Industrial Visit Report

Industrial Visit ReportAnmol Biscuits Ltd and Nidhi Packaging Pvt Ltd.

Submitted By :

Deepanshu Saxena

Roll No 91130

FMG 18 C

Industrial Visit Report

INDEX

SERIAL NO. CONTENTS PAGE NO.

1. Anmol Biscuits Ltd 3

2. SWOT Analysis 6

3. Sectors Of Biscuit Industry 8

4. The Environment 10

5. Learnings 13

6. Nidhi Packaging Pvt Ltd. 16

7. Packaging in India and Worldwide 19

8. Purposes Served By Packaging Industry 24

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Anmol Biscuits Ltd

Anmol, is a popular brand of eastern & northern region of India, from the house of Anmol

Biscuits, one of the leading biscuit manufacturer of the country having its two state of the art

units at Dankuni (West Bengal) & Noida (Delhi).

About the company

Anmol Biscuits came into being almost a decade back, when Mr. Baijnath Choudhary

initiated the setting up process of the first plant at Kolkata. Anmol, which was started as a

single plant, now has a strong hold in the highly competitive biscuit market. Under the

guidance of Mr. Baijnath Choudhary, Mr. Bishwanath Choudhary, Mr. Dilip K. Choudhary,

Mr. Gobind Ram Choudhary and Mr. Bimal Kumar Choudhary, Anmol has succeeded in

maintaining a hold in the market very efficiently.

Products - Anmol offers its customers a wide variety of biscuits in various tempting flavors

to suit all tastes. The consumers can take their pick from Glucose Biscuits, Coconut Biscuits,

Buttermilk Biscuits, Chocolate Biscuits, Tea Biscuits, etc.

The Company: “Anmol Biscuits Ltd”

Marketing

– Product portfolio- Anmol's product range includes Butter Bake, Gol Mol, Sweet and Salty

Biscuits, Yummy Pure Chocolate Cream, Yummy Milk Cream, Yummy Coconut, Regency

Square Marie, Glucose Shakti, Marie Biscuits, Coconutty Cookies as well as salty items such

as Tip-Top Kajoos Kurkure Masala, Tip Top Six Bix, Cheez Bake and Salteez Salted

biscuits.

Distribution network - The Company is having a network of super stockiest, distributor and

salesperson. Anmol has become one of the largest brands across the country having 110

Super stockiest, 2600 distributors & 250 sales people & present in about more than 4 lackhs

retail shop.

Pricing – The Company sets the price of their based on the competitor’s price.

Pomotion strategies- From time to time the company is providing some schemes or rebats to

customers or retailers. They make advertisement according to the convient of the people as

well as the features of the product It also offers its dealers all-expenses-paid trips to various

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exotic locations in Europe and south east Asia based on their performance, thus, ensuring a

well-greased distribution channel.

Customer service- 1. Launched Consumer Scheme in the period of March 06 to July 06 and also in the year Jan 09 to Jun 09. 2. Company is highly active in supporting social causes like: a) Road Safety b) School Promotion

Market share- Anmol has a market share of close to 10 per cent in eastern India and 7 per cent in the whole of India. Anmol is looking at a turnover of Rs 239 crore end of this fiscal, and works through 2000 distributors with presence across 3 lakh retail outlets in India.

The Company is having a market share of around 25-33% taking into consideration the factor like price, quality, and brand. Market share can also be evaluated on the area wise segmentation. For e.g, In Rourkela, Bus Stand area anmol is contributing only 5% of the market share as the major of the market share is divided among Mukund, Jaya etc.

Competition – The Company is facing competition form Britannia, Sunfeast, Parle-G,

Mukund, Jaya, Sujata, Biskfarm in terms of price, quality, market share and most importantly

brand. Many products can be compared with Anmol Biscuit.

The Customers – For understanding the customer first we have to know the product of the

company. It offer a wide range of biscuits such as Cream Biscuit, Sweet Biscuit, Salted

Biscuit, Cakes, Sweet and Salted Biscuit, Sugar Free Biscuit and Rusks which are

manufactured using premium quality ingredients such as maida, sugar and vanaspathi, and

are widely acknowledged across the globe for their excellent taste and variety of flavours.

