In India, the Closures industry is highly fragmented. Yet there are large and recognised companies catering to major customers along with a substantial amount of smaller companies making Closures for products like water. Sunil Sharma, GM / country head, Closure Systems International, in an email interaction with Nandita Vijay elaborates on why Closures are critical and more. Excerpts
Closures are an integral and critical component of packaging for food and beverage industry. Comment.
We agree. If you think about the primary purpose being served by food or beverage package, there are two basic factors. One is that whatever is packed should remain fresh and the other is that it should be tamper-proof both from an industry and consumer point of view. A significant amount of investment goes in by the food and beverage processing industry for packaging a product. The best variety of bottles and containers are preferred to fill the contents. Now if the right Closures are not selected to seal the pack, there can be serious implications. The package can lose a part of the intended shelf life, which impacts sales, or even worse, someone could tamper with the product resulting in loss of brand value.
Going by the indispensability of Closures in food and beverage packaging, could you give us a snapshot of this industry in India and global markets?
In India, the Closures industry is highly fragmented yet there are large and recognised companies catering to major customers along with a substantial amount of smaller companies making closures for products like water. Closures are critical for Carbonated Soft Drink (CSD) package. The pressure inside a bottle can reach over 100 psi. If there is a compromise on the Closure quality, it could end up losing the fizz in a bottle of CSD. If a wrongly/poorly designed Closure is used in a CSD package, it could lead to a serious accident because it could fly off the ‘bottle finish’ due to high pressure and lead to an injury.
In a Juice/Non-Carbonated Beverages (NCB) / Isotonic beverage package, the challenge is different. Here there is need to maintain the carbon dioxide level and ensuring that no oxygen could enter the bottle only because premature oxidation could lead to growth of bacteria which could be safety implications in NCB packages. Therefore it is required to have properly designed venting capability in the Closure.
Now we can compare these complicated scenarios with the still water market. In the case of still water, one needs to ensure that the package is sealed and that the plastic/resin being used for the Closure does not contaminate the contents in anyway.
In the developed markets like the US or Western Europe, the Closure industry is far more consolidated. Large food and beverage companies like to focus on their core competence and outsource the business of designing and manufacturing Closures to experts like CSI.
What, according to you, are the visible trends in this sector?
Sustainability is a key trend which has emerged over the last few years. Everyone is under pressure to reduce their dependence on fossil fuels. As plastics are the primary materials used in food and beverage packaging, this has resulted in a large amount of innovation being directed at ‘Source Reduction.’ The packages are now lighter and yet provide similar or improved functionality as before. Major customers are now demanding suppliers manufacture products closer to the bottling/packaging lines, as this means fewer fossil fuels will be used to transport the packaging materials, which directly supports the company’s sustainability strategy.
What are the innovations expected in the design of Closures for the F&B industry?
In addition to innovations related to sealing, sustainability, and source reduction, there is a lot of focus on improving the consumer’s experience. For instance, efforts to improve the package design from an ergonomic perspective and ensure ease of opening the pack by all age groups. Now there is need to think about the number of times one has struggled to open a Closure from a bottle of a favourite beverage. Especially in India, people even use tools like pliers and sometimes their teeth to open a Closure. If a bottle of juice needs to be opened by a diverse age group spanning children, teenagers, adults, and geriatrics, there is need to ensure the force required (removal torque) to open the Closure is within a specified range. This is where a lot of innovation goes into designing the Closure and selecting the raw material to manufacture the Closure to achieve this.
In the food segment, there has been an increasing demand for customised brand-specific Closures which help reinforce the overall brand identity of the product. In fact Closures go a long way to help in promoting one’s brand displayed on super market shelves along with the several competitor products. Even something as basic as cartoon characters printed on a Closure could sometimes determine the ability of products to go off-the-shelf.
Which segment of the industry is showing demand for Closures? Is it carbonated or bottled water, food and fruit juice?
These trends vary from country to country depending upon the maturity of the markets. In India, all segments are growing strong. Within the beverage segment, the highest growth is seen in NCB/juice segment, albeit off a very small base. Water is also witnessing excellent growth as there is a constant demand for clean and hygienic water, especially for on-the-go use. CSD also continues to indicate a steady growth pace, although it lags slightly behind the other segments.
What are the challenges / issues affecting the Closures sector in India?
There are several of them. Primary amongst them is unavailability of food grade resins / plastics for specialised applications. In India, a majority of the resins used in Closure manufacturing are imported. This puts a lot of pressure on costs and margins as the Indian rupee continues to be somewhat unstable / unpredictable against major currencies of the world like US dollar and Euro. For a long time, there were no uniform standards being applied by Closure manufacturing companies. But lately customers have demanded all suppliers obtain industry-specific certifications like FSSC 22000 in addition to the standard ISO certifications. FSSC certification requirements have levelled the playing field to some extent as it requires all competitors to invest significantly in upgrading facilities to maintain highest levels of cleanliness and hygiene during manufacture of Closures. Standardisation of packages and fragmentation of industry are few other challenges being faced by the industry.
What is the future of the sector?
The future of the sector is very bright. As a nation we only package a small fraction of food and beverage. Consumer convenience is the primary driving force and India’s emerging middle-class is behind the face of packaging consumption. As the number of ‘deprived’ decrease and are seen to be converted into ‘aspirers’ and they look for clean, hygienic food and beverage options which are available ‘on-the-go.’ Those strapped for time, would only opt for food or beverage packs ideal for on-the-go consumption. This leads to a shift from bulk packs to smaller packs. Food and beverage companies in India have started launching products keeping this trend and changing demographics in mind.
Has the sector witnessed a slowd