalty to their rural roots and brethren as the rest of their family and in some cases, assets like land. Best of Luck! Please keep sending us your valuable suggestions with your expectations & feedback to manan@ tresbonconsulting. com. For more articles you may also log on to our website and enjoy reading any time. Thank you Dhiraj Dubey

April 2020 | Food And Beverage Matrix

GANDHI AUTOMATIONS MOVING TOWARDS ARTIFICIAL INTELLIGENCE Efficiency is critical to survival. Companies have to adapt rapidly, and if they’re not adopting some form of robotics, they will not be able to compete. Using automation to protect the supply chain does more than help companies react quicker or reallocate internal resources to other tasks. It can also help reduce insurance costs.

ment to quality and reliable customer service, Gandhi Automations is now manufacturing all kinds of entrance automation solutions and loading bay technology meeting world class standards. With our unshaken determination and passion to serve our customers, we have turned every challenge and adversity into opportunity that helped us achieve 70 percent market share in the industry in short span of time. Automation is a powerful tool and comes in many shapes and forms. In the Logistic and Supply chain industries, automation is generally used to make gains upon existing processes by improving efficiency, speed, reliability, accuracy and (eventually) cost savings as it reduces the impact of a labor shortage; thereby keeping the labour cost down.

ment. Because of our expertise in this field we understand and explain to the client how he can make optimum use of the technology. The customer acknowledges this as the greatest value addition to him when he approaches Gandhi Automations for a particular product.

It is true that there exists a lack of standardisation in door specifications and we are constantly working on how to bring about standardisation in this field. At the moment we are working along with some of the prominent architects and consultants on this issue. It is an absolute joint effort to educate the end users on the importance and the advantages of standardisation. In all this our effort is always to provide to the clients the best of quality and service

We work as a consultant and we take into consideration the need of a customer and accordingly provide the best customised option. We provide customised solution as per specific need of a particular sector for e.g. pharmaceutical, chemical, automobile, food, cold storage etc. Each of these sectors has a unique material handling and warehousing require-

Now we have further upgraded our systems by moving on to Artificial Intelligence – Our Products are now being designed with sophisticated systems which can be integrated with your BMS – Building Management Systems. Thereby giving you an ease of operation from anywhere and any compatible device.n

RBI ROLLS OUT MORE RELIEF MEASURES TO FIGHT VIRUS

aking the fight against covid-19 crisis a step further, the Reserve Bank of India has rolled out more relief measures from its kitty. The central bank acknowledged the states’ role in mitigating the impact of the pandemic and announced numerous steps to help states tide over the repercussions of this spiraling health exigency. It raised the borrowing limit by 30% of all states & Union territories

under the ways and means advances (WMA) facility for the period 1 April to 30 September. This was done with the intention to help them overcome the mismatch between revenue and expenditure flows because of the unprecedented 21-day nationwide lock down. The bank also extended realization period for export proceeds and deferred the implementation of counter cyclical buffers. The counter cyclical capital buffer (CCB) was

introduced as part of Basel-III, as an additional risk mitigation measure, in the aftermath of the 2008 financial crisis. It required banks to stash away a portion of their profits as reserves even in boom times. On 31 March, RBI increased the short-term borrowing limit of the central government as well to provide a cushion to the states to carry on their essential activities and normal financial operations in the face of this crisis. n

April 2020 | Food And Beverage Matrix

“COVID-19 CRISIS IS A GREAT OPPORTUNITY TO REVIVE MULTILATERAL TRADE FRAMEWORK”

Prof. Pravakar Sahoo, Institute of Economic Growth, tells TPCI in his exclusive interaction that owing to lockdowns around the world, Indian sectors such as steel, oil & gas, pharma, auto ancillaries, electronics, IT services and chemicals will be most impacted as their production depends on intermediate goods imported from abroad. He also sees the present crisis as a great opportunity for reviving the multilateral trade framework.

TPCI: What impact will the three-week lockdown have on India’s supply chain in terms of import of raw materials? What impact will it have on the domestic market? Prof. Pravakar Sahoo (PS): In the world of global value chains or value addition at different stages and places, any lock down affects the whole production network. The lockdown across the countries affects India’s imports, which are mostly inputs or intermediate goods for its supply chain. For example, we depend on Chinese imports in many sectors. Between April and December 2019, India imported goods worth US$ 52 billion from China. More specifically, sectors such as steel, oil & gas, pharma, auto ancillaries, electronics, IT services and chemicals will be most impacted as their production depends on intermediate goods imported from abroad. Further, the domestic lockdown completely disrupts the movement of goods from farm/warehouse to firms/markets. In fact the threeweek lockdown, which was necessary, has brought economic activity to a standstill.

and exports. Manufacturing exports constitute more than 60% of India’s total exports and the import content of India’s exports is very high. Some of sectors that feature in India’s top exports are also in India’s top imports. Therefore, lock down affecting imports used for manufacturing will severely affect India’s exports. Moreover, the world market is in crisis as most of our export markets –USA, Europe, China – are severely affected by the Corona Pandamic and the disruption to the domestic production chain does not help India’s export competitiveness to penetrate into the world market during this tough times. There are many export sectors which will get affected, including petroleum products, gems and jewelry, automobile, pharmaceutical, organic chemicals, machineries etc. For example, the Indian pharmaceutical industry’s active pharmaceutical ingredients (APIs) are heavily dependent on imports, with more than 60% demand met from imports. Out of the total imports, 65-70% alone is imported from China. Thus, pharma manufacturing will be hit and the prices of import dependent products may rise. Similarly, the automobile sector is dependent on China for certain components such as fuel injection pumps, turbochargers, etc. A shortage of supply may lead to running out the inventories and causing supply chain disruptions in manufacturing activities. Given that India exported US$ 15 billion worth of automotive products in 2018, the impact can be felt on manufacturing exports if the imports of critical components are disrupted.

TPCI: Although the government has assured the nation that the supply of essential commodities will not be affected, the industry anticipates developments like a spike in food prices and dearth of medicine supplies due to the difficulties in transportation from the field/ According to estimates, the shut down factory to the markets. Are could costs around US$ 120 billion, or 4% of GDP. Therefore, lockdown these fears misplaced? badly affects the supply chain and there may be shortage and spike of prices in certain sectors.

TPCI: What repercussions will the halt of manufacturing activities have on Indian exports? PS: The lockdown affects the whole set of domestic production network and thereby affects manufacturing

PS: These fear factors are not completely misplaced. While the government is aggressively involved in providing supply of essential commodities, the implementation may not be completely smooth during the lock down. Some of these may include lack of supply, logistical disruptions, etc. There may be a temporary spike in prices of certain essentials due to

genuine shortage, logistical disruptions, hoardings by suppliers and also by households in a climate of uncertainty. However, the government has been very effective in managing the supply chain of essential commodities so far.

TPCI: What does this present crisis portend for the future of an already damaged multilateral trade framework? PS: The present crisis is a great opportunity for reviving the multilateral trade framework. The current pandemic has brought broader disruptions to global trade. The trade war between the US and China has resulted in a climate of uncertainty where exporters and importers are unsure about new tariff policies. However, a coordinated push, through the G20, that includes not only fiscal-monetary stimulus but also push for globalization will infuse confidence in the exporters and importers. In the past like during GFC in 2008, the international community has successfully gathered a coordinated response to similar crises. While the current scenario is not too good, still a mutual halt to trade wars and defining new and more open multilateral trade agreements will help boost economic activity globally through increase in confidence and economic activity. In fact, G-20 leaders virtually met on March 26, 2020 and urged for open trade policies. The world economy is staring at a prolonged crisis, much more than global financial crisis of 2008 and therefore it can least afford any more protectionism policies. Multilateral open trade regime is the way to go.

TPCI: How do you see the supply chains and trade linkages getting restored once the crisis is over? How much time should it take, and how would India need to strategise its international trade going forward? PS: Supply chains, dependent on imports and more so from China, will be hurt because of the current pandemic. The capacity utilization will remain very low and will take some time to return to normalcy. In a scenario where the situation worsens, the supply chain of manufacturing sectors, that depend heavily on imports, may eventually run out of their inventories in a few weeks. It is difficult to predict the time when economic activi-

ty comes back to normal. We are not sure how the Covid-19 pandemic will span out and how long. However, the recovery might take several months if not years to come to pre-Covid-19 levels. As a remedy, India should prioritize producing intermediate goods to reduce dependency for imports from other countries in the long-run. However, this is not possible in the shortrun due to infrastructure and other constraints.