Apart from offering a range of biscuits it also offers a variety of food items that are shown

below:

Cream Biscuit Fun Fill – Strawberry Cream Biscuit Fun Fill – Orange Cream Biscuit Yummy – Milk Cream Biscuit

Fun Fill – Cream Biscuit

Sweet Biscuit Thin Arrowroot Marie

Marie Time Regency

Dil Khush Dream Lite Pack Master

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Salted Biscuit Snackles Tip Top – Kaju Kurkure

Tip Top – Six Bix Lemon Mazaa

Cakes Yummy – Vanilla Cup Cake Yummy Tiffin Cake (Pineapple)

Yummy Orange Cup Cake

Sweet and Salted Biscuit Cream Cracker 2 in 1 Jadoo

Sugar Free Biscuit Super Anmol-G Anmol-G MilkONut

Gluco Shakti Coconutty

Rasks Butter Bake Milkmade

Butter Bake – Kaju Coco Bite

Butter Kokonut

The customer is more concerned on the quality as well as cost aspect therefore the company

aims at keeping the old customers as well as making new customers. The customers are

segmented on the basis of geographic, age, income, social class, and psychographic. The

consumers of Anmol biscuits mainly children but there are some products which are focused

on each section of age group of people. There are certain products as family packs which are

consumed by the family. The buying pattern of the customers regarding the Anmol products

depends on the demand of the products by the population.

The Competition –

Many products can be compared with Anmol Biscuit as they are similar. For e.g., 2 in 1 from

Anmol its counterpart 3 in 1 from Mukund. Marie is common in almost every company and

is produced under different names like Marie, Marie Time from Anmol; Marie gold form

Britannia; Marie Light from Sunfeast. So in order to make the market of one product we have

to fight with other similar product of different companies.

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COMPETITOR PRODUCT

Mukund Marie

Britannia Marie gold, Tiger biscuits, Milk Bikis

Biskfarm Marie

Sunfeast Marie Light

Parle-G Hide&Seek

SWOT ANALYSIS

Strength

Fulfill one of our Basic Requirement among Air , Water , Food, Shelter

Widely accepted in all Generations Easily available in various forms Provide good Instant Remedy for

hunger in the form of readymade food

Preserves the non seasonal food and makes it available all throughout the year

Weakness

Decreases nutritional value Increases the cost of food product Industry and technology requires

high investment Regular usage of processed food

can cause alteration in health

Opportunities

Increase economy of India

Generate employment opportunity

Good quality of Goods Provide competition to foreign

companies Improve living standard Provide goods to nation at cheaper

rate Inflow of foreign reserve and funds

for the govt.(taxes)

Threats

Many companies are result oriented Increase in pollution Sometimes provide poor quality of

product for more profit Lack of technology Unable to utilize all the resources

efficiently

OVER VIEW OF THE INDIAN BUSCUIT INDUSTRY

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Biscuit industry contribute Rs 8,000 crore to the FMCG industry and provide a vast

opportunity for growth, as the per capita consumption of biscuits is less than 2.1 kg in our

country. India It is classified under two sectors: organized and unorganized. Branded

/Organized to Unbranded/Un organized market share of biscuit has been 70% for Organized

sector and 30% for Unorganized sector . Apart from Big 3( Britannia , Parle , ITC ) there are

around 150 medium to small biscuit factory in India .

The Industry is now facing problem from increase of raw material price. With Government

VAT up to 12.5% has added to their woes .Biscuit consumption per capita in India has grown

to 2.1kg per capita in comparison to 10kg per capita consumption in USA ,UK and Europe .

India Biscuits Industry came into limelight and started gaining a sound status in the bakery

industry in the later part of 20th century when the urbanized society called for readymade

food products at a tenable cost. Biscuits were assumed as sick-man's diet in earlier days.

Now, it has become one of the most loved fast food products for every age group. Biscuits

are easy to carry, tasty to eat, cholesterol free and reasonable at cost. States that have the

larger intake of biscuits are Maharashtra, West Bengal, Andhra Pradesh, Karnataka, and Uttar

Pradesh. Maharashtra and West Bengal, the most industrially developed states, hold the

maximum amount of consumption of biscuits.

Even, the rural sector consumes around 55 percent of the biscuits in the bakery products. The

total production of bakery products have risen from 5.19 lakh tonnes in 1975 to 18.95 lakh

tones in 1990. Biscuits contributes to over 33 percent of the total production of bakery and

above 79 percent of the biscuits are manufactured by the small scale sector of bakery industry

comprising both factory and non-factory units.

The production capacity of wafer biscuits is 60 MT and the cost is Rs.56,78,400 with a

motive power of 25 K.W. Indian biscuit industry has occupied around 55-60 percent of the

entire bakery production. Few years back, large scale bakery manufacturers like cadbury,

nestle, and brooke bond tried to trade in the biscuit industry but couldn't hit the market

because of the local companies that produced only biscuits.

