THE MAGAZINE OF THE PACKAGING SOCIETY A Division of the Institute of Materials, Minerals and Mining

Vol. 34 No. 3 May/June 2011 ISSN 1477-8467

Global standardsQuality control and safety

Lifting barriersMelamine-basedcoatings

Building trustEnvironmentallabels revised

Package to India A growing opportunity

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Advantage India

8 THE PACKAGING PROFESSIONAL MAY/JUNE 2011

Another big opportunity that has arisen from the convenience trend is the increasing use of ready meals. Large companies with technological strength inretort pouches, MTR foods Ltd and UflexLtd for example, have already created astrong position.

A unique technological development forready meals in India is the development of shelf-ready meals packs. This is a milestone of sorts, considering coldchain facilities in retail stores are still minimal. With this trend, India’s packagingprocesses are expected to move up thetechnology ladder, such as methods forhot filling, aseptic packaging and form-fill-seal in flexible packaging.

Organised retail designWith the shift from old-fashioned small-scale retailing to organised large stores,product manufacturers have had to modernise packs. Milk, for example,shifted from being sold loose to flexibleplastic pillow packs and now into premiumliquid cartons.

Brands and packers are paying greaterattention to pack design in order to helpproducts break through shelf clutter. Hightechnology companies like IDE-division ofTata Elxsi are seeing huge demand foruniquely designed packs and graphics.Given specialised stacking requirementsfor organised retailing shelves, packers arenow providing many more features like taping and banding for attractive display,as well as efficient shelving.

Capitalising on flexibilityA big chunk of Indian consumers with lowpurchasing power continue to fuel the demand for low unit prices, hence theprevalence of small sized packs in the form of 1-10 gramme sachets. Flexible packaging has most successfully capitalised on this trend, given its low-cost.

The Indian consumer goods packaging industry is moving forward at a rapid pace as the economy strengthens buying power.Convenience packs and organised retail design will set firms apart. Asma Siddiqi,Research Analyst at Euromonitor International, highlights recent trends.

concerns about the environmental impactof packaging have risen but there is a needfor both development and clarification.

At 393 billion containers, India’s packaging market is huge, estimated to represent almost 10% of the global market, in terms of unit volumes. It is alsoone of the fastest-growing markets in theworld, clocking an amazing 11% year-on-year unit volume growth between 2005-2010. Flexible packaging has the lion’sshare, followed by other popular packs –paper, rigid plastic, glass. Metal and liquid cartons, though relatively smaller currently, have seen dynamic growth overthe past three to four years.

Packing for convenienceLonger working hours and the increasingshare of working women have driven consumers to seek convenient/easy-to-use packages, including spouted beveragepouches, easy open end cans, and easy dispensing laundry care closures. Thetime-strapped are increasingly consumingfoods and beverages on the go and areseeking lightweight, non-fragile, re-sealablepacks. This has fuelled demand for smallpacks of liquid cartons, PET bottles, metalbeverage cans, as well as thin-walled plastic containers.

T he Indian packaging industry haschanged radically over the past two to three decades. From an era

when products were mostly sold loose and opening pack closures was often a struggle, the industry has transformed,shifting rapidly from loose to packagedgoods and seeing great improvements inpack quality. The rise in consumer incomeshas been a key enabler, which has empowered them to afford more expen-sive, but higher quality packaged goods.

However, Indian packaging remains inthe middle on the packaging developmentcurve. It lags behind developed packagingmarkets of the West on per capita packaging consumption and is still a highly fragmented industry. Furthermore,

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9THE PACKAGING PROFESSIONAL MAY/JUNE 2011

INDIAN PACKAGINGSPECIALSECTION

It remains a key pack for several high consumption products like shampoos,chewing tobacco, toothpaste and fairnesscreams. Large players, such as Uflex Ltdand DS Group, lead over small/mid players because of bigger scale and lower costs. Energised by the sachet success story, new categories like biscuitsand crisps have moved to mini packs too.

Spiralling material costs Although the market has been expanding,rising packaging prices in 2010, especiallyfor kraft paper, aluminium foil and plastics(accentuated by the surging crude oilprices), are thinning margins of consumergoods companies. While leaders like Hindustan Unilever Ltd and Dabur India Ltdare trying to hedge packaging materialcosts, large packers with high bargainingpower may not be able to accommodatethis for long, thus pushing them to hikeconsumer prices.

Liquid potentialLiquid cartons will also see strong growthconsidering the huge marketing effortbeing made by Tetra Pak for this pack type and because its ambient shelf life isespecially suitable for Indian retailing. Metalcans are likely to be next, benefiting from

rising consumer affordability and riding onthe back of high growth in products suchas soft drinks and alcoholic drinks.