TPCI: Covid-19 has shown the importance of greater indigenous capabilities in an area like APIs for instance. Which sectors do you feel India should work on for building its indigenous capabilities now and how can it be done? PS: Today, the production is not confined to any particular place or firm. The competition drives firms to be part of bigger production network to reap the benefits of comparative advantages. We have moved from the world of ‘Self-sufficiency’ to ‘self-reliance’. Therefore, it is not possible to develop indigenous capabilities across sectors in the short term. Yes, we should improve our indigenous capabilities across sectors and some necessary ones are defence, pharmaceuticals, chemical industry, energy etc. Improving domestic capabilities need huge investment in research and development (R&D), a developed financial sector and world class infrastructure among others. We are doing much better than before on many of these indicators and improving our indigenous capabilities across sectors, though gradually. Professor Pravakar Sahoo teaches Macroeconomics and International Economics to Indian Economic Service (IES) probationers. He has 20 years of teaching and research experience that includes many academic and research institutes such as ICRIER, India; Bruegel, Belgium; East West Center, USA; Asian Development Bank Institute (ADBI), Japan; University of Saitama, Japan; University Antwerp, Belgium; PRI, MoF, Japan; Institute of Developing Economies (IDE), Japan; MSH, France; and RIIO, China. He has wide international exposure and served as a consultant to several national and international organizations. He has work experience on India, South Asia, Japan, Korea, China and US.n

April 2020 | Food And Beverage Matrix

FROZEN DESSERT TRENDS IN 2020

- Mr. Arun Varma, V.P. - Sales & Marketing, AAK Kamani continue to reinvent their menu with personalised frozen desserts that cater to the dynamic palates of their target market.

Product accuracy/ transparency

he year 2020 is all about innovation across industries. With changing mind-sets, preferences and tastes of new age customers, brands of every sector have realised the need for offering novel and innovative products, with most using state-ofthe-art technology and customer analysis for delivering beyond expectations. The frozen dessert market is no exception to these changes and developments. In order to not only acquire and retain consumers, but to also ensure long-term loyalty and emerge as market leaders, manufacturers are embracing the idea of becoming more aware of top dessert trends and are offering products in accordance. Here are some trends that are ruling the frozen dessert roost this year:

Customization The primary trend this year rapidly flourishing within the frozen dessert market is that of customization. Customers today increasingly prefer ‘make it your way’ offerings, and thus, manufacturers are leaning towards the same. This trend is gradually replacing traditional and rigid menus, considering every consumer is different with distinct tastes. Some also have certain dietary or allergic restrictions, due to which this trend has garnered massive favourability not only amongst the consumer-base, but also manufacturers.

Innovative flavours While traditional flavours like chocolate, strawberry, vanilla, butterscotch and several others continue to charm consumers, a large chunk has also shown openness to experiment with new, distinct and unconventional flavours in frozen desserts. Having realised this, manufacturers too are opting for fusion offerings by combining sweet with savoury (example – green tea, meat, taco, avocado, basil, wasabi and more) and are ensuring that they

Today’s discerning and healthconscious consumers are steering away from artificial ‘diet’ offerings that claim to be nutritious and low on the calorie-count, and this is applicable to the frozen dessert space too. There is an increasing need for accurate packaging and product information given on the label, especially the transparency of ingredients mentioned. In fact, these frozen dessert producers are also shifting towards trending or popular health ingredients and natural sweeteners with functional and nutritional advantages to assure the customer of their offering contributing to a healthier lifestyle.

Frozen beverage desserts Not only is a large chunk of consumers opting for unique flavours, but is also gradually preferring drinkable frozen desserts over traditional ice creams. Novel sorbet blended smoothies, thick shakes, iced coffees a.k.a. frappes with sauces like chocolate or caramel, and infused iced teas are now taking centre-stage in the market. These infused drinks are being created with delightful herbs, spices, or fruit chunks, and are also being marketed well to today’s openminded consumers in a way that makes them as pleasurable as solid frozen desserts. Such innovative usage of ingredients coupled with ensuring the right texture for achieving uniqueness is what is making these frozen beverage desserts sell like hot cakes in the market today.

Protein-rich offerings The frozen dessert market, realising the growing need for health-conscious consumers and fitness enthusiasts is catering to their needs by offering products that are rich in protein. This is in-line with supporting the ‘low carb’ dietary trend, which has taken the consumer base by storm, wherein frozen desserts are being loaded with protein, along with vitamins and minerals, and have minimal amounts of sugar. What makes them more appealing to customers is that not only are they packaged well, with a smooth and pleasing texture, but are also offered in diverse flavours (banana, mint, choco-chip, sea salt caramel, ice-cream cake and more), thereby going beyond conventionally healthy variants. n

MAINTAINING SUPPLY CHAIN KEY WORRY FOR FOOD PROCESSING COS IN LOCKDOWN

he Covid-19 pandemic has been causing economic woes to companies wih the 21day lockdown underway across the country and though ranging under essential services segment, the food processing sector, has been finding it tough in coping with the situation and its impact on business. The biggest worry has been disturbance in the supply chain and companies are trying to identify ways to handle the situation as it is important to maintain the supplies. Explaining the scenario, Simon George, president, Cargill India, states, "Like other industries, we are facing some difficulties in managing supply chains and logistics like interstate and intrastate transportation services. They are required to transfer grains, food ingredients / raw materials that we supply for the manufacture of food products and finished goods to big companies. We are working with government authorities to see how we can mitigate any disturbances in the supply chain.” He said that Cargill has 12 manufacturing locations across India engaged in the production of food and non-food items.

“We have already speeded up to keep our operations going as we supply vital commodities in India such as edible oil, wheat flour, dairy feed, poultry and aqua farmers, etc. that are critical to feeding people and animals.,” said George, while adding, “At Cargill, we are doing our best to ensure packaging and warehouse and transport operations impacting these essential food items are not hampered due to labour shortage or logistical challenges and deliveries can happen promptly. We have halted non-essential operations in full compliance with the government’s mandate.” He added, “At this moment our focus is on just two things keeping our people safe and ensuring that food reaches where it is needed. We are closely monitoring the situation to assess the situation and take an account once we are out of this crisis. Cargill is doContined to page no 11

PRIMARK’S ALL 376 STORES IN 12 COUNTRIES CLOSED TILL NOTICE; £650M LOSS

s a result of the rapidly changing situation regarding Covid-19, Associated British Foods plc is issuing an update on trading in its Primark stores, further to the update Primark stores representing 20 per cent of selling space and 30 per cent of sales were closed. Since then, and following the closure of all stores in the UK which represented 41 per cent of sales, all 376 stores in 12 countries are now closed until further notice. This represents a loss of some £650m of net sales per month. A variety of work streams have been established to mitigate the effect of the contribution lost from these sales and all expenditure is being reviewed. In a press release, the company states, “The first instance we have implemented a significant reduction in discretionary spend. We are making good progress in also reducing fixed costs following discussions with counterparties, in particular landlords, and welcome the recently announced government support in the countries in which our stores operate.” “As a result, we currently estimate being able to recover some 50 per cent of total operating costs.” “To manage Primark stock we have also regrettably informed suppliers that we will stop placing new orders.” The group has a strong balance sheet, substantial cash liquidity with some £800m of net cash at the half year, together with a revolving credit facility of some £1.1bn. Therefore, total available liquidity is £1.9bn. “Importantly, we reiterate that in aggregate, we have not seen a material impact in our sugar, grocery, ingredients and agriculture businesses.”n

Food And Beverage Matrix | April 2020

DKSH SUPPORTS UNDERPRIVILEGED CHILDREN IN INDIA

DKSH India collaborated with The Society for Door Step Schools in Pune, India, to help them reach out to underprivileged children with teaching tools and support their academic progress.

KSH India’s Human Resources team organized a day visit to The Society for Door Step Schools (DSS) in Pune, Maharashtra. The trip should help understand the organization’s signature program “The School on Wheels”. With this program, the DSS team reaches out with study material and teaching aids to children in locations where there is a lack of proper learning environments. DKSH India’s team also visited the municipal primary school. The children received a variety of reading materials by the Door Step School’s “Book Fairies” with the aim of enhancing their reading skills. Besides providing books, they conducted vocabulary games, narrated stories and sang in groups. DSS surveys out-of-school children from various remote and underprivileged areas and helps preschool children with reading and writing skills along with enrolling them into schools. They also provide children with free transportation to school to ensure that they can go to school regularly and do not drop out. These initiatives provide a supplementary educational support for the children who would otherwise be deprived of educational opportunities.

community and school intervention programs aims to address the three main issues of primary education of underprivileged children: Nonenrolment, wastage and stagnation. DSS also works with parents to raise their awareness and increase their participation in their children’s education in order to make the programs sustainable.

