How Food-Service Industry will change post Covid

“The food services industry in India which has three or four segments restaurant business, food consumed at work and food consumed in factories, hospitals and educational institutions decide the food that we serve. All of these sectors will have very different world after presumption of business,” shared Sanjay Kumar, CEO, Elior India.

The world won’t be the same after COVID19 till the time vaccine or permanent cure is found. One of the industries that is going to really affected is the food service industry. It is the largest employers of labor and one of the worst hit that construction because at the end of the day this sector has the high intensity of labor be it restaurants, industries or factories were people cook and serve food.

The post COVID given the three or four drivers like social distancing, reduction in human contact and higher levels of safety in both cooking and handling of both raw materials and finished goods the food industry is going to be under tremendous stress. This stress is not going to be possible for the state to mitigate because as a developing country the government cannot be reimbursing wages as it is a practice currently in the developed economies. That’s not the case that the private enterprise should participate in the recovery of the industry then the approach to private enterprise has to be one of partnership and that partnership starts by having in sync trust that the food service industry is at the core of enabling economic recovery because it brings to together both agriculture, human resources at the front end and the drivers of the consumption in terms of household income.

SO, post COVID if the food industry has to recover and do business it will have to change the way it has been working. It will require significant investments, smaller players will be under increasing stress because banks are not going to lend to the current business models where there is no traceability of products or raw materials and with removal of Input Tax Credit there is no traceability left in the supply chain. “Post COVID unless GST is reinstated, Input Tax Credit is given to the food industry enabling the critical safety practices is going to be impossible because the willingness to make those investments by the corporates or food producers is going to be very low as those expenses will not be chargeable for claiming Input Tax Credit,” added Kumar. So, a facilitating regime which recognizes the challenges of the economic recovery and enables industry to then step up and make those investments and being able to take credit is what will provide for healthier and accelerated recovery for the industry.