When Wrigley, the multinational confectionery brand, decided to do away with the extra paper sleeve around its chewing gum and went for slimmer packs, the company saved 745 tonnes of paper altogether in India, Europe and Russia.
Frooti, the popular mango drink, has gone through half-a-dozen variations in shape and style of packaging since 2004. The objective has been to catch the eye of consumers and tap rural markets with smaller packs.
HEAT and eat
ConAgra Foods’ microwave popcorn introduced paper bags that can be microwaved as well as used as a container to hold the snack.
For FMCG companies, packaging is not just about utility and inevitable cost but an integral tool that can grow their businesses, say senior research analysts Usman Shaik and Divya Kumar of Beroe Consulting, citing these instances to illustrate the point.
These are lessons the paper and board industry can use to tap a growing market. The growth of organised retailing will drive strong awareness of packaging. The $17-billion Indian packaging industry is growing at 14-15 per cent, driven by increasing demand for packaging solutions amid rapid lifestyle changes.
Foreign direct investment in retail will only spur this growth. Printed cartons account for 17 per cent of the packaging industry, said Shaik, addressing the Fourth Annual RISI Indian Seminar on trends in the Indian paper industry. RISI is a multinational information provider on the forest products industry.
Packagers should focus on this segment as manufacturers target rural markets where low infrastructure is driving the need for innovative packaging that protects the product while enabling ease of use and attracts customers, Divya Kumar said.
Ajay Srinivasan, Director, CRISIL Research, said paperboard, which represents the packaging sector, accounts for about 5.3 million tonnes of the 11.5-million-tonne paper industry.
About 60 per cent is Kraft paper used in bulk packaging and the rest includes a range of products for consumer packaging. FMCG growth will drive this sector.
Key drivers
Organised retailing, about 7-8 per cent of total retail, is expected to jump to 20 per cent of retail business in five years.
While demand growth for paperboard was slightly less than 6 per cent last year, and is the same this year, given general economic conditions, it is projected to grow from 2013-14 to 2017-18 at a compounded annual rate of over 7 per cent.
The key drivers of this spurt will be pharmaceuticals, food, textiles and FMCG products.