About DKSH

line with DKSH’s sustainability efforts. DKSH is deeply rooted in the communities it serves and strives to create positive impacts beyond business activities. Through different sustainability projects, the company creates opportunities for development and improvement across society. Mrs. Rajani Paranjpe, Founder of The Society for Door Step Schools, stated: “Education is a fundamental right of every child. In our endeavor to facilitate education for children from marginalized communities, we are happy to have DKSH’s support. Their help is going to support more than 1,000 children from the municipal school to achieve their expected learning levels.”

The collaboration with DSS is in

Atul Nagarkar, Managing Director,

Contined from page no 10

Similarly other food companies are also making sure that supplies remain unhurt and therefore taking measures for the same.

ing everything reasonably possible, to minimise business disruptions. As we provide essential ingredients, feed and food that nourish people and animals, we are taking this responsibility very seriously and strive to keep our operations running.“ Meanwhile, dairy giant Mother Dairy is also trying to maintain the supplies as milk is a very essential commodity. “At Mother Dairy, we are relentlessly working towards ensuring and meeting the demand of consumers for milk, milk products, Safal fresh fruits & vegetables and our Dhara edible oils across the region with no major supply disruptions. We have taken all adequate measures and are closely working with all our stakeholders to ensure uninterrupted, seamless supply chain even in these challenging times,” said a Mother Dairy spokesperson.

Highlighting measures taken by his company, Cornitos MD Vikram Agrawal said, “Cornitos products are being manufactured by Greendot Health Foods Pvt. Ltd. in Roorkee after taking all necessary Covid-19 precautions as notified by government. Cornitos manufactures ready-to-eat snack products like wheat flour tortilla wraps, nacho crisps, taco shells, dips, roasted nuts and seeds and pickles. We are ensuring as well as encouraging our distribution partners, to maintain manpower and vehicles required for supply of Cornitos products without any interruption and delay. We are taking care of sanitisation of transport vehicles and manpower associated with it, as well.” The company, meanwhile, suggested

DKSH India, commented: “We are happy to donate towards this good cause. We hope our contribution will help The Society for Door Step Schools to develop innovative teaching tools and materials. The goal is to help children achieve their expected learning levels and be adequately prepared with the basic education before they enter primary school.”

About The Society for Door Step Schools The Society for Door Step Schools (DSS) was founded by Mrs. Rajani Paranjpe, her student Mrs. Bina Lakshari and other colleagues from Nirmala Niketan College of Social Work in Mumbai in 1989. Expanded to Pune in 1993, DSS, through its that Central government may appeal to transport associations to help the nation in this critical period with respect to transportation charges and its availability. The company rues that while it was trying to maintain its supplies but ground realities are different than what Central government is notifying. Local administration is not cooperative and not allowing interstate movement of trucks. The company further suggested that to ensure smooth supply of food products every state should set up a 'Nodal Agency' to coordinate uniform dissemination and implementation of Central government guidelines. District magistrates and police in every district may be instructed to honour permits issued by authorised persons from other states/districts. Meanwhile, the MoFPI (Ministry of Food Processing Industries) has cre-

DKSH is the leading Market Expansion Services provider with a focus on Asia. The Group helps companies to grow across the Business Units Healthcare, Consumer Goods, Performance Materials and Technology. The service portfolio covers sourcing, market insights, marketing and sales, eCommerce, distribution and logistics as well as after-sales services. Publicly listed on the SIX Swiss Exchange, the Group operates in 36 markets with 33,350 specialists, generating net sales of CHF 11.6 billion in 2019. With its Swiss heritage, DKSH has been deeply rooted in Asia Pacific since 1865. The DKSH Business Unit Performance Materials distributes specialty chemicals and ingredients for food, pharmaceutical, personal care and various industrial applications. With 46 innovation centers and regulatory support worldwide, we create cuttingedge formulations that comply with local regulations. With around 1,100 specialists, the Business Unit generated net sales of CHF 1.0 billion in 2019.n ated a Task Force at its office to address the grievances of the food sector companies. Agarwal says that the Task Force and Grievance Cell made by MoFPI is a right move. It will help discuss and act on all issues related to the sector on a daily basis and keep a track of them during the lockdown period. Grievance Resolution Cell should help in proper interpretation of guidelines and resolving difficulties faced by the industry owing to enforcement variability issues.n

April 2020 | Food And Beverage Matrix

BRITANNIA PARTNERS WITH DUNZO TO DELIVER FOOD ESSENTIALS TO YOUR DOORSTEP

FSSAI TO CONDUCT E-INSPECTION OF HIGH RISK FOOD BUSINESSES DURING LOCKDOWN

T A

s an immediate response to ensure uninterrupted supply of essentials, Britannia Industries has partnered with Dunzo, India’s leading on-demand e-commerce platform to deliver all its products. Customers can avail the company’s products through the Dunzo app in under an hour of ordering from the ‘Britannia Essentials’ store. The app’s No-contact Delivery will ensure that the essentials such as biscuits, cakes, rusk, croissants, milkshakes, wafers, ghee and dairy whitener, are delivered safely and securely to users across Mumbai, Pune, Delhi, Gurgaon, Jaipur, Bangalore, Hyderabad, and Chennai. The first store in Bangalore will be operational today onwards. These products will be available at Britannia’s distribution centres and Dunzo will source them from this Point of Sale (PoS) to ensure the proper handling of the goods and enable better availability of these products across cities. Commenting on the partnership, Varun Berry, MD, Britannia Industries, said, “During this unprecedented time, it is

critical for us to maintain a continuous supply of our products which are daily staples in millions of Indian households. With a significant rise in demand for at-home delivery, we are happy to leverage Dunzo’s innovative and most advanced technology platform, to enable seamless delivery of products every day.” He added, “Our teams are working round-the-clock to respond to the current situation by innovating ways to get these products to reach homes in a safe manner.” “Across the country, there is a demand for essentials and in these extraordinary times, companies need to rise to the occasion. We at Dunzo are committed to helping our cities fight the Covid-19 pandemic. Dunzo’s delivery partners are enabling people to stay home by ensuring the essential needs of the city are met. Partnering with Britannia ensures that essentials are produced and packaged safely, adding to the safety measures that have been taken to ensure that our users, merchants, and delivery partners remain safe,” said Kabeer Biswas, CEO & co-founder, Dunzo.n

he Food Safety & Standards Authority of India (FSSAI) has decided to conduct online inspection of premises of such food businesses, which fall under high risk category in order to process their applications for licence/ registration. This was a decision taken by the FSSAI to avoid undue delays in processing of applications for licences during the period of lockdown imposed in the country. Under the FSS Act and licensing regulations thereunder physical verification and inspection is mandatory in certain high risk category food businesses such as meat and dairy. But due to the current prevailing condition of lockdown in view of Covid-19 pandemic, it was not possible to conduct physical inspection of such units. “This could delay the grant of licence/registration where licensing authorities decide to have inspection of food units before considering the applications of licence of the FBO, and therefore to avoid delays, it has been decided to consider e-inspection in place of physical inspection. This would help in processing of the application for the licence by the licensing authorities,” says a senior official with the FSSAI. The order says, “In cases, where licensing or registering authority decides to conduct inspection prior to

grant of FSSAI licence/registration certificate, the concerned authority may conduct e-inspection of FBO’s premise i.e ,authority may record observations by the means of videos or images submitted by the concerned FBO. The mode of submission of videos or images related to inspection during the lockdown situation may be through any possible media available, including live streaming, if possible. Upon receiving satisfactory videos or images of the FBO’s premises, the licensing authority shall further process the application without any delay. The authority can also download and keep the copy of such visuals for future references.” The order has asked the licensing authorities in the country that during such lockdown period the applications should be processed without much delay as food is an essential commodity. The order also says that the requirement of inspection should be kept bare minimum and such instances should be reviewed by the Commissioner of Food Safety. However, after return of normalcy, the authority may schedule the inspection of the FBOs to whom licence was granted during the period of lockdown, if required, says the order.