The Federation of Biscuit Manufacturers of India (FBMI) has confirmed a bright future of

India Biscuits Industry. According to FBMI, a steady growth of 15 percent per annum in the

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next 10 years will be achieved by the biscuit industry of India. Besides, the export of biscuits

will also surpass the target and hit the global market successfully.

Two Sectors of Biscuit Industry

In terms of volume biscuit production by the organized segment is estimated at 1.30

million tones. In the organized sector, the industry is dominated by Britannia and Parle,

which account for 70 per cent of the industry's volumes. The two major organized players are

Britannia and Parle. Britannia’s market share stands at Rs 27 billion. Parle derives a large

portion of its revenues from low-priced biscuits. Parle-G and Britannia derive a fairly large

share of their revenues from the medium- and premium varieties. In fact, Britannia's market

share in the medium and premium varieties is significantly higher.

Other organized players include domestic players like Brakeman’s, Champion, Kwality,

Priya and MNC’s like SmithKline Consumer, Kelloggs, Sara, Heinz, Excelsia (Nestle) and

United Biscuits.

The unorganized sector consists of small bakery units, cottage and household type

manufacturing their goods without much packaging and distributing their goods in the

surrounding areas. Lower overheads due to limited local area, family management, focused

product lines and less expenditure on marketing help the unorganized sector to grow.

The organized biscuit manufacturing industry‘s annual production were around 1.1 million

tons in 2003-04, 1.25 million tons in 2004-05, 1.4 million tons in 2005-06, 1.6 million tons in

2006-07 and 1.7 tons in 2007-08.

30%

70%

TWO SECTORS OF THE BISCUIT INDUSTRY

unorganizedsector organized sector

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LIST OF THE PLAYERS IN THE INDUSTRY

The major Brands of biscuits are - Brittania, Parle Bakeman, Priya

Gold,Elite,Cremica, Dukes, Anupam, Horlicks, Craze, Nezone, besides various regional/State

brands.

Britannia ,

Parle ,

ITC foods ,

Surya Foods

others

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ENVIRONMENT

The Environment- It includes the micro as well macro environment. Micro environment

includes:-

Suppliers

Marketing Intermediaries

Customers

Macro environment includes:-

Demographic environment – It includes Consumer groups like children (school going – teens), Young adult (19-30 years), Adults (35-50 years), Senior citizens.

Economic environment- It includes general economy; business cycle which has four

phases like growth/prosperity, recession, depression, recovery; buying power which

includes the financial sources like income, wealth; willingness to spend. If there is a

big economic downturn in the market then the customers will switch to cheaper

options and will not buy expensive biscuits.

Political- Running health campaign to discourage people from eating too many fatty

foods. Governments are concerned of the obesity level in the population.

Socio-Cultural environment. - It includes factors like health consciousness, career

choices etc.

Technology – It includes the R&D activity, rate of technological change, technology

adopted by the competitor etc.

Legal- It includes the acts like Prevention of Food and Adulteration (1954); Standard

Weights and Measurement Act (1956); MRTP (1969) etc.

Factors like Consumer protection, State regulatory agencies, and Non-government regulatory

agencies also influence the company.

STRATEGY ADOPTED

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Strategies are essential for achieving a given target/tasks. The major strategies used by me are

as follows:

Pull-Push- Pull strategy is basically directed towards customers. Either there is a

movement from the customer side or from our side. As a result demand for the

product affects in the form of increase in sales. Where as push strategy is directed

toward making new distributors. As a result market coverage increases.

Price discount- Here products are offered to the customers at a discount on the

normal selling price. Distributors in Rourkela market gives 3% discount on the

normal selling price of the product.

Replacement- Here damaged pieces are replaced by us (if any).

Installment offers- Here products are offered at down payment and customers are

allowed to pay the remaining amount on an installment basis.

Consumer contest- Time- to- time customers are made aware about utilizing the

retailer scheme option.

Free gifts/samples- Here customers are provided with free gifts like pocket diary, key

ring etc in order to motivate them to place order.

Other strategies that are used were as follows:

Market Research- It was done in the form of surveys, observation of the

competitor’s strategies etc.

Concept and Idea generation- It was done by giving new ideas to both the

customers as well as to the distributors.

Motivational factor- It was used by spending, favoring their opinion, etc.

Communication- It was used through activities like follow up, advertising, public

relation personal selling, feedback etc.

Situation Specific- It was done by handling objections, accepting challenges,

adapt/overcome.

PROBLEMS / CONSTRAINTS / LIMITATIONS

Many barriers were faced in my 3 month of IP. Some of them are as follows:

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Low market coverage area by distributors- As the condition is worst the

distributors are covering fewer shops which ultimately affect the demand of the

product and also the sales.

