With Industry 4.0 being promoted globally, the technical status, challenges, and upgrading directions need to be clarified for China’s traditional fermented food industry; strategies and policy suggestions are required for the upgrading of the industry. Field research, questionnaire survey, and literature analysis reveal that China’s traditional fermented food industry is decentralized, intelligent manufacturing has not been properly applied to the industry, and a green manufacturing system has not yet been completed. Meanwhile, the industry faces many challenges such as weak capability in independent research and development of core technologies and equipment as well as lack of a clear upgrading path. Therefore, key technologies should be enhanced by unearthing the fermentation metabolism mechanism and developing independent complete equipment, and standardization shall be strengthened to promote end-toend integration. To establish a novel fermented food industry, China should strengthen top-level design and strategic guidance, promote breakthroughs in key theoretical and technological foundations, nurture a new model of shared manufacturing, encourage policies and support measures, and improve industry standards and ecosystems.