WORLD PACKAGING CONGRESS ORGANISED BY INSTITUTE OF PACKAGING AND GRAPHIC ARTS,CROATIA Split, Croatia 6 Th June,2012 ECONOMICAL, SOCIAL AND ECOLOGICAL ASPECT.

WORLD PACKAGING CONGRESSORGANISED BY

INSTITUTE OF PACKAGING AND GRAPHIC ARTS,CROATIA

Split, Croatia 6Th June,2012

“ECONOMICAL, SOCIAL AND ECOLOGICAL ASPECT OF PACKAGING AND INDIAN

MARKET POTENTIAL”

Prof. NARAYAN C.SAHADIRECTOR

INDIAN INSTITUTE OF PACKAGING

STUCTURE

• Brief about the Institute.• India- profile, social and economical* India-ecological aspects.• Indian Consumer behaviour.• India- changing trends & its impact on

packaging.• Packaging Scenario in India.* Role of Packaging & Challenges.

“India was the motherland of our race and Sanskrit the mother of Europe’s

languages. India was the mother of our philosophy,

of much of our mathematics, of the ideals embodied in Christianity…

of self-government and democracy.In many ways,

Mother India is the mother of us all.”

- Will Durant

INDIAN INSTITUTE OF INDIAN INSTITUTE OF PACKAGINGPACKAGING

BACKGROUNDBACKGROUND

• AN AUTONOMOUS BODY IN THE FIELD OF AN AUTONOMOUS BODY IN THE FIELD OF PACKAGING UNDER ADMINISTRATIVE PACKAGING UNDER ADMINISTRATIVE CONTROL OF MINISTRY OF COMMERCE & CONTROL OF MINISTRY OF COMMERCE & INDUSTRY, GOVT. OF INDIA.INDUSTRY, GOVT. OF INDIA.

ACTIVITIESACTIVITIES• TRAINING & EDUCATION TRAINING & EDUCATION • TESTING & CERTIFICATION OF PACKAGING TESTING & CERTIFICATION OF PACKAGING

MATERIALS & PACKAGES.MATERIALS & PACKAGES.

• TECHNICAL CONSULTANCY THROUGH TECHNICAL CONSULTANCY THROUGH ADVISORY STUDY VISITS.ADVISORY STUDY VISITS.

• PACAKGE DESIGN & DEVELOPMENT.PACAKGE DESIGN & DEVELOPMENT.

• NATIONAL & INTERNATIONAL EXHIBITIONS.NATIONAL & INTERNATIONAL EXHIBITIONS.

• NATIONAL PACKAGING AWARDS- “NATIONAL PACKAGING AWARDS- “INDIASTAR”INDIASTAR”

EXHIBITIONSEXHIBITIONS

• ANNUAL NATIONAL PACKAGING ANNUAL NATIONAL PACKAGING EXHIBITION “EXHIBITION “INDPACKINDPACK””

• BI-ANNUAL INTERNATIONAL PACKAGING BI-ANNUAL INTERNATIONAL PACKAGING EXHIBITION ‘EXHIBITION ‘INDIAPACKINDIAPACK””

• PARTICIPATION IN INTERNATIONAL PARTICIPATION IN INTERNATIONAL PACKAGING EXHIBITIONS LIKEPACKAGING EXHIBITIONS LIKE– INTERPACKINTERPACK– EMBELLAGE EMBELLAGE – PAPRO ETC.PAPRO ETC.

INDIAPACK -2010 GLIMPSES

NATIONAL PACKAGING AWARDSNATIONAL PACKAGING AWARDS

• EXCELLENCE IN PACKAGE DEISGNEXCELLENCE IN PACKAGE DEISGN

I.EI.E.. INDIASTAR AWARDINDIASTAR AWARD

(BIANNUAL)(BIANNUAL)

• EXCELLENCE IN PACKAGING EXCELLENCE IN PACKAGING MACHINERY DESIGNMACHINERY DESIGN

I.E. I.E. PACMACHINE AWARDPACMACHINE AWARD

(BIANNUAL)(BIANNUAL)

INDIA – THE PROFILE

Length – 3300 kmsLength – 3300 kms

Breadth – 3000 kmsBreadth – 3000 kms

Area – 3.3 mio Sq kms Area – 3.3 mio Sq kms

Coastline-7600 kms Coastline-7600 kms LogisticsChallenge !

LogisticsChallenge !

•Climate

•3 distinct seasons

•Summer - from March to June

•Rainy - from June to October

•Winter - from November to Mar

•Extreme Seasonal Variations•Mean Summer Temp : 32-36C

•Mean Winter Temp : 10 – 25C

•Natural Hazards

•Cyclones

•Flash Floods in Monsoons

•Severe thunderstorms

• Earthquakes / Droughts

INDIA – SOCIAL ASPECT

• Second most populous country (After China) – 1 Bio +(20%)• Approx. 1200 mn people equivalent to 3 USAs or 55 Australias

• Rural 74% / Urban 26%

• Literacy - 64.8 %

• Work Participation Rate – 39.1%

• Sex ratio is 933 females for every 1000 males

• India's median age is 24-66 yrs

• Religion: Hindus 80%, Muslims13%,Christians 2%, 5% others.

