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Booming consumer goods packaging trends
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Thursday, 26 February, 2015, 08 : 00 AM [IST]
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Vaibhav Verma and Manish Malhotra
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fiogf49gjkf0d Though India is one of the largest producers of foods and agro-based products (estimated at Rs 500 billion), 20% of these get wasted due to non-availability of processing and packaging.
Over the years, the food packaging industry has undergone tremendous change and with technological advancements, the process continues. That is because, to remain in the main line, it is important for organisations to come up with latest machines that not only simplify current operations but also help in reducing cost and effort.
In broader sense, organisations must have packaging machines that lessen the trouble of weighing, filling and sealing. Automatic and high-speed machines have an edge over traditional food packaging machines due to obvious reasons and a smart marketer has to evolve and adapt to the changes quickly. Owing to the demands of the customers and retailers, organisations across different sectors are focussing towards environment-friendly food packaging techniques for different types of food products. Usage of recyclable material is high in demand and industries are driving their efforts in developing this technique.
Marketers believe that slowly conventional way of packaging food items such as tea, coffee, milk powder, spices, and herb powders would be totally outstripped by those practising environment-friendly methods. This practice has multiple benefits that include conservation of natural resources and reduction of waste that ultimately leads to cost saving.
However, the prime focus of the manufacturers remains aseptic food packaging that retains the nutrition, freshness, aroma and texture of the food item. People have become much health-conscious and aware of the favourable practices being followed all over the world; therefore, organisations must know that those evolving with the needs of the customers will only survive. Manufactures and marketers must note that modern customer is educated and aware of the things; he reads labels, makes notes and compares the products with those of others on the basis of what’s printed on the packet.
Customers are now making wise shopping decisions and thus key players of the industry must develop their food packaging style accordingly. Packaging needs to be interactive that would help the customer to make a right decision. An intelligent marketer should now focus on various customer touch points, creating a package that gives sufficient information about the product inside and is not loaded with excessive data. To allure a smart and intelligent customer, it should be ensured that product packaging delivers the correct message without the inclusion of meaningless slogans, icons and symbols. These food packaging trends are growing fast in the FMCG (fast moving consumer goods) sector and in order to sustain marketers, the Indian packaging industry has changed 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 packaged goods and seeing great improvements in pack quality. The rise in consumer incomes has been a key enabler, which has empowered them to afford more expensive, but higher quality packaged goods.
However, Indian packaging remains in the middle on the packaging development curve. It lags behind developed packaging markets of the West on per capita packaging consumption and is still a highly fragmented industry.
India’s packaging market is huge, estimated to represent almost 10% of the global market, in terms of unit volumes. It is also one of the fastest-growing markets in the world. Flexible packaging has the lion’s share, followed by other popular packs – paper, rigid plastic, and glass. Metal and liquid cartons, though relatively smaller currently, have seen dynamic growth over the past three to four years.
New trends in packaging
Packaging for convenience
Longer working hours and the increasing share of working women have driven consumers to seek convenient / easy-to-use packages, including spouted beverage pouches, easy open-end cans, and easy dispensing laundry care closures. The time-strapped are increasingly consuming foods and beverages on the go and are seeking lightweight, non-fragile, resealable packs. This has fuelled demand for small packs of liquid cartons, PET bottles, metal beverage cans, as well as thin-walled plastic containers.
Another big opportunity that has arisen from the convenience trend is the increasing use of ready meals. Large companies with technological strength in retort pouches, MTR Foods Ltd and Uflex Ltd, for example, have already created a strong position.
A unique technological development for ready meals in India is the development of shelf-ready meal packs. This is a milestone of sorts, considering cold chain facilities in retail stores are still minimal. With this trend, India’s packaging processes are expected to move up the technology ladder, such as methods for hot filling, aseptic packaging and form-fill seal in flexible packaging.
Organised retail design
With 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 flexible plastic pillow packs and now into premium liquid cartons.
Brands and packers are paying greater attention to pack design in order to help products break through shelf clutter. High technology companies like IDE-division of Tata Elxsi are seeing huge demand for uniquely designed packs and graphics. Given specialised stacking requirements for organised retailing shelves, packers are now providing many more features like taping and banding for attractive display, as well as efficient shelving. Even in the produce department, packaging is taking a high-tech turn to promote sales. Companies with products ranging from chips to lettuce are getting on board combining new digital and mobile technologies with head-turning graphics to deliver the promotional goods. Products are incorporated a quick-response (QR) code on the back of the bag. Consumers with a QR reader-enabled smartphone can scan the code in the store to link to details about product. After the consumer notices the colourful package and picks it up, the QR code creates an interactive experience for consumer in real time.