Lack of time management-This happens in the way of the dispatch of the vehicle

from the warehouse.

“No “means “no”- Once a shop owners tell they won`t keep the product it find

difficult to convince them.

Obstacles in terms of Schemes, discounts, offers- During my IP I came to know

that fewer shop owners are unaware of the latest scheme which the company has

launched.

Seasonal demand problem-As I was doing my work in summer I also came to know

that biscuit industry is also affected by seasonal demand. During summer the demand

is low as compared to winter.

Change in taste and preference pattern- As there is a change in taste and preference

in the customers so their opinion also shifts to another company form time to time as a

result sales decreases for certain products.

Lack of responsibility- I also notice that nobody take responsibility. For e.g, if a

shop is not visited for 2 weeks then they continue to do the same activity as a result I

have to face complains form the shop owners and also almost we have lost one of our

existing customers.

Language barrier- In the form of oriya.

Similar type plus new products of other companies- Most of the company

produces similar product so there are similar products under different brand names.

For e.g, Anmol`s coconutty is facing competition from Mukund`s coco bite.

Lack of media approach- This happens in the form of Advertisement, banners etc.

No credit system from distributors - As the distributor don`t extend the credit

period so some shop owners take this personally.

Strange trend of the customers- I also noticed that as this is the last month of the

retailer`s scheme then also some shop owners are not placing heavy orders and at the

end they go for flattery in the form of asking for some help form the company

representative.

LEARNINGS :

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Achieving target is difficult but not impossible. Generally doing direct marketing is a difficult task but this is the only field where one person can learn so many things like customer behavior, attitude, responses, understanding his needs and want.

Working with different situation it’s enhancing our skills, knowledge, and physical with mental ability to work with stressful situation and challenging environment. Target makes us more carrier focused, responsible and to work with work pressure. It is a result oriented function so it create a awareness to finish that target within the assigned time, it has a great impact on the students to became a professional

To fulfill the target task is the most important component, implemented, and administrated benefit programs leads to achieving target. Do the task properly is improving our managerial skills, interpersonal skill. The main aim of target and task is to know how in future we will manage our subordinate.

Overall it’s preparing us to achieve our future goals it is providing us a platform to stand, to sell our knowledge, and to compete with the coming market.

RECOMMANDATIONS OF STUDY

Product: - Company should regularly confirmed that their product satisfied the customer

needs

Place: place should be perfect

Price: price should be reasonable

Promotion: Use the suitable mood of promotion

Packaging: It should be attractive.

IMPROVE THE QUALITY OF PRODUCT: -

Company should improve the quality of their product because customer wants best quality at

reasonable price.

Many retailer complaints us that the Taste of the glucose of Anmol is just like floor.

INCREASE THE PRODUCTS SIZE: - Company should increase the product size because

company has only the highest product whose cost is only Rs 15. Company has not the family

pack just like Parle-G which have the family pack whose cast in Rs. 40/pack

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So company should produced family pack.

PRODUCED HIGH PRICE RANGE BISCUITS: -

Company should produce high price range product.

During my Training period I find it that in Jhansi many standard bakery like Nav Bharat,

Star Bakery Demanded dry fruits types biscuits whose cost in high & which represent the

standard of richest society just like hide & seek biscuit.

Provide Offers: - providing offers is the best way to promote their product so company

should provide offers to customers.

Example ii) Buy 4 gets one free

iii) Take 15 Rs batter bake 4 get 2 Rs. Pack free

Because the time first priority of any company is to computer the market by this way or that

way so this is the best way

Company should produce the festival purpose product which may be use as the gifts

just like Britannia & other biscuit companies produced.

INCREASE SUPPLY :- Company should increase the supply of product because due to

short supply costumer may be loyal for other company product because many Distributors

complaints that when he demanded 1440 boxes then he gets only 1000 boxes during the

winter season when the sales of biscuits reaches their peak points.

MANTAIN THE RELATIONSHIP WITH RETAILER & DISTRIBUTORS: - Retailers

& Distributors play a very important & vital Role in the success of any company product so it

is very necessary to maintain the good relationship with the retailers & Distributors.

It may be possible through give some gifts to retailers & Distributors occasionally.

CONCLUSION :

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In Indian BISCUIT Industry even the small companies are able to make profits.

Indian biscuit Industry has a continuous growth and will not be hindered due to

external factors. Biscuit Industry has flourished in India enormously over the years

and is still growing phenomenally

Entrepreneurs or businessmen who are in process of buying , installation of new

biscuit line should keep following points in mind ,apart from legal requirement of

industrial licenses , pollution clearance's and of course finances.