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April 2020 | Food And Beverage Matrix

POWDER-BASED FOODS COVER BASIC NUTRITIONAL NEEDS AND CUT COVID-19 RISK

t has a longer shelf life; it is better preserved, safely packaged and it can be distributed and prepared quickly, without effort and with minimum handling and transformation throughout the transport, preparation and cooking, therefore helping to reduce the risk and prevent infections that could occur during the process. Under such circumstances, powderbased food allows the delivery of essential nutritional value in the form of meals, shakes and food supplements. This way, it is possible to feed many people massively, quickly and safely. As demonstrated in the past weeks, this method could be especially helpful for hospitals, elderly homes or charity canteens, where it is crucial to minimise the risk of contagion or contamination from suppliers, cooks or other personnel who could spread of a virus or a disease. Such nutrition could also ease the situation for families who may no longer be able to benefit from provision of meals within schools.

Powder-based food is not only related to anecdotal nutritional supplements but rather covers large segments of the food industry. Approximately 40 per cent of the food we consume every day in the world, like bread, coffee, juice, cheese, ice cream, vegan milk, baby formula, spices, sweeteners, meat substitutes – are just a few of the many powderbased foods we all know. Blendhub, a global company specialised in the development, production and distribution of powder-based foods and ingredients, offers its support and resources and urges public institutions and the food industry to share the combined knowledge and experience, to work together and guarantee the supply of primary nutrition across the social groups and geographies most affected by the Covid-19 pandemic. These are the people for whom it is essential to access healthy food quickly, efficiently, safely while minimising the risk of contracting the virus from those who prepare the food, through the ones making it available, delivering or serving it, to the ones who consume it.

MCDONALD’S INDIA INTRODUCES ‘WORK FROM HOME’POLICY FOR MGMT & FRONTLINERS

estlife Development Ltd that owns and operates McDonald’s restaurants in west and south India has introduced a unique ‘Work From Home’ policy for its restaurant management teams and the frontline crew, who are unable to go to work due to the nationwide lockdown. The move is intended to keep the youth of the country productively engaged in these unprecedented times and upskill them for a strong comeback as soon as normalcy resumes. The company has adapted many of its classroom training modules digitally, and introduced e-learning modules, quizzes, masterclasses by managers and many more creative learning sessions, which employees can access on their phone while in quarantine at home. This initiative is aimed to make sure that the team continues to learn and grow even when the members are staying home. The e-learning modules include McCafé masterclass, equipment masterclass and a number of development and orientation programmes for employees across different positions in the restaurants, among others. The initiative is set to benefit the company’s close to 10,000 employees, who can access these modules at the click of a button on their digital devices including mobile phones. The company has created a strong framework to support employees through the process and track their progress on a regular basis. This has been enabled by the company’s strong digital capabilities that have been developed to support agility and innovation. Seema Arora Nambiar, senior VP, menu, marketing and people resources, McDonald’s India west and south, said, “At McDonald’s India, we are committed to the well-being and growth of our people. In these unprecedented times, we have created this unique programme to make sure that our crew is empowered to use their time efficiently. Through this, we hope to keep our people engaged, connected and motivated, so they are able to come back to work better and stronger.”n

April 2020 | Food And Beverage Matrix

OGAI URGES HORTI BOARD TO UTILISE MOTHER DAIRY INFRA FOR ORANGES IN LOCKDOWN

TOMAR LOOKS AT FARMING OPERATIONS AND HARVESTING, AGRI MARKETING AT MEET for agricultural operations in view of harvesting and sowing season were discussed in length. The states were again informed about the various exemptions which are as follows: •

•

he Orange Growers Association of India (OGAI) has urged the National Horticulture Board (NHB) to utilise infrastructure of companies such as Mother Dairy and its fruit and vegetable subsidiary Safal for procurement of oranges from Nagpur and Amravati region as the 21-day nationwide lockdown has affected the movement of inter-state trucks. Amol Totey, working president, OGAI, said, “In Maharashtra, especially in Nagpur and Amravati districts of Vidarbha, Buldhana and other districts have nearly 35% to 40% ready to harvest Nagpur oranges variety fruits still on plants. During curfew, special transportation passes are needed for vehicles provided by Government of Maharashtra. The one thing which we have noted is that there isn’t any problem for transportation within Maharashtra, but if we look at the major consuming markets like Delhi, Bangalore, Chennai and other places, required necessary instructions to pass the orange-loaded trucks.” “Mother Dairy has an efficient procurement system in Nagpur and Amravati region. The discussions are in pipeline but since, Mother Dairy can collect all the produce from the

Nagpur region and take them to their Mangolpuri plant in New Delhi which can be marketed directly as they have 450-plus retail outlets in various areas of national capital. So, they will be able to manage but because of the lockdown, the supply is still going on, but there are less buyers by the major consumption places like Delhi, Kolkata, Bangalore in the wholesale market.” he said. While talking about the transport facilities, he added, “NHB is coordinating with Mother Dairy and if we develop the front-end capacity properly then there will be more procurement. They can distribute oranges to hospitals and other institutions since there are many top hospitals and institutions in Delhi, Bangalore and in Chennai. The major thing is that Mother Dairy has good facilities of cold storages which will be useful and also RTO doesn’t check their vehicles during curfew otherwise, the other transport vehicles need passes during this period.” Meanwhile, due to unseasonal rain and hailstorm, the Government of India departments must work closely with state government machineries especially for immediate assessment under crop insurance risk cover as this is the peak harvesting season for Nagpur oranges.n

nion Minister of Agriculture and Farmers Welfare Narendra Singh Tomar held a meeting with the states through video conferencing here Wednesday evening. Parshottam Rupala, Minister of State; Kailash Choudhary, Secretary (AC&FW); Sanjay Agarwal, Special Secretaries, Additional Secretary (Agriculture) and senior officers of the ministry participated in the interaction held through VC. The crucial issues related to farming operations and harvesting, agriculture marketing and mandi operations, procurement at MSP, provision of inputs (seeds and fertilisers) and issues related to logistics and movement of agriculture/horticulture produce were discussed with agriculture ministers of the states, APCs and other senior officers of the states. The Union minister appreciated the efforts of states for their proactive role in undertaking agriculture activities even during the challenging time in wake of Covid-19 pandemic. He talked about the measures taken by the ministry to facilitate the activities related to agriculture and allied sector during the lockdown period. Also, the exemptions notified by the Government of India

•

• •

•

Agencies engaged in procurement of agriculture products, including MSP operations; Farming operations by farmers and farm workers in the field; ‘Mandis’ operated by the Agriculture Produce Market Committee or as notified by the state government; ‘Mandis’ include direct marketing, facilitated by the state government/UT Administration, directly from the farmers/groups of farmers. FPOs, Cooperatives, etc; Shops for Seeds, Fertilisers and Pesticides; Manufacturing and packaging units of Seeds, Fertilisers and Pesticides; Custom Hiring Centres (CHC) related to farm machinery; Intra and inter-state movement of harvesting and sowing related machines like combined harvester and other agriculture/ horticulture implements; Cold storage and warehousing services; Manufacturing units of packaging material for food items; Transportation for essential goods; Shops of agriculture machinery, its spare parts (including its supply chain) and repairs. Tea industry, including plantation with maximum of 50% workers. Contined to page no 18

SNOWMAN LOGISTICS IS CATEGORISED ESSENTIAL SERVICES AMIDST THE LOCKDOWN

s per regulation 30 of LODR (Listing Obligations and Disclosure Requirements), Snowman Logistics Limited (Snowman) is considered under the ‘essential services’ category as per the Ministry of Home Affairs (MHA), and accordingly all the warehouses of the company are functional and fully operational. The company remains committed to providing support for the storage

and distribution of essential goods to the community, especially food and pharmaceutical products.

The business of the company has not been adversely affected and demand for storage has increased. This increase has come in from various segments such as seafood, meat, poultry, QSR products, butter and healthcare products. The

cargo

meant

for

export,

accounting for approximately 30 per cent of the volumes handled by the company, is being stored leading to an increase in warehousing occupancy.

Imported products, accounting for approximately 5 per cent of the volumes handled by the company, have not been affected as these commodities are essential goods comprising of pharmaceutical products imported regularly in India during the lockdown period.

