Consumer packaging: growth and trends

The new government is making all the right noises, which Rishabh Singhvi says, will allow the packagers, who have ramped up capacity to focus on augmenting demand for products.
The optimism of ‘acchhe din’ extends to the packaging sector as well. The modest pick-up in GDP growth expected during the second half of FY15 augurs well for our packaging industry. GDP growth is expected to rise to 5.5%, and retail industry growth to 17%, from the current levels of 4.7% and 13% respectively.
As such the Indian consumer packaging industry has many factors working in its favour. Our country’s favourable dynamics such as a growing young population, higher disposable incomes, lifestyle aspirations, media penetration, awareness, access to easy financing, e-tailing and effective marketing are working for us.
The single greatest obstacle has been the partial adoption of 51% FDI in multi-brand retail with most states yet against it. The ‘Great Indian Consumer Retail Story’ is yet to evolve. This is affecting the current fortune of packagers who ramped up capacity in expectation of exponential growth.
How do packagers augment demand for their products? It is important to note here that various packaging formats effectively compete with one another. For instance, a manufacturer of biscuits has a choice of using a glass jar, a tin, a laminate wrapper or a carton for marketing his product.
Packagers would do well to focus on the following trends that will determine demand for their products.
Support brand owner’s efforts towards brand building and influence perceived brand value: Packages should communicate the values of the brand effectively and differentiate the product. For instance, one can have two different kinds of cartons for an economy product versus a premium product. For the packager, this means investment in development capabilities, faster development cycles and more new products.
Maintain stronger focus on cost, cost and cost: There is tremendous competition between brand owners for shelf-space, and among retailers as well. The consumer is well informed of prevailing trends and pricing. Increased competition and awareness results in extreme cost pressure on packaging. Packagers need to constantly reinvent products to remain relevant.
Capture consumer attention at point-of-sale: One can never over-estimate the importance of outstanding design. Packaging must push the frontier and find new ideas and technologies that will make it more relevant. For example, consumers will pay more for packaging that can be used for storage even after the product has been consumed.
Reflect the growing importance of sustainability: ‘Going green’ is an essential attribute of packaging. Indian trends mirror global trends. The search for environmentally sustainable solutions must remain an ongoing process.
Focus on continuous improvements: Packagers proactivelychallenge today’s successful packaging solutions by suggesting innovations based on consumer insights, experience and expertise. Do not rest on your laurels. Some one else may suggest a better solution.
Support flexibility: Packagers must manage fluctuations in consumer demand with alacrity and speed by adopting just-in-time, vendor-managed-inventory and short call-off periods.
Recognise that the future belongs to e-tailing: Packaging must therefore be stronger, tamper-evident, flexible and multi-purpose to service individualised orders made traceable with RFID and sensor-oriented technology. Establish your own R&D and work ceaselessly on materials and techniques.

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