“Instead of focusing on how to increase the per capita packaging consumption, the packaging industry must look at how they can expand the industry by adding value for the benefit of the two major stakeholders of the supply chain – the producer that is the farmer, in case of dairy and food industry and the end-consumer.”
Sodhi stressed that today the consumption is driven by the lower middle class and the bottom of the pyramid consumers. “For the packaging industry to see exponential growth, it is necessary to design packs that will boost consumption in this segment.”
“In the food sector, the industry will grow and the consumer will be satisfied when he gets to buy a product at a reasonable price and the farmer earns good value for their produce. The attempt should be made to reduce the gap between what farmer earns and what the consumer pays.”
The average cost of packaging material in packaged milk is less than 3% of the total cost in case of flexible pouches and about 9% in Tetra Pak cartons. “At Amul, we ensure that farmers get 80-85 per cent of the total price the consumer pays to buy the product. All the margins and costs related processing, packaging, transportation, etc is accommodated within 15-20%.”
Sodhi explained with curd (dahi) as an example.
“Initially plastic cups were used to pack curd. The cost of a plastic cup is around Rs 18, so the price of packaged curd to the consumer went up to Rs 80 per kilogram. Therefore, only consumers in the upper middle class bought the product. When we shifted to flexible pouches and brought down the price from Rs 80 to Rs 50 per kilogram, we saw a tremendous rise in demand. So, what’s required is affordable packaging for the masses. The packaging industry must focus on innovations that will enable affordability to the masses and the product demand will boost multi-fold.”
The second area that needs packaging innovations, according to Sodhi, is the ethnic foods and beverage segments. There are products like barfi, which if packaged in such a way that the shelf life can be extended up to six months, can attract massive demand. This is true for all kinds of local Indian sweets, said Sodhi.
The third area is high-efficiency packaging lines. “In India, low tolerance and highly efficient packaging lines are still imported. That’s a bottleneck. These packaging lines are so expensive that an average manufacturer cannot afford them. Therefore, they have to opt for low efficiency machines, which results in higher cost of products. It is important for us to start manufacturing fast, low tolerance packaging lines in India.”
Sodhi also highlighted the need to form a body that works with all stake holders to promote the use of recyclable packaging materials and also develops an infrastructure to recycle the post-consumer packaging waste.
“Packaging industry will grow when the producer and the consumer are happy. The innovations in packaging must aim to add value for the producer and for the end-consumer and not just for the manufacturers and suppliers,” concluded Sodhi.