Apart from the initial few days of lockdown when transportation was affected and which is now improving slowly, there have been no major disruptions on the operations of the company. The company is focussed on providing uninterrupted services to its valued customers maintaining high standards of hygiene and safety of the personnel working at all the locations.n

18,000 CR TAX REFUND RELIEF TO TIDE OVER THE CRISIS

April 2020 | Food And Beverage Matrix

NESTLÉ EXPANDS USE OF BLOCKCHAIN TECH PLATFORM TO ZOÉGAS COFFEE BRAND

he Finance Ministry announced on Wednesday that it will immediately release ₹18,000 crore in tax refunds to around 1.4 million individual taxpayers and 100,000 businesses to provide respite against the covid-19 pandemic. “It has been decided to issue all the pending income-tax refunds up to ₹5 lakh immediately,” the ministry stated. It will also issue all pending goods and services tax (GST) and customs duty refunds, which would benefit businesses, including micro, small and medium enterprises. The other measures undertaken by the government to ease the liquidity problem of individuals and businesses include loan repayment moratoriums and cash transfers to the needy, distribution of additional grain and pulses to the poor. This comes at a time when businesses across the country are facing the challenge of paying wages to their workers with dwindling revenue streams during the lockdown period. “The Government of India has been responsive to the requirements of trade and industry since the industry, especially the micro, small and medium enterprises, required funds urgently and this will certainly help,” commented Chandrajit Banerjee, director general of industry body, the Confederation of Indian Industry (CII). Contined from page no 16

A presentation was made and states were requested for the following: To sensitise their field agencies for facilitating smooth farming operations including sowing, harvesting and marketing. To ensure expeditious permission for movement of staff and labour and goods, machines and materials of agencies engaged in these exempted categories of activities. To issue authorisation letters to companies/organisations having nationwide supply chain of essential goods, allowing them to issue regional passes for easy movement of critical staff and workers in order to maintain their national supply chain. While undertaking these activities the norms of ‘social distancing’ should be followed and proper hygiene and

estlé has expanded the use of the IBM Food Trust blockchain technology platform to its Zoégas coffee brand. The company has launched select editions of Zoégas whole beans and roast and ground coffee in Sweden. This ‘Summer 2020’ range is a 100 per cent RainforestAlliance certified blend of arabica coffee beans from three origins - Brazil, Rwanda and Colombia. Through block chain recorded data, coffee lovers will now be able to trace their coffee back to the different origins. For the first time, the company partnered with a trusted thirdparty , The Rainforest Alliance, to sanitation should be ensured at all public places. The Union minister assured the states that all the necessary help and support would be rendered to the states during this period which would facilitate them in facing the emerging challenges. The state agriculture ministers appreciated the efforts of the Union Ministry of Agriculture and expressed that the exemption provided for agriculture operations and activities have greatly helped the farmers and farming activites in the states. They also informed that strict adherence to norms of hygiene and social distancing are being maintained in various agriculture activities in the states. It was informed that the ministry has released e-NAM modules to enable the e-trading and bidding from source point by farmers, FPOs

independently provide reliable data beyond what is usually disclosed by the company. The brand provides their own certification information, guaranteeing the traceability of the coffee. This information is directly accessible to everyone with the IBM Food Trust block chain platform. By scanning the QR code on the packaging, consumers can follow the coffee journey from the growing locations to the Zoégas factory in Helsingborg where the beans are roasted, grounded and packed. The data includes information about farmers, time of harvest, transaction certificate for the specific shipments, as well as roasting period. The

company

started

using

and cooperatives. States may issue necessary instructions to give effect to the same which would facilitate the farmers in selling their produce at their doorsteps, ensuring availability of produce at consumption centres and decongesting mandis. Similarly, the intra and inter-state movement of harvesting and sowing related machines like combined harvester and other agriculture/ horticulture implements should be facilitated so that all states may benefit from it. During the discussion various issues were raised regarding harvesting procurement, availability of inputs, credit, insurance and inter-state movement of agriculture produce, some of which were solved at once and instructions were passed on to the states. Other issues which required deliberations were noted and states were assured that it would be looked into and necessary instructions would follow in due course.

blockchain in 2017 when it joined the trust as a founding member Over the past three years, it has scaled up and diversified the use of blockchain platforms to bring its transparency and sustainability efforts to life for consumers. It started giving consumers access to blockchain with IBM on products suchas Mousline purée and Guigoz infant formula in France. Together with OpenSC, the company is also piloting open blockchain to monitor and openly communicate data related to the sustainability of milk and palm oil. The company continues to leverage technologies to create better visibility of the whole value chain of its products and lead in making supply chain more transparent.n

The Union Minister informed that the Kharif National Conference will be held on April 16, 2020, through video conferencing to firm up the field preparations for ensuing Kharif season and urged the states to make advance preparations for all the logistics and be prepared for the conference. He talked about the usefulness of Aarogya App and urged the states to popularise its use among the farmers and other citizens. Finally, he reiterated that all farming activities and operations should be done with strict adherence to the norms of social distancing and hygiene.n

April 2020 | Food And Beverage Matrix

COVID-19: NOT YOUR USUAL FINANCIAL CALAMITY • •

•

ver the past century, the world had experienced several crises and paid its cost in economic, socio and humanitarian form. Several government officials, economists and policymakers currently are trying to estimate the loss due to Covid-19 in the form of job losses, human life, financial loss, and overall impact on the country’s GDP. Most importantly, it is essential to understand the duration of the imminent global economic and financial slowdown post Covid-19. This article endeavours to explain the difference in the nature of the various economic crises, which have distinct origins – pandemic, financial, wars and natural calamities. Out of these, the first two have been more prominent in the last century. Though they both impact micro and macro parameters such as income, hunger, health, trade, markets, demand, supply and polices adversely, their velocity of spread, penetration power among several strata of people and potency to impact human life differ.

Financial and economic crises There were 7 major financial crises that the world witnessed over the last 100 years. A parallel comparison will be drawn with the pandemic crisis with respect to micro and macro losses. The 7 financial crises, which the world witnessed in the last hundred years are: • • • • • •

•

The Great Depression: 1929-1932 The Suez Crisis 1956 The International Debt Crisis 1982 The East Asian Economic Crisis 1997-2001 The Russian Economic Crisis 1992-97 The Latin American Debt Crisis in Mexico, Brazil and Argentina 1994-2002 The Global Economic Recession 2007-09

There can be various origins from which economic crises occur such as pandemic, financial, wars and natural calamities. Since economies and businesses are relatively aware of solution and approach to tackle financial crises, it becomes a part of business cycles. But a pandemic crisis is riddled with uncertainty. Due to Covid-19, loss in world GDP is expected to be worth US$ 2 trillion, which is definitely difficult to recover in the coming years. The IMF has estimated the loan losses for global financial institutions at US$ 1.5 trillion during the 2008 crisis. Covid-19 is an exogenous shock to the economy. The epicentre of the problem lies outside the financial industry, in a real economy in which shops, services and business are being closed due to complete lockdown and incomes of employees involved are collapsing.

While a pandemic crisis has the capability of reaching almost all countries, a financial crisis may or may not be limited to a few economies or regions, but not necessarily. The Great Depression started when financial markets in USA collapsed suddenly within a week. The term Black Tuesday was coined when 88% of financial institutes collapsed. Nearly US$ 30 billion were lost in a day, wiping out thousands of investors. In the aftermath of the US stock market crash, a series of bank shocks emanated from Europe in 1931; taking the financial contagion to the United States, United Kingdom, France and eventually most parts of the world spiralled downward into the Great Depression. The Great Depression lasted from 1929 to 1939 and was the worst economic downturn in history. It took almost seven years to overcome this recession, wherein major monetary policies were changed and gold convertibility was abandoned in bits and pieces. This led to massive unemployment in US and Europe, wherein 15 million Americans and 6 million Europeans lost their jobs. Of course, there was no prohibition on mobility, but it took almost seven years to see the early signs of recovery. On July 26, 1956, Egypt nationalized the Suez Canal Company. France, Israel and United Kingdom initiated joint military action, with Israel invading the Sinai on October 29, 1956. The military action lasted for two months and in the midst of the turmoil and uncertainty, a financial crisis erupted. All four countries were soon seeking IMF financial assistance. It also had a lot of political consequences – Egypt’s independence, Israel’s survival as a nation, and a devastating blow to Britain’s Victorian aspirations. The Suez Canal was closed for 6 months resulting in trade diversion, cost increases and delivery delays impacting the current account balances of all four countries.

