The paper examines the effects of the COVID-19 pandemic on 13 large and medium food processing firms using census data on the COVID-19 impact on large and medium food production and manufacturing industries in Bhutan. The findings suggest that food processing firms have suffered a significant revenue loss due to the pandemic and medium-sized firms have suffered a greater revenue fall than large-sized firms. However, the revenue share of the food processing industry in overall industrial revenue has increased during the pandemic. The food processing industry has significant potential to cut dependency on imported food products. To support the growth and sustainability of food processing firms, the government could provide targeted interventions to improve the food value chain. In addition, the government could also improve the policy and regulatory environment to support the growth of agro-based startups and cottage and small industries, which will determine the future strength of the food industry in the country.