• 23 Official Languages

• Languages - 18 Scheduled languages, thousands of dialects

• Diverse food habits, evolved palate.

INDIA – ECONOMIC STATUS Mixed economy combining features of both capitalist market economies and socialist command economies. 10th largest in the world in terms of currency conversion 4th largest economy in terms of purchasing power parity Fastest annual growth rates of 6.9% India's per-capita income by purchasing power parity is

US$ 3,262, Ranked 125th by the World Bank

Rapid growth of the IT industry. Largest Player in Software & BPO services ( USD – 17.2 Bio) Emerging middle class. Booming in retail market.

ECOLOGICAL ASPECTS - A STATUS

• In India, the average amount of water used per person every year is 600 m3, A volume that is slightly more than one-third of that used by americans.

• India's Per Capita Carbon Dioxide Emissions (Per $1 GDP) Is Only 25% of that produced by china.

• India's annual generation of Municipal Solid Waste to be approximately 65 million tonnes in 2010, with 90% of it sent to landfills every year.

• India comes under the top 10 most polluted sites in the world, most likely as a result of the coal and lead-producing industries.

• There is a great concern about green movement in India.

• Organic agriculture is growing fast in India.

• Use of natural colours are increasing in textile sectors.

• Fast increase of application of natural materials like bamboo, jute and coir fibres as packaging materials.

• Ministry of Forest and Environment, Govt of India has taken stringent measures.

- Banning of use plastic based sachet for Chewing tobacco. - Restriction of use for plastic carry bags. - 3 R concept is encouged.

• Urban populations are highly concerned about energy savings.

MEASURES TOWARDS ………….. GREENER ENVIRONMENT

INDIA - CHANGING PATTERN Rise in consumerism, as rural India changes into urban

society.

The urban/middle income groups represent an enormous potential for innovative and value added goods.

The urban lower income group is a source of business for daily consumption items – an opportunity area for “value for money” brands.

20% of rural household control 2/3 of all assets in rural India – similar consumption like urban counterparts.

The rural India is the “CHALLENGE OF DISTRIBUTION – THE MARKET FOR FUTURE”

INDIA – THE CURRENT TREND• Change in consumer attitude.

• The decision making segment of 15-44 year growing.

• Growth of literacy means a changing consumer profile and emphasis.

• A large middle class with relatively bigger spending power.

• Growth in number of working women.

• Tomorrow’s consumer – is the key factors for the future demand on packaging.

INDIA – THE OPPORTUNITY (2025) Dramatic growth of Indian middle class population from 50

millions to 583 millions i.e. Ten Fold increase of middle class

population is reported in 2025.

Three Fold jump in household income.

Average spending power of consumer will be quadruple. Source: Mckensy report

( “Times of India”- Indian National Newspaper

published on 5th Non.2007)

PROFILE - INDIAN CONSUMER

• Changing demographics - Younger earning population.

- Brand conscious.

- 54% below 25 years.

- More acceptance of new concepts.

- Changing aspirations.

• Change in Life style - Global Lifestyle : media exposure and overseas travel.

- Look at me (LAM) the most important criteria.

PROFILE - INDIAN CONSUMER• More nuclear families with dual income

- 75 million households called “Consuming

Classes” with annual income between USD 2000

to 20,000.

- One Million households in creamy layer with

income and easier financing options.

- Convenience overriding price consideration.

IMPACT OF TRENDS ON

PACKAGING• Increase of literacy

- Increase of Human health consciousness and

safety. - Move towards packaged, branded products.

• Demands on convenience - Lighter and easy to handle package.

• Lack of time - Working women have less time for kitchen.

- Demand for ready to eat foods in packaged form.

IMPACT OF TRENDS ON PACKAGING

• Change in food habits - More incidence of eating away from home.

- Emergence of more Italian, Chinese

Restaurants.

- Increase in purchasing of packed foods.

• Booming of retail market - Entry of leading Indian and Global retail brands.

- Availability of goods in consumer package.

PACKAGING – ADDING THE 5TH DIMENSION

The Power Of 4

1. Product2. Price3. Positioning4. Promotion

4 “P”S OF MARKETING MIX

Packaging - 5th element

You don’t spend on packaging, You invest in it !

SCENARIO - INDIA PACKAGING

An Industry which is Pervasive.

Globally considered among top 10 Industrial sectors.

Providing a strategic tool for value addition & business development towards the future.

INDIAN PACKAGING INDUSTRY- A HIGHLIGHTS

• THE TOTAL SIZE OF INDIAN PACKAGING INDUSTRY IS ABOUT USD 18.2 BILLION.

• ANNUAL GROWTH RATE IS 15%.

• ABOUT 22,000 PACKAGING INDUSTRIES.

• 80 PERCENT INDUSTRIES COMES UNDER ARE SMALL SCALE SECTOR.

• FLEXIBLE PACKAGING ARE GROWING @ 20-25 PERCENT ANNUALLY.