Similarly, the East Asian crisis continued for almost eight years when external debts ballooned alarmingly. Unemployment levels reached 12% in Indonesia, 9% in Korea and 8% in Thailand. On similar lines, all these financial emergencies occurred as a part of a business cycle starting from one specific region and then travelling to other places at a different pace depending upon the cause. What differentiates this financial crisis from a pandemic crisis is the certainty of revival and germane policies, which ameliorates the scenario. The 2008 subprime crisis was the deepest crash in the global economy since 1930 and the first annual contraction since the post-war period. The financial crisis which erupted in 2007 with the US sub-prime crisis deepened and entered a tumultuous phase by 2008. Lax regulatory and macroeconomic policies contributed to a build-up in imbalances across the financial, housing and commodity markets. United States GDP fell by Pandemic/epi- Time period demic Spanish Flu 1918-19 Asian Flu Hong Kong Flu HIV/ AIDS

1957-58 1968-70 1981 – Present

SARS

2002-03

Swine Flu COVID-19

2009-10 2019-Present

Source: World Economic Forum

nearly 4% in the 4th quarter of 2008. World GDP growth slowed down from 5% in 2007 to 3.75% in 2008 and 2% in 2009. The IMF estimated the loan losses for global financial institutions at US$ 1.5 trillion. The international financial system was devastated, which ruined US, Europe and Latin countries but kept Asian markets relatively isolated. Fiscal stimulus and easing of macroeconomic policies helped US and other major economies come out of this recession but it again took more than five years. Since the solution and approach are known and familiar to tackle a financial crisis, it becomes a part of business cycles, which have an expansionary and recovery phase as well. But for pandemic crisis, the situation is rife with uncertainty.

Pandemic Crises The 20th century saw major disease outbreaks, such as the Spanish influenza 1918-19, Asian influenza in 1957-58 and the Hong Kong Reason/cause

Human deaths

H1N1 Virus/pigs Approximately 50 million H2N2 Virus 1.1 million H3N2 Virus 1 million Virus/Chimpan- Approximately zee 35 million C o r o n a v i r u s / Approximately Bats 800 H1N1 Virus/Pigs 200,000 Coronavirus-Un- More than known 38,000 so far Contined to page no 22

April 2020 | Food And Beverage Matrix

Contined from page no 20

influenza pandemic of 1968-69. Since 1970, many countries have invested in the development of national influenza preparedness plans and building global influenza surveillance and monitoring systems. Early warning systems include a network of laboratories capable of identifying the reference strain of the epidemic. The outbreak of the coronavirus named Covid-19 in China in December 2019 is the latest in a series of diseases which includes SARS, bird flu, swine flu, Ebola, and HIV/AIDS that have moved from animals into human populations. Major outbreaks of infectious diseases have emerged throughout the course of history. If we observe the above table, we will find that there is significant heterogeneity in terms of death tolls and time of existence is relatively ephemeral. Also, there is uncertainty with respect to the availability of vaccine to curb the effects of the virus. There is no regular cycle to predict a pandemic crisis unlike in the case of a financial or economic crisis which are a part of business cycles with the phase of boom and bane. One of the estimates done for GDP loss due to any severe pandemic comparable to the size of 1918’s flu post 2010 says that World will shrink by 1.2%, EU will shrink by 1.9% and USA will shrink by 1.5%. But the current estimates suggest that the size of squeeze in the world’s GDP can be

more taking the worst scenario as a possibility. Due to Covid-19, the loss in world GDP is expected to be worth US$ 2 trillion, which is definitely massive to recover in the coming years. A comparison between the coronavirus crisis and the global systemic crisis of 2008 is foreseeable, but analysed from exogenous and endogenous risk they are relatively different. Subprime crisis of 2008 was a global systemic financial crisis fuelled by the endogenous interactions of market participants. Covid-19 is an exogenous shock to the economy. Instead, the epicentre of the problem lies outside the financial industry, in a real economy in which shops, services and business are being closed and complete lockdown by state and the income of employees involved is collapsing. There are other exogenous factors making it a unique challenge. Mobility of people is restricted unlike the sub-prime crisis, and may continiue to be quite subdued even after the storm has blown over. In turn, that means the appropriate policy response cannot be limited to reducing interest rates or purchases of corporate or sovereign bonds on the open market, but should also encompass forbearance and deploy targeted help to affected industries and people through appropriate policies.n

Let’s have a look on expected loss in GDP growth (%) due to Covid-19 in 2020 Country/region Best scenario Mid scenario Worst scenario Australia -0.3 -0.7 -4.6 Brazil -0.3 -0.5 -4.7 China -0.4 -6.0 -3.6 India -0.2 -0.4 -3.1 EU -0.2 -0.4 -4.8 Japan -0.3 -0.5 -5.7 Russia -0.2 -0.3 -3.5 USA -0.2 -0.4 -4.1 Source: McKibben and Fernando (2020) “Global Macroeconomic Implications of COVID-19: Seven Scenarios,” CAMA working paper 19/2020. Australia National University

HOSPITALITY, F&B INDUSTRIES, SUB-SECCTORS SEEK GOVT HELP TO DEAL WITH CRISIS

he hospitality, food and beverage and tourism industries as well as sub-sectors have sought government intervention and made a representation to the Prime Minister of India to offer support to the sector to withstand the challenges posed by the current Covid –19 crises. Rakesh Kumar, chairman, India Exposition Mart Ltd, said, “Hospitality industry supports the travel, tourism, and food and beverage industry and contributes Rs 5 lakh crore in the Indian economy engaging a sizeable number of people from MSME sector. The hospitality, food and beverage and tourism industry has been severely hit and is witnessing a massive distress due to the lockdown.” He further stated that the hospitality industry had submitted a detailed representation to the Prime Minister of India which included the following points 6 per cent interest subvention to the entire hospitality sub-sector. Moratorium of EMI payments for loans and working capital from financial institutions (both banking and non-banking). Deferment of all statutory dues such as advance tax payments, PF, ESIC, Customs duties at the Central government level or at any state government level, the excise fees, taxes, bank guarantees and security deposits and deferment of all renewals, across the sub-sectors supporting tourism, travel, hospitality and food and beverage industries. Waiving of electricity and water charges for the next six months or charged on the basis of actual consumption (not as per load). Wages compensation for the employees. Speedy GST refund. Auto-renewal of 70 plus licences which a hotel must acquire/renew for 2 years at no cost. Amendment in clauses relating to EPCG. Waiver of bar licence fee and reduction in excise duty linked to consumption. Offering a one-time, mobilisation

fund/advance to manufacturing organisations from sub-sectors of hospitality that could re-tool and start producing to meet the demands of the healthcare sector for Covid-19. Hari Dadoo, president, India International Hospitality Expo, said, “We have requested authorities to consider 50 per cent wage compensation for the employees in the sector and also the limit of ESIC/PF compensation for employees earning Rs 15,000 per month to be enhanced to Rs 30,000 per month and these facilities should be available for both industrial units and commercial establishments.” Anil Malhotra, president, Hotel and Restaurant Equipment Manufacturers of India (HOTREMAI ), said, “The sector is witnessing a huge cash crunch and speedy refund of the pending GST will be of great help to everyone, he further said, that CGST/SGST to be released immediately and in-case of an error, an ad-hoc payment of 75 per cent may be released. The entire GST should be at the rational rate of 3 per cent for the entire hospitality sector should be declared.” Amarjit Singh Ahuja, founder and president, Purchasing Professional Forum of India (PPFI) said, “In this period of the lockdown it is important that the government reduces excise duties and waives-off the burden of renewing 70-plus licences that the hotels have to procure/ renew every year, for the next two years.” Rajat Pandhi, president, Association of Resource Companies for the Hospitality Industry of India (ARCHII), said, “Due to loss in revenues, almost all businesses from our sectors (and allied sectors) are drying up their working capital and with the onus of salaries, EMIs, advance tax, PF, ESIC, GST, excise and licences, this industry needs immediate support from the Government of India to protect this employment generating sector.” Sanjay Khullar, vice-chairman, Seasons Group, said, “Due to loss in revenues almost all business from our sector (catering and hotels) has impacted.”n

Food And Beverage Matrix | April 2020

PROTECTING MSMES FROM THE COVID-19 CATASTROPHE

hile the world was bidding goodbye to 2019 and eagerly anticipating the new year, China’s Wuhan was being ravaged by the humungous outbreak of the contagious coronavirus Covid19. Cut to March 2020, from the colonies of Colombo to the boulevards of India, there’s hardly any country on the face of this earth which has been spared by this highly contagious and macabre experience. So much so, that the Indian government decided to impose a 21-day lockdown, starting March 25 in order to contain the contagious contagion and protect the lives of citizens. While this panIndian lockdown is necessary to flatten the country’s Covid-19 curve, it is expected to take a huge toll on business, particularly the country’s fledgling MSME industry.

