Sanjay Jain, EVP and Director at Elanpro (Elan Professional Appliances Pvt. Ltd.) has been working in the commercial refrigeration industry for the past 25 years. Sanjay founded Elanpro along with Ranjan Jain and Shashank Joshi and positioned the company amongst top five commercial refrigeration companies in India. Elanpro is one of the largest names for commercial refrigeration in Hospitality, Retail, Beverage and Pharmaceutical Industries.
Sweet, savory, spice and everything nice! Food tech industry never runs short on delicious delights. It is one of the booming industries in India and has significant contribution towards economic growth. With the advent of innovation in technology, the food tech industry has undergone a massive change owing to the increase in internet penetration and shift towards the virtual world. The technological advancements in the business has opened doors for small and medium players to increase their revenues by developing and offering products and services that satisfy the ever-growing consumer demands.
Industry experts often define Food Tech as ‘an emerging sector with huge potential for technology that can be leveraged to create efficiency and sustainability in designing, producing, choosing, delivering and enjoying food.” Leveraging the same idea, Indian food tech industry has seen a positive movement towards sustainable and personalized food choices. Startups and existing brands are moving to integrate waste reduction practices whereas food producers are dwelling themselves with robotic services and food management tools. With these means, the relationship between a food company/restaurant and its customers is no longer limited by the bounds of geography or even by the clock hours.
Indian Food Tech revolution started as soon as the food ordering apps entered the market bringing in the customers closer to their favorite food joints no matter the distance. Digital booking, and delivery apps gave the sector a much-needed makeover. The outburst of food-related startups in India helped shift the focus onto the technology that assists and supports food business operations making them more perceptive towards exploring new possibilities.
Why Food-Tech is integral, you ask?
As per a report by Research and Markets, the Indian food-tech sector is expanding at a compound annual growth rate (CAGR) of 39% during the 2021 – 2025 period and is expected to reach INR 1,868.19 bn by 2025. With this much amount of investment and income flow coming in, it is understandable that the companies are heavily banking upon the tech wave in this flavorful industry.
In the recent years, experts’ in food tech industry have focused on integrating technologies such as big data or the internet of Things (IoT) in the business flow. These innovations have also facilitated the production of more food in a shorter duration of time making the product more affordable and of higher quality.
Additionally, while catering to the growing demands of healthier and sustainable food options, food tech also lists out a wide range of benefits:
- Enhanced customer experience
- Safer production environment
- Accurate demand and supply forecast
- Reduced food wastage
- More food/cuisine menu options
- Reduced risk of equipment mishandling/breakage
What’s new in the food tech block?
Innovation never stops and neither does the range of possibilities in this industry. With every new recipe comes a new and inventive way of presenting it to the consumer. For an industry that never ceases to surprise, 2021 brought with itself exciting trends that have been winning hearts and soaring up the investments for the better part of the year.
Cloud Kitchen/Ghost Kitchens:
The ongoing global pandemic has shifted the focus for many dine-ins to a more sustainable business model. With reduced restaurant footfall, CRISIL estimates that the recovery of the 1.5 trillion rupees ($20 billion) sector will take at least a year after lockdown is lifted. Thus the need for a business plan that enables earnings while avoiding the risk of contracting the virus is more than ever. Ideating on the same, Cloud Kitchens also known as Ghost or Dark Kitchen is one of the most sort after in the food tech industry. Cloud kitchen are delivery only outlets with no dine-in options for the customers, they rely solely on online orders.
To many this emerging trend idea may not seem profitable but on the contrary, ghost kitchens enable even a small time player to open up their dream restaurant with minimum entry cost, low capital expenditure and lower rents. Allowing one entrepreneur to work with different brands at the same time from the existing infrastructure, the cost benefits only adds up the list of positives for this business model.
Additionally, the model also allows the food enthusiast to expand their business across geographies with minimum cost involved resulting in lower risks for the investors. Designed for speed, quality and scale, cloud kitchens are becoming a fitting space for even small start up to potentially compete the biggest players in the industry.
Artificial Intelligence & IoT:
One of the crucial developments is the inclusion of AI and IoT based solutions in the food tech industry. The upgrade can be and is used at multiple points (from farm to fork) enabling real-time monitoring of consumer behavior and digital food management.
In storage units and cold supply chains, AI & IoT is used for refrigeration solutions that helps in monitoring and controlling the accurate temperature to store food. Additionally, the advancements in blockchain and real-time food monitoring using the IoT devices provides food transparency to customers and brands. The end-to-end traceability increases trust between food producers and consumers, positively impacting brand credibility while developing cost-effective monitoring solutions.
Restaurant digitization further optimizes customer behavior analysis and demand forecasting using real-time data acquisition on food products and consumers. This leads to a better understanding of the market requirements and reducing losses while managing surplus food. Not to forget the same feature also creates resourceful ordering, and demand-equitable pricing for restaurants.
Food waste reduction is necessary to minimize environmental footprint and save cost which is now convenient with the use of AI based technology or devices.
The food industry is no longer limited to the conventional methods of serving its customers. The newer demands include transparency and safer food (producing, making, packaging and disposing) environment, healthier meal options and spoilt for choices attitude. It’s equally important not to overlook the fact that climate change and growing awareness about the environmental concerns are one of the driving factors of these inventions in the food tech industry. Companies and customers are not only looking for well-balanced menus but are also shifting towards decreased carbon footprint. Brands today cannot afford to ignore the technological boost as they are aiding businesses to improve efficiency, cut down on spending, and boost customer experience.