• CONSUMPTION OF PET BOTTLES FOR BEVERAGES ARE INCREASING.

INDIA IN THE GLOBAL PACKAGING MARKET

Ref-PIRA/WPO Report

INDIAN PACKAGING INDUSTRY –Packaging Material break down

Others14%

Caps & Closures

6%

Labels3%

Glass10%

Printed Cartons17% Metal

10%

Rigid18%

Flexible22%

NO. OF PLAYERS

LARGE - 60

MEDIUM - 7,000

ORGANISED- 14,000SMALL SCALE

INDIAN PACKAGING INDUSTRY- A HIGHLIGHTS

• TOTAL MARKET OF FLEXIBLE PACKAGING - USD 571 MILLION.

• THIS INCLUDES SPECILITY LAMINATES,FILMS, LAMINATES AND PLASTIC WOVEN SACKS.

• GROWTH RATE OF PLASTIC RIGID CONTAINERS ( INJECTION AND BLOW MOULDED) ARE GROWING @ 15%

• GROWTH RATE OF PET BOTTLES IS ABOUT 25%

• PLASTIC COLLAPSIBLE TUBES ARE GROWING @ 10-12%

INDIAN PACKAGING INDUSTRY- A HIGHLIGHTS

• MORE THAN 8000 CORRUGATED FIBRE BOARD BOX MANUFACTURING UNITS.

• CORRUGATED PACKAGING INDUSTRIES ARE

GROWING @ 10-12%.

• CORRUGATED INDUSTRIES ARE ADOPTING NEW TECHNOLOGIES IN TERMS OF CONVERSION PROCESS,WATER PROOFNESS AND AUTOMATION.

• METAL PACKAGING IS GROWING @ 8-10 %.

• GROWTH RATE OF GLASS PACKAGING IS ABOUT 5-6%.

RIGID PACKAGING- A STATUSMETAL & GLASS

OTS5%

OIL CANS47%

TFS6%

GEN LINE42%

44%

17%

14%

11%

10% 4%

liquor softdrinks pharma

beer food/dairy other

INDIAN PACKAGING INDUSTRY- A HIGHLIGHTS

• NATURAL JUTE FIBRES ARE ALSO CONSUMED IN INDIA.

• ABOUT 54% PRODUCTION GOES IN PACKAGING.

• PACKAGING MACHINERY IS GROWING @

10%.

• LABEL MARKET AROUND 2 BILLION SQUARE METERS

• LABEL INDUSTRY GROWTH 20-25%

LABEL INDUSTRY

Overall growth in Indian label industry is 13%. TO will 1 bio USD in next 3 yrsConsumption of label stock will increase from 256 mio sq m in 2002-03 to 1 bio sq m in 2007-08.New concepts of In mould labels & RFID getting popular

-INDIA-

MARKET OPPORTUNITY

PRIME OPPORTUNITY TODAY

LIFESTYLE CENTRING ON FOOD

Processed Food Consumption to triple in Next Ten Years

• India now ranks 5th amongst 30 emerging retail markets in developing countries.

• Organized retail will grow from 2 to 20% of the total retail industry at the end of the decade.

• Consumer spending in India has grown at an average rate of 11.5%.

• About 25 mio sq feet of organized retail space will be coming up.

INDIA – THE RETAIL OPPORTUNITY

THE IMPORTANCE OF

PACKAGING

&

CONSUMER’S EXPECTATION

EXPECTATION FROM PACKAGING

Different channels Different store configurations Different in-home needs

Adaptability

THE ACID TEST

• On-shelf Availability• Freshness• Quality• Value for money• Convenience

THE

CHALLENGES

• RIGHT PACKAGING MATÉRIAL QUALITY: OPTIMAL BALANCE BETWEEN LOW COST & PRODUCT PROTECTION.

• REQUIRED MOVE: SWITCH TO PERFORMANCE BASED SPECIFICATIONS - TO TARGET VALUES FOR KEY PROPERTIES.

• IN DEPTH KNOWLEDGE OF THE ENTIRE LIFE CYCLE OF THE PACKAGING AND THE REQUIREMENTS OF THE PACKED GOODS.

• STANDARDISATION OF SHIPPERS/PALLETS .

• REDUCE COMPLEXITIES.

• INCREASE EFFICIENCIES.

• INNOVATE & RENOVATE.

PACKAGING INDUSTRY IN INDIA … THE WAY FORWARD

TO COPE UP WITH GLOBAL REQUIREMENT

• TECHNOLOGY UP GRADATION.

• NEW INVESTMENTS TO BE ENCOURAGED.

• JOINT VENTURES, FREE EXCISE ZONE, DUTY BENEFITS ETC. ARE CREATED LOT OF OPPORTUNITY TO GROW CERTAIN NASCENT PACKAGING INDUSTRIES IN THE COUNTRY.

• SCOPE & POTENTIAL IS HUGE, HOWEVER WE NEED TO UNLEASH THEM.

PACKAGING INDUSTRY IN INDIA … THE WAY FORWARD

“Let us join hands together& tackle the challenges to

reduce packaging cost through optimum packaging.