WORLD PACKAGING CONGRESS ORGANISED BY INSTITUTE OF PACKAGING

WORLD PACKAGING CONGRESS ORGANISED BY INSTITUTE OF PACKAGING AND GRAPHIC ARTS, CROATIA Split, Croatia 6 Th June, 2012 ECONOMICAL, SOCIAL AND ECOLOGICAL ASPECT OF PACKAGING AND INDIAN MARKET POTENTIAL” “ Prof. NARAYAN C. SAHA DIRECTOR

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 PACKAGING

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

INDIAN INSTITUTE OF PACKAGING (IIP)

REGIONAL CENTRES CHENNAI HYDERABAD KOLKATA

ACTIVITIES • TRAINING & EDUCATION • TESTING & CERTIFICATION OF PACKAGING MATERIALS & PACKAGES. • TECHNICAL CONSULTANCY THROUGH ADVISORY STUDY VISITS. • PACAKGE DESIGN & DEVELOPMENT. • NATIONAL & INTERNATIONAL EXHIBITIONS. • NATIONAL PACKAGING AWARDS- “INDIASTAR”

EXHIBITIONS • ANNUAL NATIONAL PACKAGING EXHIBITION “INDPACK” • BI-ANNUAL INTERNATIONAL PACKAGING EXHIBITION ‘INDIAPACK” • PARTICIPATION IN INTERNATIONAL PACKAGING EXHIBITIONS LIKE – INTERPACK – EMBELLAGE – PAPRO ETC.

INDIAPACK -2010 GLIMPSES

NATIONAL PACKAGING AWARDS • EXCELLENCE IN PACKAGE DEISGN I. E. INDIASTAR AWARD (BIANNUAL) • EXCELLENCE IN PACKAGING MACHINERY DESIGN I. E. PACMACHINE AWARD (BIANNUAL)

INDIA – THE PROFILE • Climate Area – 3. 3 mio Sq kms • 3 distinct seasons • Summer - from March to June • Rainy - from June to October • Winter - from November to Mar • Extreme Seasonal Variations Length – 3300 kms • Mean Summer Temp : 32 -36 C • Mean Winter Temp : 10 – 25 C Logistics Challenge ! Coastline-7600 kms • Natural Hazards • Cyclones Breadth – 3000 kms • 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%, Muslims 13%, 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. § 10 th largest in the world in terms of currency conversion § 4 th 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 125 th 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 person every year is 600 m 3, 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.

MEASURES TOWARDS …………. . GREENER ENVIRONMENT • 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.

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 5 th 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 5 TH DIMENSION

4 “P”S OF MARKETING MIX 1. 2. 3. 4. Product Price Positioning Promotion Packaging - 5 th 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 NO. OF PLAYERS LARGE - 60 MEDIUM - 7, 000 ORGANISED 14, 000 SMALL 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 STATUS METAL & GLASS

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 yrs Consumption 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

-INDIAMARKET OPPORTUNITY

PRIME OPPORTUNITY TODAY LIFESTYLE CENTRING ON FOOD Processed Food Consumption to triple in Next Ten Years

INDIA – THE RETAIL OPPORTUNITY • India now ranks 5 th 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.

THE IMPORTANCE OF PACKAGING & CONSUMER’S EXPECTATION

EXPECTATION FROM PACKAGING Adaptability v Different channels v Different store configurations v Different in-home needs

THE ACID TEST • • • On-shelf Availability Freshness Quality Value for money Convenience

THE CHALLENGES

PACKAGING INDUSTRY IN INDIA … THE WAY FORWARD • 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.

“Let us join hands together & tackle the challenges to reduce packaging cost through optimum packaging.