Flexible packaging will remain king, considering its application for a wide variety of consumer goods due to costcompetitiveness. But its biggest challengeis the adverse impact on the environmentcreated by its disposal. Rigid plastic toowill continue to hold a preferred place, due to its advantages of low cost and good barrier protection. Although glass sitspretty in many large volume products likealcoholic beverages and carbonates, it islosing to plastics and flexibles, and thismay intensify in the future unless glass gets innovative, more cost competitive and lightweight.

Tighter legislation Legislation has progressively tightened in India, and in recent times has been very bold. This has been most notable in the form of the early 2011 ban on flexible packaging for chewing tobacco tohelp reduce its adverse environmental impact. But the bigger challenge is to havestronger law enforcement.

Recycling initiatives have risen in tandem with rising packaging waste. But efforts remain scattered and often

only conducted by individual companies.The government needs to play a larger and more central role. Major players like Tetra Pak India Pvt Ltd, and ITC Packaging & Printing Ltd, have this focusalready and are better prepared thansmaller companies. Bio-polymers and reduced packaging material will hopefullyalso be a commercial reality over the nextfew years too and not mere ideas inside apacker’s lab.

Increasing investments will make thescale of India’s packaging market muchmore globally competitive in the comingyears. Low cost manufacturing advantageand special technological capabilities, including laminates/flexible packaging, flattened cans, closures and paperboard,will prove to be unique competitive advantages. The trend has already begunwith increasing investments seen fromlocal companies such as Jindal Poly FilmsLtd and Uflex Ltd.

Packaging unit volumes in selected markets: 2005-2010

4,000

3,000

2,000

1,000

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World

ChinaUSA

IndiaJapan

Russia

Germany

Brazil

Indonesia

Mexico UK

8

7

6

5

4

3

2

1

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Total packaging unit volume of containers2010 (billion)

CAGR % 2005-10 (unit volume containers)

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FURTHER INFORMATION

Euromonitor InternationalTel: +44 (0) 20 7251 8024. Website: www.euromonitor.com.

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The Indian packaging industry comprises a unique blend of traditional, political and geographical influences. Eoin Redahanexamines its roots and green shoots.

Subcontinental

10 THE PACKAGING PROFESSIONAL MAY/JUNE 2011

robustness, using PVC and polypropylenein gauges of 100-500 microns in severalshapes, including tubes and cuboids.

The sun also has a bearing on aspects of packaging, including colour choice andprint quality. However, Hiren Panchal of Litmus Packaging Design, based inAhmedabad, India, says that the sun hasless of an influence on aspects includingprint than some would think. ‘Honestly, we never take care of this issue, as here in India consumption is immense. So, the product is not going to be in direct exposure of the sun for much time’.

Manufacturing changeDespite the challenging climate, the sector is thriving. ‘The country’s GDP is growing at 9-10% per annum. The packaging industry is growing evenquicker. From the hand assembly techniques that were used 10 years ago,companies are now importing the very best in box production, and the quality of finished products is improving all thetime’, Lennie claims.

fitted to the premises to prevent any outside contamination. Once we havemanufactured the packaging, it is immediately sealed into transit cartons.’

With the monsoons pouring forth forthree months of the year, he adds thatboard-based products are particularly atrisk and must be protected using extra liners and polythene outers and innerswithin the transit cartons.

Heat, too, is an issue. According toLennie, manufacturing operations must be kept at a constant humidity and climate controls are kept in place. Roadconditions and long travel distances have necessitated more durable retail packaging. Bell Packaging India has produced packaging for increased

T hey squeeze through innumerablebureaucratic hoops. They are madeto wear English-sounding badges

and don garish garb for festivals. The roadsare bad, the journeys are protracted and the sun’s heavy breath is relentless. Dust nestles in every nook, and then the monsoon rains persist. The path from processing to point of sale for Indian packaging items may not be smooth, but the industry has never been so rewarding. The idiosyncrasies of religion,tradition, colonialism, geography, climateand politics have combined to sculpt a distinct market.

For Peter Lennie, Head of Bell Packaging India, in Mumbai, ‘India is anamazing country to operate in’. He pointsout that there is a greater respect for packaging on the subcontinent. ‘Unlike inEurope, where packaging is perceived bythe public and politicians as being evil anda disposable item, in India it is appreciatedand reused. Typical examples are plastic bags, which are made in a muchthicker micron than we see in Europeansupermarkets. As a result, they are muchstronger and therefore reused’.

Dust never sleepsThere are, however, many challenges inherent in the Indian packaging sector.Lennie explains that the climate and dust are constant encumbrances, ‘In our factory, we have had to introduce stipulations to ensure the packaging areais dust free. ‘Our Indian personnel wearspecial clothing, secondary doorways havebeen introduced and additional seals

The country’s GDP is growing at 9-10% per annum. The packaging industry is growing even quicker.

‘’

Cosmetics packaging design. Image courtesy ofDesmania, New Delhi, India

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