Brief On The Unit Visited :

Nidhi Packaging Solutions Pvt Ltd.

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We are proud to introduce our fully automated corrugated box manufacturing set up in

Greater Noida in a sprawling 17122sq.mts premises. Conveniently situated on the FNG

(Faridabad - Noida - Ghaziabad) corridor, our manufacturing plant is not only fully

automated, but boasts of several salient features that provide strategic compatibility with

many businesses. While it is impossible to showcase our professional expertise and

workmanship on paper, below is a list of some of the more tangible features.

Our fully automated plant is designed for high speed manufacturing.

Most of the technical equipment is imported and delivers on quality output.

The plant can deliver approx 150 mtrs per minute, size upto 180cm and has a

2000tons pm paper processing capacity.

In-house facilities like fully equipped lab, printing, die cutting, stitching, etc.

The company is dedicated to providing full range packaging options that suit client

needs in every possible way, including design, color, shape and size .

Apart from our capacity and capability, our association with the ‘Nidhi’ brand solidifies the

professional trust that our clients put in us. We are in fact, a part of the Rs 100 crore

NIDHI AUTO empire in Noida, that requires no other introduction than being the OEM to

companies like Yamaha, Fiat, New Holland Agriculture, LG, Samsung, Kohler and Carrier

amongst others.

Packaging Industry in India

The current wave of economic development in India is being seen from all over the world. As

infrastructure, manufacturing, agriculture, and services grow at high rates the packaging

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industry is also showing great variety and depth in its growth. India’s packaging industry may

achieve an annual turnover as high as US$ 5 billion in the current financial year with a

growth rate nearly 25 per cent in significant segments. Leading companies in the Indian

packaging industry show a compound annual growth rate of 30 per cent, and the Indian

Rupee is strengthening against the US dollar at annual rate of 4 to 5 per cent. Even then, the

US$ 5 billion figure would represent about one per cent of the current global packaging

industry.

In 2001, the packaging industry worldwide generated an annual estimated turnover of US$

417 billion. The major regions that made up this total include Europe, US$ 129 billion; North

America, $116 billion; and Japan, US$ 81 billion. India’s consumer packaging accounted for

just US$ 2.3 billion in that year, that is about half of one per cent of the global packaging

volume.

Packaging in India in 2001

Today, packaging is produced more quickly and efficiently. It is generally lighter in weight,

uses less material, is easier to open, dispense from, reseal, store, and dispose. Packaging has

evolved from a relatively small range of heavy, rigid containers made of wood, glass, and

steel, to a broad array of rigid, semi rigid and flexible packaging options increasingly made

from specialized lightweight materials.

Flexible Packaging

Flexible packaging consists of multi-layer laminated sheets of plastics (PVC, LDPE, HDPE,

BOPP, BOPET), paper, cloth, or metal foils that are used separately or in combination for

various packaging applications. However, this article discusses flexible packaging as

laminates of plastics that have a unique set of properties that ensure toughness, moisture

resistance, aroma retention, gloss, grease resistance, heat sealability, printability, low odour

and taste. These find use in packaging food, tea, coffee, spices, chewing tobacco, bakery,

confectionary, oils, and in certain other non-food applications such as household detergents,

health and personal care, soaps, and shampoos.

Causes of Flexible Packaging

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Protection:Flexible Packaging gives total consumer protection by keeping the

product clean and protecting it from pilferage and adulteration

Barrier:It provides good barrier properties against moisture and gases and protects

food from damage and wastage

Convenience:It provides convenience of handling and disposal after use

Cost Saving in Material:Flexible Packaging is light — a one kilogram oil pack

weighs less than 10 grams compared to at least a 40 gram HDPE jar or 32-35 gram of

PET, thereby giving tremendous saving in raw material cost.

Cost Saving in Storage and Transport:It fits closely to the shape of the contents and

saves cost of storage and transport.

Savings in Raw Material Consumption:Tremendous saving in raw material

consumption, serving the national cause by extension of usage at least times four

times.

More Per Pack:It provides much more product per a given amount of package. Good

examples include coffee, nuts and snacks that come in foil brick packs and pouches

rather than in cans or jars; juice sold in pouches rather than in rigid containers, and

household cleaner refills that come in thin pouches rather than in glass bottles.

Smaller Units Possible:Thus the option to buy only the required quantity at a time.

