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Packaging Industry in India – Growth prospects
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Monday, 14 June, 2021, 12 : 00 PM [IST]
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Karan Chechi
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Packaging of a product protects it from dirt, insects, dampness, breakage. Food products such as biscuits, jam, chips, chocolate, butter, cheese, are required to be tightly packaged to maintain their quality. Packaging provides ease in carriage of the products, for example PET bottles of non-alcoholic beverages make the carriage and stocking easy.
Packaging also serves as an identification of the product. A product is packaged in a special sized, coloured, and shaped container so that it can be easily distinguished from the products of the competitors.
According to the Packaging Industry Association of India, the India Packaging Market was valued at $50.5 billion in 2019, and it is expected to reach $204.81 billion by 2025, registering a CAGR of 26.7% from 2020 to 2025. Packaging is one of the high growth industries in India and is developing at 22-25% per annum and is becoming a preferred hub for the packaging industry.
Currently the fifth largest sector of India's economy, the industry has reported steady growth over the past several years and shows high potential for expansion, particularly in the export market. A high degree of potential exists for almost all user segments which are expanding appreciably, such as processed foods, hard and soft drinks, fruit, and marine products.
The leading companies operating in this industry are UFlex Limited, EPL Limited, Huhtamaki India Ltd., Mold-Tek Packaging Ltd., Kanpur Plastipack Limited, etc. Companies are practicing flexible packaging which is one of the rapidly developing segments of the industry, combining the highest qualities of film, paper, and aluminium foil to provide a wide range of protective characteristics. UFlex Limited offers flexible packaging solutions for the entire spectrum of product types which include solids, semisolids, powders, granular materials, viscous fluids, pastes, and gels. UFlex was recognised as the ‘India's Most Trusted Company 2019’ in Flexible Packaging Solutions by the International Brand Consulting Corporation, USA.
Plastic packaging is abandoned as it is extremely wasteful and has a negative impact on the Earth’s ecosystem. The companies are coming up with advanced ideas such as biodegradable and recyclable packaging solutions that will convert uncollected plastic waste/laminate waste into biomass upon degradation. Huhtamaki India Ltd., ensures innovative packaging to ensure consumer satisfaction and stay competitive in the market.
The company believes that proper packaging is mandatory to preserve the product’s state and induce consumers to purchase them. The company’s packaging product portfolio covers food products, beverages, pet food, tube laminates, health care, personal care and household products. Kanpur Plastipack Limited has developed a modified atmosphere bag for food packaging in collaboration with an overseas partner, which is specially designed for the Indian market. The company lays huge stress on true sustainability and has developed flexible intermediate bulk container (FIBC) or bulk bags, which are made up of 100% recycled material. Over the past years, the packaging industry has been a significant area driving innovation and development in the country. It is enhancing the different assembling areas including agribusiness and FMCG fragments. The major factors responsible for the growth of the packaging industry are availability of raw material, advancement in technology and growing general awareness regarding environment friendly packaging. The packaging industry in India is well poised.
The disposable income of consumers is rising, resulting in a tremendous increase in per capita spending and demand for best of the products in the rural and urban market. The demand for aseptic packaging is growing, which is used for various food products and beverages, including milk, soup, tomatoes, pudding, and several others. It is also used in the pharmaceutical industry to ensure that medications are not polluted with harmful bacteria.
Retort Packaging is another mode of packaging which has a unique process that uses heat and pressure to sterilise food. It uses thermal food processing method and is popular with food producers across the world. The emergence of bio-based and biodegradable films is the primary factor that is expected to fuel the growth of the flexible packaging market. Moreover, the demand for small packs has given an impetus to the flexible pouch segment, which can be used for packaging small materials.
The packaging industry is poised to strengthen rapidly and is led by the increasing use of innovative products. In terms of packaging, the food packaging industry is the only industry that has witnessed a maximum number of transformations and innovations. Consumers need their food items to be clean, safe, and simultaneously look appealing. With regards to food packaging, MNCs have an excellent system in place, which consists of a devoted R&D department, which conducts different exploration-based trials utilising the most recent advances in technology and hence continuously enhancing the consumer experience.
The emerging e-commerce business has drastically scaled up the Indian packaging industry. The country has witnessed a surge in the e-commerce sector over the past decade and tier 2 and tier 3 cities have also joined the race with rising number of online shoppers.
Starting from daily essentials such as fruits, vegetables, to lifestyles products and digital gadgets which require extensive packaging to protect the product from breakage, pilferage, or other damage has led to an increase in demand for rigid packaging such as cartons or corrugated boxes. Amid the e-commerce surge, the Indian packaging industry is witnessing steep growth and is one of the strongest growing segments.
According to the Indian Institute of Packaging (IIP), packaging consumption in India increased to 200% in the past decade, from 4.3 kgs to 8.6 Kgs per person per annum.
The increasing demand for consumer packaged goods is also driving the packaging market, as packaging is largely used for food products, followed by pharmaceuticals, and personal care products. Growing demand from these end-user sectors is creating a huge potential for expansion of the industry. The impact of Covid-19 has been felt in almost all the sectors.
However, there has been an increase in production of necessary supplies such as medicines, sanitisers, disinfectants, food products, dairy products, all of which require a proper packaging. Thus, indirectly contributing to the growth of the packaging sector despite the Covid-19 pandemic.
Consumers across the country are focusing on packaged products and eye pleasing packaging certainly persuades the customers to purchase the product. Customers order or buy those products that have soulful packaging. However, there are certain challenges being faced by the industry, i.e., costly skilled manpower, rising input costs, lack of marketing, branding. But despite these challenges, the packaging industry emerges to outshine in future owing to the technological developments such as speciality films and laminates, multi-layers films, injection moulded containers, aseptic packaging, aerosol packaging and several others.
(The author is research director at TechSci. He can be reached at sales@techsciresearch.com)
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