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The dairy packaging market and innovations in packaging
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Monday, 01 March, 2021, 12 : 00 PM [IST]
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Vivek Mani
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India is the world’s largest producer of milk and dairy products. Milk is usually a staple for Indians all across the country. Butter, ghee and yogurt complement almost every other meal consumed in the Indian household. Our dairy market has already crossed a valuation of $144.5 billion in 2020, and contributed to 4.2% of the nation’s income! With a CAGR of 6% every year, it is sure to grow incrementally this year as well. The Covid-19 pandemic and resultant lockdowns have disrupted the routine demand and supply all around the globe drastically, especially for cold products like ice cream, cheese and yogurt. However, most dairy businesses are now well on the road to recovery through strict monitored measures across entire supply chains.
Since dairy products are highly perishable, packaging plays a crucial role in ensuring proper circulation through the entire supply chain - right from production and factory outlets, to the homes of the consumer. It not only protects the product from contamination, but also facilitates appropriate transportation and influences the product’s overall shelf life. The global dairy packaging industry is expected to reach $83.7 billion by 2025, and the Indian packaging market currently stands at approximately $11 billion.
The connect between consumers and packaging
The shelf life of dairy products depends on some intrinsic external and internal factors, including storage conditions, refrigeration, different processing parameters, pH and nutritional content. Given the fact that packaging is one of the most essential factors that drives product distribution, there’s much to unravel in terms of how consumers interact with it. Often, it establishes the first connect between the brand and the consumer, especially for newly launched products. The increased distribution of dairy products through retail channels has also increased the demand for dairy packaging all around the world.
In today’s time and highly competitive landscape, product packaging needs to go one step beyond its basic purpose to establish a strong connection with both, the retailer and the consumer. To take an example, the colour, type, size and shape of packaging also needs to be diversified as per the product type and its consumer led usage. It is no longer enough for packaging to just provide information to customers - it also needs to be visually appealing. Bold, vibrant colours and illustrations can work wonders for the look and feel! It is likely that consumers may dissociate from the brand if the brand’s packaging tonality is not consistent across different products.
Innovations and trends in dairy packaging
Plastic, glass, metal and laminated paperboard have been used to create the base level of packaging for many varieties of cheese, butter, milk, yogurts and ice cream since a few decades now. However, in recent times, packaging technologies have continuously improved to combine highly effective processes with product protection and distribution strategies. Innovation does not only mean tech led integration, but also fostering interesting consumer interaction with the brand. One of the best examples for this is the Kinder Joy chocolate that creates a highly interactive experience for children! A Japanese yogurt brand, Meiji Bulgaria Yogurt uses a non-stick coating for their lids which ensures no yogurt is wasted on the lid. Simple yet tremendously impactful, don't you think?
Given the state of the world around us today, it is no surprise that eco-friendly packaging has gained prime prominence, with many manufacturers taking the low carbon emissions route to replace plastic. This also establishes their position in the minds of the millennial consumers, who are increasingly becoming more environmentally conscious and purpose driven. Plastic lids are being replaced by reusable lids, bioplastic bottles are becoming trendy and recycled plastic pouches are gaining popularity. Biodegradable bottles made of starch, lactic acid and sugar have also come to the forefront. The Austrian brand Naku has been taking the lead on this.
It may also be pertinent to discuss consumption patterns in terms of single packs vs group packs. Convenience product formats are an important criterion to consider. As of now, single packs dominate the dairy landscape since they are easier to carry, faster to consume and easily portable. However, group packs can offer manufacturers more room to innovate both aesthetically and informatively. Tetra Pak has launched their Tetra classic Aseptic Cube in 2019 that groups 6 packages to form a cube that saves approximately 40% packing space. Moreover, it is cost effective for manufacturers and also sustainable environmentally!
The role of technology and future trends in dairy packaging
We live in the era of Industry 4.0, and technology plays an incredible role in all our lives today - both personally and professionally. A year ago, traditional businesses could still do without too much tech intervention. But since the pandemic and its recurring impact all round, it has become critical to include intelligent technology-based solutions - no matter the size or scale of the business. Dairy packaging is no different. We have seen multiple tech innovations steal the show for both businesses, as well as consumers.
A few examples of technology led packaging includes the following:
1. Controlled and modified atmosphere packaging: To increase the shelf life of the product through microbiological and sensory indicators
2. Active packaging: Ethylene, oxygen and moisture absorbent packs to maintain the freshness and consistency of the product
3. Radio frequency indicator tags: RFID tags connect with computer software wirelessly to track and inform consumers about product quality
4. Intelligent packaging and biosensors: Communicate the deterioration of the product through colour changes or indicators on the pack, to ensure the health and safety of the consumer
5. QR code embedded packaging: To track products wirelessly and build interactive experiences for the customer
Out of all the above-mentioned trends, the QR code example is the most fascinating and interesting to use! This type of connected packaging can be produced seamlessly for the masses, and it can lead to an effective interactions with customers as well. For one, creating and embedding a QR code onto a product pack is relatively simple. Second, there is so much brands can explore with just a small QR code at the back of the pack!
Often, product information is displayed as tiny boxes of text that are difficult to read. Manufacturers can enable the QR code to prompt better readability on smartphones or tablets, so that this information is readily accessible. It also gives them room to link this to websites and social media, that are crucial touch points for the overall customer journey for the brand.
They can also be used to create immersive experiences using artificial intelligence and augmented reality, and build a digital first relationship between the brand and the consumer. Moreover, this not only enhances the customer experience but also enables brand custodians to dig into customer insights as it is a direct generator of data, right from the first scan. This can help manufacturers customise the product and packaging and facilitate better consumer communication.
Dairy packaging has come a long way in the last few years. In terms of the future trends and innovations in packaging, connected packaging is sure to take the industry by storm and disrupt it. The QR code is just the beginning of a truly awesome journey, and we’re very excited to see innovations like these transform it to a future ready industry!
(The author is CEO of Heritage Novandie Foods Private Limited)
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