India’s F&B Industry in 2026: Where Resilience Meets Intelligence

India’s food and beverage (F&B) industry is heading into 2026 with momentum and mounting pressure.  Climate volatility is disrupting crop yields. Supply chains remain fragmented and fragile. Compliance requirements are tightening. At the same time, manufacturers are expected to scale output, protect margins, and deliver consistent quality in a price-sensitive, high-volume market.

Against this backdrop, India’s food services industry is projected to cross the USD 125 billion mark by the end of the decade, driven by rising incomes, digital adoption, and demand for convenience. The challenge for manufacturers is no longer just growth—it is how to grow sustainably and predictably.

According to Terry Smagh, Senior Vice President & General Manager – Asia Pacific Japan, Infor, the coming year will mark a shift in how Indian F&B companies think about technology.  Smagh argues that technology is no longer a back-office enabler but a strategic foundation for resilience, compliance, and scale across the food value chain.

From Factory Floors To Algorithms: AI Enters Core Operations

One of the clearest shifts underway is the move toward Industry 4.0-backed manufacturing, supported by artificial intelligence.

Smagh points out that modern cloud platforms now allow Indian F&B manufacturers to integrate data from manufacturing execution systems (MES), IoT-enabled production lines, quality management tools, and ERP platforms into a single operational view. This convergence is changing how decisions are made on the factory floor.

By 2026, AI is expected to play a central role in:

• Production planning and scheduling

• Automated quality checks

• Predictive maintenance of equipment

• Procurement and supplier optimization

Automation is also extending beyond the plant. Routine back-office processes such as invoice reconciliation, order validation, and compliance documentation are increasingly being handled through AI-driven workflows. Internal chatbots are beginning to support employee queries and customer interactions, helping companies scale without proportionately increasing headcount.

For a sector dominated by small and mid-sized manufacturers, this shift could redefine productivity benchmarks.

Why Supply Chain Visibility Is Becoming A Competitive Edge

India’s F&B supply chains are among the most complex globally, spanning farmers, cooperatives, processors, logistics providers, and retailers. Input uncertainty and transportation delays make visibility more valuable than excess inventory.

Smagh highlights that real-time supply chain transparency is fast becoming a decisive differentiator. Manufacturers that can anticipate disruptions, identify alternate suppliers, and dynamically adjust production plans are better positioned to manage volatility.

Digital traceability systems and smart labelling technologies are also gaining ground, enabling:

• Faster recalls

• Easier regulatory audits

• Better tracking of product origin and movement

Together, these tools are helping companies balance compliance, customer trust, and cost control, three forces that rarely move in sync.

Solving The Inventory Paradox In A Perishable Economy

Inventory management remains one of the F&B sector’s most persistent challenges.

Too much stock leads to waste. Too little results in lost sales. Rising input costs and unpredictable demand only intensify the problem.

Smagh notes that by 2026, AI-driven demand forecasting and synchronised resource planning are likely to become standard practice rather than exceptions. Even as packaged foods continue to grow at a steady pace, agility and precision will define which manufacturers protect margins and which struggle with inefficiencies.

The ability to align inventory levels closely with real demand signals could determine competitiveness across categories, from dairy and convenience foods to meat and ready-to-eat products.

Compliance Shifts From Manual Effort To Digital Readiness

Regulatory expectations around food safety, labelling, sustainability, and e-commerce distribution are evolving rapidly in India. Manufacturers face increasing scrutiny across additives, hygiene, packaging, and traceability.

Smagh emphasises that compliance is moving away from manual checks toward digital-first systems. AI and process-mining tools are enabling companies to stay audit-ready, adapt quickly to regulatory changes, and reduce dependence on paper-based processes.

For smaller manufacturers, this transition is particularly significant. Digital compliance tools allow them to meet regulatory standards with fewer resources, while also improving transparency and consumer trust.

India’s food processing sector accounts for 7.7% of manufacturing output and supports more than 7 million jobs. With the sector projected to reach USD 535 billion by 2025–26, the next phase of growth will depend on execution, not ambition.

Smagh’s view is that manufacturers investing early in integrated cloud platforms, aligning data, applications, and operations, will be better equipped for what lies ahead. Real-time visibility across procurement, production, and quality is emerging as the baseline for resilience.

For India’s mid-market-heavy F&B industry, the message is clear: technology adoption is no longer about modernisation alone. It is about survival, scalability, and sustained competitiveness in an increasingly complex operating environment.