THE IMPACT: According to the information received from the Central Statistics Office (CSO), Ministry of Statistics & Programme Implementation (MOSPI), the share of MSME related products in total exports from India during 2018-19 stood at 48.1%. Further, MSMEs’ contribution to India’s employment generation as per 73rd Round of National Sample Survey during the period 2015-16 stood at 111 million. Over the last few years, this sector has played a crucial role in providing mass employment opportunities at comparatively lower capital costs than large industries. It has also acted as a catalyst for bringing about the industrialisation of rural & backward areas, thereby, reducing regional imbalances, assuring of more equitable distribution of national income and wealth. However, the recent lockdown of the country is wreaking a major havoc for the MSME sector. Anecdotal evidences from media reports on the impact of Covid-19 on SMEs suggest that there is substantial reduction in the demand for goods due to closure of malls, shops, haat bazaars & weekly markets in the urban, semiurban & rural areas of the country. The scenario is quite similar for the international market. Sectoral estimates, for example, suggest that about ₹ 7,600 crore of leather export orders have been cancelled, ₹ 2,000 crore worth of carpet orders are stuck and handicraft sector losses are seen at ₹ 8,000 crore. This is resulting in acute shortage of working capital for MSMEs. Restrictions on the inter-state movement of goods is also impacting the maintenance of the timely delivery

credit rating. Government may also work on a compensation package to MSMEs based on decrease in turnover/income due to cancelled orders, production cuts, lack of workers, etc.

schedules. Another problem that the sector is facing is that MSMEs are not equipped with the work from home facility. The large-scale exodus of labour in search of livelihoods in the rural hinterland is another challenge faced by these businesses. Measures to contain the disease by lockdowns and quarantines are also leading to further and more severe drops in capacity utilisation as production in most of these units has come to a halt and inventories are piling up. Added to these woes is the fact that now that China seems to have contained this illness, its production units are running in full swing, thereby posing a threat to Indian MSMEs and eroding their share in other markets. This is evident when one looks at the ventilators being produced by China’s Aeonmed Co, which been working around the clock to produce its lifesaving ventilators. The world is undoubtedly procuring whatever it can, considering the threat of a shortage for patients who may require critical care. The gravity of this situation becomes apparent when one looks at some international comparisons for reference. OECD Economic Outlook Interim Report (March 2020) has clearly stated that a third of SMEs in China only had enough cash to cover fixed expenses for a month, with another third running out within two months. In Italy, 72% of the 6,000 responding MSME firms were directly affected by the situation because of a drop in demand or problems along the supply chain and/ or transport and logistics. Similarly, over one-third Polish SMEs that were surveyed experienced increased costs and reduced sales, with 27.5% of respondents already encountering cash flow problems. Further, 71.8% Korean MSMEs stated they would be affected by the outbreak, with more than half of these firms stating that they were unable to meet delivery dates due to factory closures in China.

THE RESPONSE: Anticipating some of these issues,

the government has taken a series of measures to ease, if not curb, these challenges. For example, the country’s central bank recently introduced Long Term Repo Operations (LTRO) worth ₹ 100,000 crore to help banks increase lending at cheaper interest rates. Government-run banks are also being encouraged to keep loans worth ₹ 60,000 crore on standby. The deadlines for filing belated Income Tax Return for all businesses for FY 2018-19 and GST returns have also been extended. The Finance Minister also announced that government will bear the EPFO contribution on behalf of employees as well as employers firms with less than 100 employees and with majority of those earning below ₹ 15,000 per month. While the efforts taken by the government to offer a cushion to these ailing businesses in the face of this unprecedented health calamity are commendable, more measures may be needed, considering the gravity of the situation. In the short run, a relief fund can be set up to help the MSME sector tide over this crisis and preventing commercially viable MSMEs from shutting down. Banks should be encouraged to allow additional sanction of working capital to this sector as they are currently facing severe cash crunch on account of subdued domestic demand and international trade. These firms should also be offered relaxations/ flexibilities, for at least 3 months, when it comes to issues like monthly EMI payments, loan instalments, and term liabilities without affecting their •

•

When it comes to supporting the workers of this segment, a significant proportion of which come from the bottom end of the pyramid of the society – the government can consider the idea of disbursing a universal basic income or wage support as they face mass lay-offs or salary cuts. In the long run, though, the industry needs to seriously think about becoming self-reliant in critical resources. Nothing has made the need for shunning import dependency more felt than the Indian pharmaceutical industry, which is reported to rely on China for a whopping 70% of its Active Pharmaceutical Ingredient (API) imports. Further, efforts must be made towards the integration of Indian MSMEs into global value chains. This could be done through promoting Brand India abroad through promotion of export-oriented MSMEs and making sure that the quality of Indian goods & services is at par with its other competitors. Another major move that will go a long way in transforming the contribution of this sector is formalising it, since at present a large chunk of this segment is informal. This will seriously mitigate some of the vulnerabilities that the workers in this sector are exposed to such as physical abuse or getting benefits like health insurance. Besides, considering that India is still grappling with substantial new Covid-19 cases everyday, a phased lifting of lockdown may have to be adopted. Activity may be reopened gradually, with social distancing norms well in place. This would also include monitorying of compliance and continuing stringent quarantine measures of identified Covid-19 hotspots across the country. n

While the pan-Indian 21-day lockdown is a necessary decision to flatten the country’s Covid-19 curve, it will take a toll on the country’s fledgling MSME industry. Anecdotal evidences shows a substantial reduction in the demand of goods, shortage of working capital, large-scale exodus of labour and severe drops in capacity utilisation. The government has taken a series of measures to ease these issues faced by the country’s MSMEs such as increase lending at cheaper interest rates and extension to file GST returns. Further short-term measures (like sanctioning additional working capital & a universal basic income for workers) and long-term measures (e.g. self-reliance in critical resources and incentivising MSME exports) may be necessary to secure the future of these enterprises.

April 2020 | Food And Beverage Matrix

AUTOMATION INDUSTRY LEADER 2020 AND AUTOMATION SUPPLIER OF THE YEAR 2020 Leadership and Success have become synonymous with Gandhi Automations as the winning streak and credibility of awards and recognition continues.

sector for e.g. pharmaceutical, chemical, automobile, food, cold storage etc. Each of these sectors has a unique material handling and warehousing requirement. Because of our expertise in this field we understand and explain to the client how he can make optimum use of the technology. The customer acknowledges this as the greatest value addition to him when he approaches Gandhi Automations for a particular product.

t seems 1 is just a number and never enough for Gandhi Automations as we once again bag 2 awards in a row at the prestigious events across 2 diverse industries. The nominations, long drawn jury process, and showcasing our world class standard products have ensured that we maintain the leadership position as well as the quality of our innovative range of products remains unmatched in the Indian market and also validates the fact of our ever-increasing global presence. It all started in the year 1996 where in our Directors formed the vision to cater to rolling shutter industry in India by bringing automation to them. The idea was one that was pioneered by them in India and through years of hard work, innovation, commitment to quality and reliable customer service, Gandhi Automations is now manufacturing all kinds of entrance automation solutions and loading bay technology meeting world class standards. With our unshaken determination and passion to serve our customers, we have turned every challenge and adversity into opportunity that helped us achieve 70% market share in the industry in short span of time. Automation is a powerful tool

and comes in many shapes and forms. In the Logistic and Supply chain industries, automation is generally used to make gains upon existing processes by improving efficiency, speed, reliability, accuracy and (eventually) cost savings as it reduces the impact of a labor shortage; thereby keeping the labour cost down. • Efficiency is critical to survival. Companies have to adapt rapidly, and if they're not adopting some form of robotics, they will not be able to compete. • Using automation to protect the supply chain does more than help companies react quicker or reallocate internal resources to other tasks. It can also help reduce insurance costs.

