At a time when people are only procuring what they really need, we need to ask ourselves – what impact would it have on our lives if the agriculture sector was deeply affected? We aren’t ready for the answer to this gruesome question. 70% of India’s rural households still depend on agriculture for their livelihood, and the COVID crisis has further distressed an already troubled set of people.
At a time when the winter crop is harvested and summer crop is sowed, the lockdown and operational restrictions that came with it have stomped over both these seasons. The transportation restrictions never let the produce reach mandis, the movement of migrant labor also created a dearth of man-force responsible for loading, distribution and even procurement operations were greatly affected. More so, India also lacks a robust network of cold storage when there are unexpected delays.
Most farmers choose to cultivate the cash crops that yield them more profitability but the need of the hour is to localise the supply chain as well as cultivation patterns to benefit the farmer by reducing transport costs, and bring them direct prices. There should be also be incentives for farmers to move towards food crops. The true impact on the industry will only be clear once the measures taken by the government come into play and decide at least the near future of a chunk of our population.
Another industry that will be affected with the domino effect of supply chain and production disruptions is the food and beverage industry. As the core of the industry depends on fresh produce, restaurateurs are likely to face the brunt of this. First, the inability to keep their restaurants functional. Next, the idea of social distancing becoming a norm and thereby making people’s dining out experiences an occasion rather than a habitual occurrence. This industry needs to start preparing for a post-crisis future, where food delivery is something the customers will find themselves drawn towards.
What does this mean for a restaurant that is strictly dine-in or one that is rigid and hasn’t yet explored delivery as a model? It’s time to re-think strategies and become a game changer in a post-COVID world. A concept that was coming into play even before COVID was what we call a ghost kitchen or dark kitchen, which was a comfortable way of making a business run and one where the focus could be on food quality, new recipes, and tantalising customer taste buds as they enjoy meals in the solitude of their home. If you take this concept a notch higher, you have yourself a cloud kitchen, a concept still nascent in the country but one that is here to make a mark.
What one can expect to reduce are up front and operational costs because a restaurant owner would need much less infrastructure by tweaking the business model to make it a cloud kitchen. Another cost that is removed is rent, which then becomes a revenue share model with cloud kitchen startups like Smart Kitchen Company. The idea of expansion doesn’t then require years of planning or capital generation; all it needs is coming up with ingenious ways to reach out to your customer and build a loyal base. Food is a space that has always been tricky, as we have witnessed multiple places that opened up with unique concepts only to shut down soon after because the overhead costs were too much to bare.
With just the right amount of confidence in a product, one can do wonders in the food space. Now, during a post-crisis era, this will be all the more important as the expectations of consumers will not just be restricted to delivery time, food quality or packaging but more importantly, the conditions in which it was prepared and the sanitation measures taken. A cloud kitchen will take care of all this, and also the probable inflation in raw material pricing due to the affected agriculture industry.
There are many challenges that are going to come around if the agriculture industry doesn’t bounce back to normalcy. There are bound to be ripple effects, but there are always ways to innovate and re-imagine existing structures and most importantly, adapt to the ever changing times we live in.