Conservation of Energy:Considerable conservation of energy for conversion. For a

steel coffee can to be efficient as a foil brick pack, the can would have to be recycled

at a rate of 85 per cent. However, steel cans are currently being recycled at a rate of

about 45 per cent.

Important in Lifestyles:Convenience foods, individually packed small servings,

microwaveable meals, “easy opening” packaging, secure packaging for

pharmaceuticals and hazardous substances, are all examples of packaging playing a

role in assisting and promoting our lifestyles.

Builds Brands:Helps product manufactures enhance brand images, increase sales and

realize new market opportunities

Flexible Packaging Demand in India and Worldwide

World demand for converted flexible packaging will grow at more than 4 per cent per year

through 2005 to nearly 14 million metric tons, with a value exceeding US$ 50 billion. The

best gains are expected in the world’s emerging markets, including Eastern Asia, Eastern

Europe, Africa, and Middle East. India holds largely untapped markets with a potential of

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double digit market growth. The flexible packaging industry in India is currently estimated to

be US$ 1 billion and records a high growth rate of approximately 20 per cent.

The expansion of the Indian flex-pack market has accelerated due to :

A growing middle class of over 300 million.

The conversion of the more traditional rigid packaging into flexible forms.

A favourable government tax structure. Excise duty that was once 24% has been

reduced to 16%.

Liberalization of the Indian economy since 1991.

Globalization and the influx of multinational companies.

Modern plants and equipment available to the flexible packaging industry.

Considering these factors it is only obvious that flexible packaging has a very bright future in

India and is here to stay and grow in a big way.

The major Indian players in flexible packaging

The Indian packaging industry is a combination of organized large Indian and International

companies and the unorganised small and medium local companies. The organized sector of

the industry may be less than 5 per cent of the companies in the overall industry but it

nevertheless controls over 70 per cent of the market by volume. The organized sector

operates in the laminated product segment such as form-fill-seal pouches, Tetrapacks, and

lamitubes.

Converted Flexible Packaging Demand

Item 1990 1995 2000 2005 2010

Converted FlexiblePackaging Demand

63 153 295 595 1125

By Material Polyethylene

19 54 100 190 340

Polypropylene 5 20 60 160 360

Other Plastics 19 35 60 105 175

By Market Nonfood

16 39 74 146 270

Paper and Foil 20 44 75 140 250

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Food 47 114 221 449 855

There are around 13,000 converters in India — a majority in the small and medium sector

located in all parts of the country. It is estimated that there are more than 200 flex-pack

(flexible packaging) converters in India – 50 units in the organized sector constituting 40 per

cent of the Indian flexible packaging industry and about 150 in the unorganized sector that

make up the remaining 60%. Most small operations have processing capacities of less than

250 tons a month and produce overwraps, coextrusion films, and polysacs.At least ten flex-

pack converters process more than 4,000 T/annum and are on par with leading international

operations. These larger Indian flexible packaging companies include

Flex Industries Limited

Paper Products Limited (Huhtamaki Group)

Positive Packaging

Multiflex

Paharpur Industries Limited

Demand in India

The current demand for flexible packaging in India, stands at about 500,000 tons.

Consumption of Flexible Packaging — India in Comparison to the Rest of the World

According to industry experts, annual flexible packaging consumption per capita in various parts of the world is roughly as follows:

N. America : US$45 Japan : US$31 W.Europe : US$25 S.Korea : US$15 Thailand : US$3 China : US$2 India : US$1

It is also observed that a mere 20 per cent of the population in India consumes 80 per cent of

the packaged production whereas the remaining 80 per cent of the population have an access

to only 20 per cent of the packaged production. There exists an exceptional gap in India

between the necessary and actual demand for packaging of essential commodities and this is

one of the major reasons why the growth of flexible packaging is not an alternative here but

is rather an imperative.

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Major Segments

The consumer market dominates the global packaging industry and accounts for an estimated

70 per cent of sales, with industrial applications taking the remaining 30 per cent of the share.

The food industry is the single largest end-user market, valued at around US$ 145 billion,

followed by the beverage industry at approximately US $75 billion.

A high degree of potential exists for almost all user segments in India which are expanding

appreciably:

Processed Foods

Mouth Fresheners (pan masala)

Beverages

Confectionary

Bakery Products

Spices

Edible Oils

Soaps and Detergents

Drugs and Pharmaceuticals

Cosmetics and Personal Care

Chemicals and Fertilizers

Office Stationary

Engineering Products

Tattoos

According to Freedonia, food and agricultural markets dominate the sales of converted

flexible packaging in India and will continue to expand on account of several factors —

rising consumption of packaged foodstuff; the increasing presence of multinational food and

beverage firms in India; the trend towards additional processing of food grains and fresh

produce; ongoing efforts to improve sanitation and food safety.

