Driving Growth: Supply Chain Optimisation for India’s Food Industry in Mumbai and Maharashtra

India’s food industry, valued at $389 billion in 2025 and projected to reach $700 billion by 2030, presents vast opportunities for business expansion. Mumbai, India’s financial hub, and Maharashtra, a leading agribusiness state, are critical to this growth. For senior leaders, implementing supply chain optimisation strategies is essential to enhance Mumbai food logistics, overcome infrastructure challenges, and achieve Maharashtra scaling for sustainable success.

Industry Overview & Context

Mumbai, with 22 million consumers, is a vital food logistics hub, while Maharashtra, producing 20% of India’s agri-output, supplies key crops like grapes and dairy from Nashik, Satara, and Kolhapur. The regional food value chain spans farm procurement, processing, urban distribution, and retail driven by QSRs, kiranas, and e-grocery. APMCs manage procurement, and FSSAI and GST Council oversee compliance and taxation.

Key trends include:

• Urban demand surge in Mumbai: Rising incomes fuel demand for convenience foods, necessitating advanced Mumbai food logistics for supply chain optimisation.
• Infrastructure gaps: Limited cold chain facilities and urban congestion hinder efficient rural-to-urban connectivity.
• Government investment: Cold chain corridors and agri-logistics hubs aim to improve operational efficiency and support Maharashtra scaling.

1. Mumbai’s Food Logistics and the Hidden Costs of Supply Chain Optimisation Challenges

Maharashtra’s food supply chain is evolving, creating opportunities for supply chain optimisation:

• PMKSY and PLI 2.0: The Pradhan Mantri Kisan Sampada Yojana (PMKSY) and Production Linked Incentive (PLI) 2.0 schemes promote millet processing, snacks, and cold storage, providing financial incentives for business expansion.
• Maharashtra State Warehousing Corporation (MSWC) PPPs: New public-private partnership (PPP) cold-chain corridors enhance storage and transport, addressing bottlenecks in supply chain optimisation.
• Mumbai’s D2C and e-grocery boom: Quick commerce, accounting for over two-thirds of e-grocery orders, reflects a shift to Direct-to-Consumer (D2C) models, demanding agile Mumbai food logistics.
• FSSAI licensing dashboard trials: Trials in urban food clusters streamline approvals, boosting operational efficiency.
• State Budget 2025: Allocations for logistics infrastructure, agri-export hubs, and GST input credits support Maharashtra scaling and supply chain optimisation.

2. Key Challenges & Nuances

Despite progress, challenges persist, requiring strategic supply chain optimisation:

• High costs and congestion in Mumbai food logistics: Traffic and limited infrastructure inflate costs and delay deliveries, impacting profitability.
• Cold chain and last-mile inefficiencies: Maintaining an unbroken cold chain in Mumbai’s dense urban areas remains complex and costly.
• Regulatory fragmentation: Navigating state and city regulations complicates compliance and slows business expansion.
• Volatility in rural procurement: Price and supply fluctuations for onions, milk, and grains disrupt consistent supply.
• Informal intermediaries and fragmented warehousing: Non-standardised practices and fragmented storage increase costs and reduce transparency.

3. Strategic Implications Using a Hybrid Consulting Lens

A robust supply chain optimisation strategy integrates management, finance, legal, and technology perspectives to address challenges and drive growth.

• Go-to-Market (GTM) / Growth Strategy

1. For QSRs: Expand into Thane and Navi Mumbai, using multi-format kitchens (cloud kitchens, delivery-only units) and digital delivery tie-ups to optimise Mumbai food logistics and drive business expansion.
2. For FMCG: Develop Mumbai-specific SKUs, such as smaller pack sizes for kirana stores, and use hyperlocal marketing to enhance brand presence, supporting supply chain optimisation.

• Finance

1. Leverage PLI-linked working capital: Access PLI 2.0 incentives to fund infrastructure and technology, enabling supply chain optimisation.
2. Optimise GST credits: Streamline GST input credit processes to reduce costs and improve profitability.
3. Model hub-and-spoke ROI: Analyse ROI for hub-and-spoke models to justify investments in centralised warehousing and efficient last-mile delivery.

• Legal

1. Ensure local compliance: Adhere to FSSAI and Mumbai FDA regulations, proactively addressing updates to streamline operations.
2. Standardise contracts: Develop robust contracts with transporters and vendors to ensure accountability and support supply chain optimisation.
3. Handle EPR norms: Comply with Extended Producer Responsibility (EPR) norms for packaging, integrating sustainable practices.

• Technology

1. Implement predictive demand tools: Use AI-powered forecasting to optimise inventory, reduce waste, and ensure availability, enhancing supply chain optimisation.
2. AI-based routing: Deploy AI-driven routing to streamline delivery routes, cut fuel costs, and improve times in congested Mumbai.
3. IoT for cold chain: Integrate IoT sensors for real-time monitoring of temperature and humidity, ensuring transparency and preventing spoilage.

• Operations

1. Partner with co-located warehouses: Collaborate with multi-tenant warehouses to share costs and improve operational efficiency.
2. Digitise inventory flows: Implement Warehouse Management Systems (WMS) for real-time visibility and streamlined stock management.
3. Upskill workers: Train personnel in modern logistics technologies to enhance productivity and support Maharashtra scaling.

Illustrative Examples

Real-world examples demonstrate the impact of supply chain optimisation:

• A snacks brand established a distribution hub in Navi Mumbai, reducing delivery cycles by 36% and scaling to Pune within two quarters, showcasing effective supply chain optimisation.
• A dairy startup, backed by PLI funds, deployed IoT-enabled smart chillers along Nashik-Mumbai routes, improving milk shelf life and reducing spoilage by 30%, highlighting technology-driven supply chain optimisation.

Conclusion

For senior leaders in Mumbai and Maharashtra’s food industry, supply chain optimisation is critical for sustainable business expansion. By addressing challenges like congestion, cold chain inefficiencies, and regulatory complexities through integrated management, finance, legal, and technology strategies, businesses can achieve operational efficiency. Leveraging government incentives, adopting innovative technologies, and fostering partnerships will drive Maharashtra scaling and position the region as a global food industry leader.

About LawCrust

LawCrust Global Consulting Ltd. delivers cutting-edge Hybrid Consulting Solutions in Management, Finance, Technology, and Legal Consulting to ambitious businesses worldwide. Recognised for our cross-functional expertise and hybrid consulting approach, we empower startups, SMEs, and enterprises to scale efficiently, innovate boldly, and navigate complexity with confidence. Our services span key areas such as Investment Banking, Fundraising, Mergers & Acquisitions, Private Placement, and Debt Restructuring & Transformation, positioning us as a strategic partner for growth and resilience. With an integrated consulting model, fixed-cost engagements, and a virtual delivery framework, we make business transformation accessible, agile, and impactful.

For expert legal help, please contact us:

• Email: inquiry@lawcrustbusiness.com