Pack it up
Food
packaging is vital to not only attract customers but also to provide
safe and edible food to them. GCP Ranga Rao discusses more about the
global frontiers of food packaging
Since
the last few months, Indian media has been buzzing with news on the
impending ‘retail boom’. Headlines like‘Reliance to invest
Rs 25,000 crore’; ‘Bharti ties up with Wal-Mart’; ‘US$
412 billion investment in retail projected’, or ‘Reliance
Fresh launched’; ‘Tata, Aditya Birla and other biggies planning
forays’, have become too common. Organised retail, which hardly
comprises two to three per cent of the US$ 250 billion Indian retail
business, is expected to go up to at least 15 per cent by 2010. As a
result, in addition to consumers getting the benefits of mass retailing,
upgradation of technologies and practices in the entire value chain
is going to change the whole look of the market-shelves. One major fallout
of all this is the boost that the packaging sector is going to get.
With foodstuffs taking up most of the shelf-space ranging anything between
60 and 80 per cent of the area in a typical supermarket, food packaging
will be the most interesting area to watch out for.
The
author is a post-graduate in Chemistry from Andhra University and is
heading the Food Packaging Technology Department of CFTRI, Mysore. He
has previously worked at Federal Research Institute for Cereal and Potato
Processing, Detmold, West Germany, and led the team that developed technologies
for Ready-to-Eat foods in Retort Pouches& Trays, which were applied
in several Indian industries. He has also headed consultancy projects
for Indian f ood industries. His current areas of research interest
include package design and development, thermal processing, computer
modelling and simulation. The author has served as Chief Editor of Indian
Food Industry during 2001-03 and as Organising Secretary of FOODPLUS-2005,
the five-city conference on value addition to foods. He can be contacted
at gcp_r@yahoo.com
Retail chains – the driving force The sales dynamics in
supermarkets are too well known. Self service being the governing paradigm,
a typical consumer walking down the aisle with a shopping list won’t
be too sure of what brands to pick up. Most of the buying decisions
are believed to be made in 40 seconds – the so-called 40-second
window. The packages that grab a consumer’s attention – the
ones that he picks up and looks at more closely – will be the ones
that most likely end up in his shopping cart, since it is said that
there is an 87 per cent chance that a customer buys a product that he
picks up to see. That being the key factor, the retailer wants the products
to be able to jump off the shelves through their packaging – packaging
that is more appealing, communicates faster, more functional and easier
to stack on the shelves. No wonder then, that global retail giants like
Wal-Mart, Metro, Costco, Tesco, Carrefour, Kmart and others are calling
the shots in deciding what products to be placed on their shelves and
how those products should look like. In developed countries like US,
where supermarket sales are of the order of $ 500 billion, the retailers
are providing the catalysts for change in the packaging industry. They,
in addition to material and technological developments, are playing
an important role in packaging evolution.
Packaging innovation – a success mantra The grocery business,
in which foods form the major component, is known to operate on extremely
tight margins. The margins are getting further narrowed down with multinational
supermarket chains backed by global sourcing operations trying to outdo
each other in offering best quality products at lowest price points.
While the retailers want packages to perform more on the shelf in terms
of impact and functionality that in turn demand more sophistication,
they also put pressure on manufacturers to hold price-lines. The retailers
ideally want newer packages with newer features every fortnight to entice
consumers to buy their products. The competitive environment within
a supermarket has also been hardening. For example, in the US alone,
over 15,000 new food products are introduced every year. The total number
of stock keeping units (SKUs) in supermarkets has risen exponentially
over the years. The result is the stiff competition that new products
have to face in jostling for shelf-space. It has become imperative for
food manufacturers to focus on product differentiation and value proposition
achieved through innovative productpackaging developments in order to
survive. More often, it is achieved through introduction of packaging
innovation in terms of newer materials, structural systems, opening
and closing mechanisms, dispensing systems and graphics. In fact, packaging
has become the success mantra for new product introduction. Contours
of global packaging industry The global packaging industry is now worth
about US$ 450 billion, in which the food and beverage sectors take up
a dominant share of nearly 60 per cent. The profiles of global packaging
industry in general and food and beverage packaging are presented in
Tables 1, 2 and 3.
The Indian context In the context of these statistics, it may be interesting
to note that the Indian packaging industry is now worth about US$ 14
billion, out of which 75 per cent is attributed to food and beverage
sectors. The organised retail boom that is right now happening in India
is likely to have a massive impact on food packaging in terms of size
and sophistication. The supermarkets with their mass display of
