FNB News - “Huge potential in semi-urban, rural regions”

You can get e-magazine links on WhatsApp. Click here

INTERVIEW

“Huge potential in semi-urban, rural regions”

Monday, 27 June, 2016, 08 : 00 AM [IST]

German Engineering Federation’s (VDMA) liaison office in India at Kolkata serves Indo-German economic relations in different engineering sectors. This office promotes the activities of VDMA member companies in India. VDMA India office maintains close relations with the Indian industry, Indo-German companies, embassy and consulates and various Indian industry associations, particularly with CII, FICCI, EEPC, ASSOCHAM, FIEO, CAPEXIL, ICC, and IGCC. Rajesh Nath, MD, German Engineering Federation (VDMA), in an email interaction with Anurag More, highlights the growth and emerging trends in the food and beverage packaging sector in the country and more. Excerpts:

Where do you see the packaging for food and beverage trade in the next five years?
The food packaging industry is India’s fifth-largest sector with a current worth of nearly US$40 bn. By 2020, it is expected to reach over US$65 bn. With a per capita consumption of 24 kg per year, Indian packaged food market is still at an early age. Due to rising incomes, urban lifestyle changes and modern retail trade, the food packaging market will expand distinctly. As urban regions account for more than 80 per cent of the demand for packaged food, there is a huge growth potential in semi-urban and rural regions. As about 70 per cent of India’s population lives in rural regions.

If we look at the numbers: India’s per capita annual packaging expenditure was US$20 in 2011, which is significantly lower than the top 20 market average of US$347.6. The low per capita expenditure offers a huge business opportunity for packaging companies. India’s emerging market is one of the most attractive to foreign investment and this also includes the packaging industry in India.

What are the packaging requirements for food and beverage industry in India?
For raw and processed foods, India needs packaging material which is suitable to the country's climatic variations. The country's heat and high humidity are two problems that can reduce the shelf life of packaged goods. It would be particularly important to focus on the seals and maintaining their integrity. But more important than the climate is perhaps the lack of a good supply chain or refrigeration in retail outlets and at home. This is a big barrier to many of the packaged food formats familiar to consumers in the West.

At the same time, a heavy focus on cost means that cheaper flexible packaging formats are often chosen over rigid packs that may offer greater protection for the product but that would force a higher retail price.

Where does India stand compared to developed countries in terms of food and beverage packaging?
India has made significant progress with regard to food and beverage packaging. Although the per capita consumption of packaged food and beverage industry is smaller compared to developed countries, today’s packaging technology which is available in India is quite similar to the one in developed countries. As the Indian food and beverage industry is growing rapidly, creating awareness of product possibilities by utilising advanced packaging and processing technologies is very important so that the latest and best technologies can be adapted. With India being the second-biggest producer of food and beverages after China, the market has a huge potential for Foreign Direct Investment concerning the technology of food processing and food packaging machines. VDMA India helps the Indian companies to connect with German companies in order to build cooperation, exchange technology and provide them with the newest information about innovations within the food packaging industry.

Brief us about the current regulations for packaging and labelling in food & beverage industry.
The Indian food processing industry is regulated by several laws which govern the aspects of sanitation, licensing and other necessary permits that are required to start up and run a food business. The FSSAI provides for separate packaging and labelling regulations known as food safety and standards which lay down the statutory and regulatory requirements for packaging and labelling of products. A plain reading of the packaging and labelling regulations, show that there are different kinds of products: pre-packaged, proprietary and other specific products as mentioned in the regulations.

The packaging and labelling regulations provide the general requirements for labelling of food products prescribed under the FSSA, as follows:
a. The particulars of declaration required under these regulations to be specified on the label shall be in English or Hindi in Devnagri script: Provided that nothing herein contained shall prevent the use of any other language in addition to the language required under this regulation.

b. Pre-packaged food shall not be described or presented on any label or in any manner that is false, misleading or deceptive or is likely to create an erroneous impression regarding its character in any respect;

c. Label in pre-packaged foods shall be applied in such a manner that they will not become separated from the container;

d. Contents on the label shall be clear, prominent, indelible and readily legible by the consumer under normal conditions of purchase and use;

e. Where the container is covered by a wrapper, the wrapper shall carry the necessary information or the label on the container shall be readily legible through the outer wrapper and not obscured by it.

In addition to these general requirements specified above, every package of food shall also carry the following information on the label: name of the food; list of ingredients; nutritional information; declaration regarding veg. and non-veg; declaration regarding food additives; name and complete address of the manufacturer; net quantity; lot/code/batch identification; date of manufacturing or packing; best before and use by date; country of origin for imported food; and instructions for use.

Do you have any suggestions for inclusion or exclusion of specific standards to help in the growth of the industry?
The preamble of PFA (Prevention of Food Adulteration Act) laid emphasis only on provisions for prevention of food adulteration. FSSA lays emphasis on consolidating the laws related to food and establish FSSAI for laying down science-based standards for articles of food and to regulate their manufacture, storage, distribution, sale and import, to ensure availability of safe and wholesome food for human consumption and for matters connected with them. The new objectives clearly go far beyond the objectives of PFA.

The PFA dealt with countless government ministries handling different food sectors as per separate orders, like the fruit products order, and other orders related to vegetable oil products, edible oils packaging, milk and milk products and meat food products, which were issued at different points of time and were sometimes overlapping and inconsistent. On the other hand, a unified Act like FSSA enables unidirectional compliance. The administrative control of the FSSA has been assigned to the ministry of health and family welfare thereby establishing a single reference point for all matters and eradicating any possibility of multiplicity of orders or the chance that any coordination problems are caused.

Apart from the harmonisation of laws relating to food quality and standards with established international norms, FSSA aims at regulating food hygiene and safety laws in the country in order to systematically and scientifically develop the food industry. Thus, the food processing industry may see FSSA as a mixed blessing but in the end the health of the consumers is more secure with the FSSA than with the PFA. Having a standardised Act like FSSA is a step towards new Western standards in consideration of food hygiene etc.

According to you, the current regulations are more industry-friendly or consumer- friendly? Why?
With the FSSA from 2011, the industry has now a standardised policy regarding the packaging and labelling of food and beverages. Even if this meant a higher burden on the food packaging industry. But the FSSA has a clear structure as it is controlled by the ministry of health and family welfare compared to the old complicated PFA. Therefore, communication regarding laws, guidelines etc. is easier to get hold on. The new regulations promote companies to implement the newest technologies in order to meet the requirements by FSSA and stay competitive in the market at the same time. As mentioned before, the FSSA guarantees the hygiene and safety of food and beverages for the consumers as the new regulations harmonise with international standards. The FSSA might not be industry-friendly in the short-term, but in the long-term it puts India in a better position regarding technological progress in food processing and packaging and secures the health of the consumers/ customers.

What steps are being taken by the association for the betterment of the industry?
VDMA India offers Indian food packaging companies’ powerful partners from Germany for the expansion of the industry in India. Their advanced technology and the variety of their products, which are optimally tailored to the specific customer requirements, strengthen the economic performance of the Indian manufacturers and help them meet the requirements of FSSA. Automation, food safety, hygiene, flexibility, quick format changes and the efficient use of resources dominate food processing and packaging machinery construction and our member companies are market and technology leader since many years. This plays an important role especially in a diverse market as India, with a lot of different requirements across the country.

Therefore, VDMA offers a network of companies all related to the same industry and promotes collaboration between these companies in order to bring the food processing and food packaging industry uptodate on the newest technological possibilities.