Capitalising on flexibility
A big chunk of Indian consumers with low purchasing power continues to fuel the demand for low unit prices, hence the prevalence of small-sized packs in the form of 1-10 gm sachets. Flexible packaging has most successfully capitalised on this trend, given its low-cost. It remains a key pack for several high consumption products like shampoos, chewing tobacco, toothpaste and fairness creams. Large players, such as Uflex Ltd and DS Group, lead over small/mid players because of bigger scale and lower costs. Energised by the sachet success story, new categories like biscuits and crisps have moved to mini packs too.
Spiralling material costs
Although the market has been expanding, rising packaging prices in India, especially for kraft paper, aluminium foil and plastics (accentuated by the surging crude oil prices), are thinning margins of consumer goods companies. While leaders like Hindustan Unilever Ltd and Dabur India Ltd are trying to hedge packaging material costs, large packers with high bargaining power may not be able to accommodate this for long, thus pushing them to hike consumer prices.
Liquid potential
Liquid cartons will also see strong growth considering the huge marketing effort being made by Tetra Pak for this pack type and because its ambient shelf life is especially suitable for Indian retailing. Metal cans are likely to be next, benefiting from rising consumer affordability and riding on the back of high growth in products such as soft drinks and alcoholic drinks.
Flexible packaging will remain king, considering its application for a wide variety of consumer goods due to cost competitiveness. But its biggest challenge is the adverse impact on the environment created by its disposal. Rigid plastic too will continue to hold a preferred place, due to its advantages of low cost and good barrier protection. Although glass sits pretty in many large volume products like alcoholic beverages and carbonates, it is losing to plastics and flexibles, and this may intensify in the future unless glass gets innovative, more cost-competitive and lightweight.
Increasing use of metal packaging due to lifestyle changes
With the high growth in per capita income in metro areas and increasing number of working women, the demand for metal packaging is growing, too. Metal food cans are able to keep food/beverages fresh for a longer time without refrigeration and this helped in its adoption in the Indian market. Demand for metal beverage cans have also grown due to changing lifestyles amongst Indian youth who are increasingly looking to adopt more functional pack solutions and are willing to pay more for it. Demand for metal aerosol cans, often higher margin products in the beauty and personal care industry, grew due to growing demand from brand owners.
Killer paper
The innovative killer paper technology can overcome food poisoning issues, especially in non-veg food products like chicken, fish & red meat. The packaging material works on the mechanism of innovative sensor packaging film which changes its colour from yellow to blue to indicate the spoilage of packaged content. Post-colour changing mechanism, the trend of “killer paper” is serving as recent movement in the industry. Killer paper, a material helps preserve foods by fighting the bacteria that cause spoilage. The paper contains a coating of silver nano particles, acting as powerful anti-bacterial agents. The commercial usage of killer paper for food product packaging is not feasible yet. Firms dealing with these technologies are working towards the costing part and may be minimising the nano shape of silver particles.
Odour-absorbent packaging
Adding to the freshness part of packaged food, odour-absorbent packaging is the current movement. The usage of flavour and odour absorber films is increasing among food packers. The usage of flavour and odour absorbers’ films and sachets reduces the transfer of aroma or flavour between components of packaged food. The usage of the technology is not restricted to perishables but also expanding towards FMCG production.
The consumer focus on health and nutrition has not diminished the demand for indulgent and premium products, as well as ethnic and exotic meals. Indulgence remains a key role for food and drink, whether for relaxation and reward, or as part of a celebration. This presents a number of opportunities to provide packaging that increases visibility of premium foods, uses or provides the look and feel of extravagant materials, and colours that reflect the premium nature of the product. Examples of innovations to meet the ‘indulgence’ trend include packaging for upmarket confectionery, and exclusive biscuits and chocolates. Higher quality printing and coating, embossing and hot foil stamping, and proprietary shapes and sizes, are used to create product uniqueness, enhanced product visibility and on-shelf differentiation.
(The authors are asst professors, Banarsidas Chandiwala Institute of Hotel Management & Catering Technology)
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