Key markets include rice, other grains, food crops, various processed foods, and chewing

tobacco. Personal care products such as cosmetics and toiletries are also important with fast

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growing Indian markets. Growth is seen in the pharmaceutical sector also due to expanding

penetration of a large drug-producing industry.

The Indian processed food industry stands at about US$ 30 billion and accounts for about 13

per cent of the country’s exports and involves 6 per cent of the total industrial investment in

the country. Of this packaged food stands close to only about US$ 0.85 billion. Thus there is

a tremendous potential for growth of flexible packaging in the food and processed food

sectors.

In 1999-2000, the total production of rice in India was 90 million tons. If even 5 per cent of

the rice produced were to be packaged it would alone generate a demand for 75000 tons of

flexible packaging material.

The total wheat production in India was 75 million tons. Even if 7 per cent of it were to be

packaged it would create a demand for 90000 tons of flexible packaging material. The total

sugar produced in India was 24.84 million tons. If 5 per cent of this was to be packaged it

would alone generate a demand for 50000 tons of laminates. The total salt produced in India

was 5 million tons. Packing 25 per cent of this quantity would generate a demand of 150,000

tons of flexible packaging. This clearly shows the tremendous potential for the growth of

flexible packaging in India.

Flexible packaging materials in India

Going by the available data, an estimated 250,000 tons of flexible packaging materials for

retail sales in the form of laminates and co-extruded films were consumed in India last year to

pack a very large spectrum of products covering processed and convenience foods, fruit juice,

beverages, dry and malted products, spices, tea, coffee, edible oils, toiletries, cosmetics,

motor oils, and other products. Almost all the raw materials required in flexible packaging

such as BOPP, PET, PE granules, aluminium foil, adhesives, and printing inks are made in

India. These inputs are of international quality and are exported worldwide.

Packaging Equipment Manufactured in India

India makes most of the equipment needed by the converting industry, including rotogravure

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printing presses, laminators, slitters, and pouching machines. A full range of semi-automatic

to fully automated filling, sealing and wrapping machines is manufactured in India. These

machines are of high quality and are very competitive in price and are exported in a big way

to developed countries as well. There are some 600 to 700 packaging machine manufacturers,

95% of which are in small and medium sector and located all over the country.

The Indian market for food packaging equipment amounts to about US$ 80 million.

Currently, a mere 2 per cent of India’s food production is being processed, and there are plans

in place to increase the food processing level to 10 per cent over a period of ten years thereby

increasing the demand for packaging equipment manifold. Another sector with a large

demand for packaging machinery is the Indian cosmetic packaging segment that is expected

to grow at a rate of over 20 per cent in the next few years.

The flexible packaging industry has a very crucial role to play in the lives of the ordinary

people of India and thus has a great future here. Every broad industry or agricultural sector

that consumes flexible packaging has its own unique and dynamic set of requirements. The

huge possibilities latent in each of these sectors have to be defined and cultivated. India is

indeed a dynamic, developing and demanding market and most of its potential has not yet

been identified, leave apart conquered or covered. As new aspects of this market and its

consumers’ behaviours are defined and chalked out everyday, the need for new solutions

unique to the Indian market emerge.

Quality processes such as Six Sigma, waste minimization, the optimisation of supply chain

efficiency through, for example, eCommerce initiatives, can contribute much to improved

performance. So can “added value” products and services and an imaginative approach to

meeting customers’ needs. In a world where commoditization is a fact, it’s evident that

companies that develop unique products and services that are “genuinely out of the box”

solutions to end users’ problems will gain a significant competitive edge. Goethe rightly said,

“Knowing is not enough, we must apply. Willing is not enough, we must do.”

Packaging industry serves the following purposes in India:

1. Containment: Most products must be contained before they can be moved from one place

to another. To function successfully, the package must contain the product. This containment

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function of packaging makes a huge contribution to protecting the environment. Faulty

packaging (or under packaging) can lead to spillages and result in major losses and serious

damage.

2. Protection and Preservation: Packaging plays a vital role in protecting products as they

go from the manufacturer to the consumer. Packaging is designed to ensure that the product

reaches the consumer in good condition. The product is protected during transport and

distribution; from climatic effects (heat and cold, moisture, vapour, drying atmospheres);

from hazardous substances and contaminants; from infestation.

