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Contract manufacturing demand rises in F&B industry
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Thursday, 15 October, 2026, 08 : 00 AM [IST]
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Anurag More, Mumbai
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The Indian food and beverage industry is witnessing growing demand for contract manufacturing as brands seek to launch innovative products, expand production capacity and meet evolving consumer preferences without making substantial investments in manufacturing infrastructure.
The growing popularity of functional foods, beverages, ready-to-eat meals, snacks, dairy alternatives and nutraceuticals is creating opportunities for specialised manufacturing partners. Contract manufacturing enables companies, particularly startups and emerging brands, to focus on product development, branding and marketing while outsourcing production, quality assurance and packaging to experienced manufacturers.
The model also helps businesses reduce capital expenditure, manage operational risks and accelerate product launches while maintaining consistent quality and regulatory compliance.
According to market research cited by Harvestia Group, India’s food contract manufacturing market is projected to grow from US$440.19 bn in 2026 to US$692.35 bn by 2034, registering a compound annual growth rate (CAGR) of 6.22per cent.
India is also emerging as a destination for global food contract manufacturing, supported by cost-efficient production capabilities and expertise across diverse food categories. Contract manufacturers are increasingly helping domestic and international brands scale operations, respond to market demand and meet quality and compliance requirements.
Despite the sector’s growth potential, contract research and manufacturing services (CRAMS) in the food and beverage industry face several challenges related to regulatory changes, quality management, testing capabilities and product development timelines.
Ashay Mehta, founder and managing director of Doctors’ Analytical Laboratories Pvt. Ltd., identifies evolving regulatory requirements as a key concern for food businesses. Food Safety and Standards Authority of India (FSSAI) regulations continue to develop, while products intended for international markets must comply with additional country-specific requirements. Brands must therefore ensure that their manufacturing and testing partners remain aligned with applicable standards.
Fragmentation across the supply chain is another challenge. Companies often engage separate vendors for research and development, manufacturing, packaging and laboratory testing. This can result in disconnected data, complicate quality investigations and delay responses to product recalls or other compliance issues.
The pressure to launch products quickly can also affect quality outcomes. Startups seeking rapid market entry may overlook comprehensive product validation, potentially leading to product rejection or failures in meeting label claims.
Meanwhile, emerging categories such as probiotics and plant-based proteins require specialised analytical methods and advanced testing capabilities that may not be readily available across all Indian laboratories.
To address these challenges, Mehta emphasises the importance of integrating quality assurance and analytical testing into the early stages of product development. Working with accredited analytical laboratories from the formulation stage can help brands establish compliance requirements, validate product claims and minimise the risk of costly corrections after launch.
Companies are also increasingly seeking integrated partnerships with service providers that possess relevant regulatory recognition and experience in domestic and international markets. Such collaborations can streamline documentation, testing data and certification processes.
Investment in advanced analytical instruments, including liquid chromatography-tandem mass spectrometry (LC-MS/MS) and gas chromatography-tandem mass spectrometry (GC-MS/MS), is becoming increasingly important for detecting residues and contaminants with high sensitivity.
The food industry is also adopting quality management practices associated with pharmaceutical manufacturing, including stronger data integrity controls, documentation and audit readiness. These measures can improve traceability and strengthen confidence in product quality.
Transparency in quality and testing is becoming an important differentiator in the contract manufacturing ecosystem. Brands that provide stakeholders with access to relevant testing data can strengthen trust, improve accountability and build long-term business relationships.
Contract manufacturers that facilitate timely access to reliable analytical information and maintain robust quality systems are better positioned to meet the expectations of brands operating in an increasingly competitive market.
As Indian food and beverage industry continues to diversify, contract manufacturing is expected to play an important role in supporting innovation and production scalability. However, sustained growth will depend on stronger industry partnerships, investment in advanced testing infrastructure and a continued focus on food safety, regulatory compliance and transparent quality management.
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