It is true that there exists a lack of standardization in door specifications and we are constantly working on how to bring about standardization in this field. At the moment we are working along with some of the prominent architects and consultants on this issue. It is an absolute joint effort to educate the end users on the importance and the advantages of standardization. In all this our effort is always to provide to the clients the best of quality and service We work as a consultant and we take into consideration the need of a customer & accordingly provide the best customized option. We provide customized solution as per specific need of a particular

We design, manufacture, supply, install and maintain highly sophisticated products. To fulfill our objective of providing products that are technologically advanced, energy efficient and safe we have a project engineering team that uses the latest design software combined with technologically advanced machinery to offer the customer a well-engineered product. All our products are based on the latest technology that conforms to very high standards of safety. Now we have further upgraded our systems by moving on to Artificial Intelligence – Our Products are now being designed with sophisticated systems which can be integrated with your BMS – Building Management Systems. Thereby giving you an ease of operation from anywhere and any compatible device.n For more details visit: www.geapl.co.in

Food And Beverage Matrix | April 2020

TRUMP PRAISES INDIA AFTER HYDROXYCHLOROQUINE DEAL

S president Donald Trump on Tuesday showered praises on India and Prime Minister Shri Narendra Modi for lifting the curbs on hydroxychloroquine exports on a case-by-case basis. Over the weekend, Trump requested Modi to lift its ban on exports of hydroxychloroquine (HCQ). “I bought millions of doses. More than 29 million. I spoke to Prime Minister Modi, a lot of it comes out of India. I asked him if he would release it. He was great. He was really good. You know they put a stop because they wanted it for India. But there is a lot of good things coming from that,” Trump told news reporters. With New York emerging as a major hotspot, the US is the worst-affected country due to the covid-19. The pandemic has caused almost 400,000 infections and more than 12,000 deaths in the US.n

SIMPLY FRESH DONATES FOOD AND ESSENTIAL SUPPLIES TO KIDS & PEOPLE IN NEED

n the wake of the Covid-19 pandemic and the shortage of food and daily essentials such as vegetables and pulses, Simply Fresh, India’s premium greenhouse supply chain, has donated groceries and essential food items to the underprivileged kids from an orphanage in Arjunpatla, Hyderabad. The company has provided groceries and vegetables to the orphanage, which will suffice all kids for almost one month. Furthermore, the company’s employees have come together to contribute a part of their salary and distributed food to more than 300 needy people through police commissioner’s initiative in Hyderabad. The company has a 150-acre precision farm with international standards of medicinal plants and fresh produce in a climatecontrolled greenhouse. They have implemented strict measures to ensure all their members, employees, partners, stakeholders remain safe from Covid-19. The management has undertaken an extensive drive to educate their employees on the seriousness of Corona virus, identifying infections, and measures to safeguard them from

being infected. The company is committed to facilitate uninterrupted movement of essential goods and services amidst the lockdown and is operational with all safety and health protocols. It is providing daily basic food and hygiene essentials to 400plus employees working at farm. They have also arranged for regular doctor visit along with the support of local cops and panchayat to check on health and well-being of all people working at farm. Sachin Darbarwar, founder, Simply Fresh India Limited, says, “These are challenging times for the less privileged communities as procurement and accessibility of essential items is a big challenge. We want to leverage Simply Fresh’s capability to solve these problems and make it convenient for these communities.” “We are confident that our contribution will have a positive impact on the communities that have been hit hardest by this unprecedented crisis. The entire team at Simply Fresh is proud to be able to help make a difference in the battle against this virus,” he added.n

GOVT DIRECTS FCI TO PROVIDE GRAINS @5KG PER PERSON FOR THOSE NOT UNDER NFSA

overnment of India has directed Food Corporation of India (FCI) to provide food grains @5 kg per person per month for three months at the rates of Rs 21/kg for wheat and Rs 22/kg for rice uniformly across the country to all beneficiaries not covered under NFSA to whom ration cards have been issued by state governments under their schemes. States have been given the option to lift these stocks in one go or on monthly basis over three months upto June 2020. In order to support the NGOs/charitable organisations involved in relief operations, Government has given directions to FCI to provide wheat @Rs 21/kg and rice @22/kg uniformly across the country to all such organisations without any upper limit on quantity. These directions are expected to have a salutary effect on the food grain supply position in the country by ensuring that every section of the society is provided access to adequate food grains at reasonable prices during the Covid-19 pandemic. As part of the mammoth exercise being undertaken by FCI to move food grain stocks across the country to feed the largest food security system in the world covering more than 81 crore people through 5.3 lakh Fair Price Shops (FPS), a new milestone was created on April 9,.20, when the agency transported 77 rakes carrying about 2.16 lakh MT. With this, the total food grain stocks transported by FCI since lock down is nearing 2.5 Million Metric Tonne.

Under the PM Garib Kalyan Ann Yojana (PMGKAY), a total of 12.1 MMT of food grains are being supplied to 81 crore people in three months @5 kg per person. FCI is fully geared up to meet the challenge of positioning such large quantity of grain in every state as per their distribution plans. Special efforts are being made to move a record quantity of 6 LMT boiled rice by end of April to West Bengal to meet the state’s requirement under PMGKAY. Plans have been worked out to move boiled rice from Chhattisgarh, Telangana and Odisha as these states contribute maximum boiled rice to the national pool. However, in order to create adequate storage space for induction of boiled rice into the state, FCI has already requested West Bengal government to speed up lifting of available wheat stocks from its warehouses. Along with undertaking transportation of stocks at unprecedented levels post-lockdown, FCI is carrying out procurement of rice in states like Andhra Pradesh, Telangana, Odisha and Chhattisgarh. It is also gearing up to start acceptance of wheat of winter crop in major procuring states like Punjab, Haryana, Madhya Pradesh, UP and Rajasthan as per the procurement plans being worked out by the respective state governments according to the safety protocols of social distancing. With the anticipated procurement of about 40 MMT wheat and 9 MMT rice during Rabi season, the food grain stocks in national pool will be fully replenished ensuring that there is no threat to the food security of the country.n

April 2020 | Food And Beverage Matrix

SUPPLY CHAIN ISSUES CAUSED BY COVID-19 MAY LEAD TO FOOD SECURITY CHALLENGES

world and seeing the continued but unnecessary panic buying behaviour of people in these situations,” says Matt Kovac, executive director FIA.

ollaborative and concerted efforts are required between the food industry and governments to keep supply chains open and minimise disruption of food manufacturing and distribution to ensure the food security of ASEAN communities, reports PwC. According to the report, with ASEAN already facing food security challenges due to rapid urbanisation and the growth of consuming classes, Covid-19 will likely exacerbate the region’s food security challenges in the short term. The PwC report titled, ‘Maintaining food resilience in a time of uncertainty', commissioned by Food Industry Asia (FIA), the regional association representing Asia’s food and beverage (F&B) industry, recommends that food and its broader supply chain are recognised as essential, the protection of the food industry labour force, ensuring borders remain open and that financial assistance is provided to the most vulnerable businesses and consumers, to minimise the impact of Covid-19 on food security in the ASEAN region. "Our discussions with major global food companies suggest that labour restrictions and supply disruption for inputs are the key challenges that the sector is currently facing in ASEAN. It must be recognised that supply chains remain open and supermarket

According to the study, positive steps are already being taken, with governments and businesses across the region helping to support their communities and ensure the supply of good quality food for ASEAN. shelves are generally well-stocked, suggesting that many of the measures put in place by governments and businesses are working well for now. Nevertheless, as the situation develops it will be necessary for stakeholders to broaden and strengthen mitigations, to ensure the region's food system continues to function effectively,” said Richard Skinner, Asia Pacific deals strategy and operations leader, PwC Singapore. With the food industry not only providing essential nutrition to ASEAN populations but also driving a large share of economic output and employment, the industry continues to be of huge importance to both the health and economic wellbeing of the region.

cent of the total labour force. The report highlights some of the challenges faced by government lockdowns including labour shortages, the shortages of inputs or raw materials as well as border challenges that can have a short term impact on food supply chains. “During a lockdown, if governments across the region put in place policies that hinder production across supply chains as well as trade barriers, this could lead to regional food shortages, especially when looking across the

Protection of labour supply, financial assistance for small businesses, targeted measures for smallholders, preservation of open borders for goods and social support for consumers are among the measures the reports recommend governments take to protect the supply chain. At the same time, workforce protection, customer and supplier outreach, inventory management and production flexibility are recommended as mitigation steps food businesses could take to minimise the impact food supply chain issues could have on food security.n

According to the report, the food value chain contributes around US$500 billion of economic output to the region, which is around 17 per cent of ASEAN’s total GDP. Additionally, the industry accounts for around 113 million jobs in ASEAN, or 34 per

Food and Beverage Matrix

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Saheb Bajaj CEO Punjab Sind Foods (India) Pvt. Ltd Arun Varangavkar Chairman Garkul Industries Shiv Prakash Bajaj Chairman Tresbon Consulting Solutions Rajiv Mitra MD Govid Milk and Milk Products Prakash Waghmare Waghmare Food Products Harvinder Bhatia Country Head Bitzer India Pvt Ltd Prassana Deshpande Director Chaitanya Group of Industries Ram Kumar MD Spectra Plast India Pvt Ltd Samayak Lodha MD MB Sugars

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