3. Supplementary Product Protection: Packaging can also provide supplementary product

protection. This may be achieved by forms of cushioning such as shredded papers, sheets of

corrugated paperboard, foamed plastic or wrappings. Packaging therefore contributes to food

safety, quality and nutrition. Packaging technology has made major contributions to

advancing food science and food safety and reduction of food spoilage.

4. Communication: ‘A package must protect what it sells and sell what it protects’. Modern

methods of consumer marketing would fail were it not for the messages communicated on the

package. The information provided on packaging allows the consumer to make informed

decisions on the product’s purchase and use.

5. Convenience: Packaging plays an important role in allowing products to respond to the

demands and needs of modern consumers. Frozen food packs, microwavable containers, wine

cardboard casks, easy-open beverage and food cans and aseptic cartons are good examples of

convenience packaging. These types of packaging reflect the demand for convenience and

quick food preparation in a way that guarantees freshness.

Lightweight medical devices are packaged in peel-open, pre-sterilised containers designed for

easy use in operating rooms, patients' rooms, or laboratories. In the administration of drugs,

unit-dose packaging, solid and liquid, in small containers allows sealed, unused drugs to be

returned to stock. Medical packaging also reduces the risk of accidental overdose or improper

use by children (child resistant closures). 6. Environmental Aspects: Packaging reduces the

amount of waste going to landfill. Without the benefit of packaging to preserve food, a higher

proportion of food would become spoiled and consequently consigned to garbage collection

for land disposal. When the food is packaged, the unwanted portions such as skins, outer

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leaves and trimmings, remain at the processing point where they can be economically

recovered and used in the manufacture of valuable by-products.

7. Reduction of Pilferage: Packaging of a wide variety of products sold from self-service

counters is designed to reduce stealing. The product may be sold in a blister package sealed

to a large paperboard backing. The large card makes the package more difficult to conceal

and steal. Other examples of security packages are lock-on caps and tamperproof closures.

8. Marketing Trends: Marketing trends are placing increasing emphasis on the look, sales

appeal and quality of retail packaging. Packaging helps sell products by providing product

differentiation and presentation, greater brand awareness and convenience. The continuously

hanging demands of consumers will require higher quality graphics and promotional links

between graphics and advertising to support brand identities, plus the ability to reflect current

consumer trends and images.

Factors Affecting Growth of Packaging Industry in India

1. Urbanization

Modern technology is now an integral part of nation's society today with high-end package

usage increasing rapidly. As consumerism is rising, rural India is also slowly changing into

more of an urban society. The liberalization of the Indian economy, coupled with

globalisation and the influx of the multi-nationals, has improved the quality of all types of

primary and secondary packaging. Also industrialization and expected emergence of the

organized retail industry is fuelling the growth of packaging industry.

2. Increasing Health Consciousness

As people are becoming more health conscious, there is a growing trend towards wellpacked,

branded products rather than the loose and unpackaged formats. Today even a common man

is conscious about the food intake he consumes in day-to-day life.

3. Low Purchasing Power resulting in Purchase of Small Packets

India being a growing country, purchasing power capacity of Indian consumers is lower; the

consumer goods come in small, affordable packages. Apart from the normal products packed

in flexible packaging, the use of flexible in India includes some novel applications not

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usually seen in the developed world. Products like toothpaste, toothpowder, and fairness

creams in laminated pouches are highly innovative and are not used elsewhere. Another

typical example of such applications is tobacco and betel nut-based intoxicants and mouth

fresheners catering to unique Indian taste.

4. Indian Economy Experiencing Good Growth Prospects

The Indian economy is growing at a promising rate, with growth of outputs in agriculture,

industry and tertiary sectors. Overall economic growth has proved to be beneficial for the

consumer goods market, with more and more products becoming affordable to a larger

section of the population.

5. Changing Food Habits amongst Indians

Changing lifestyles and lesser time to spend in kitchens are resulting in more incidence of

eating away from homes resulting in explosive growth of restaurants and fast food outlets all

over the country. Indians are trying out newer cuisines and also purchasing similar food items

for their homes. Therefore, the review period has seen new products like pasta, soups, and

noodles being launched in India, fuelling the growth of packaging industry in India.

6. Personal health consciousness amongst Indians:

With growing awareness towards contagious diseases like AIDS and other STDs, awareness

towards usage of contraceptives and disposables syringes have increased the demand for

packaging required for the same.

7. Rural Marketing Pushing Demand for Sachets

India comprises of a big rural market and there has been growing focus on rural marketing,

whereby manufacturers are introducing low-priced goods in smaller pack sizes. Low priced

sachets have proved to be extremely popular in smaller towns and villages, where people do

not prefer to buy larger packs due to financial constraints.

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