Dairy products are perishable in nature, and thus, innovative packaging plays a significant role in their storage, transportation and distribution. It acts as a barrier to protect them against any physical, chemical and biological damage. As Indian consumers become health-conscious and more aware regarding the high nutritional value of dairy products, the demand for convenient and informative packaging continues to rise.
According IMARC Group estimates, the volume of retail unit for dairy packaging has increased owing to a significant shift from unpackaged and homemade dairy products to packaged variants. This can be highly accredited to factors such as growing hygiene concerns among consumers and hectic lifestyles which have facilitated the demand for ready-to-consume dairy products.
Despite an upward trend in milk procurement prices in the recent years, dairy companies have managed to survive largely on the back of improved revenues from value-added products.
For instance, Hatsun, Kwality and Parag Dairy have stepped up focus on value-added higher-margin dairy products so as to aid their revenue and margins. As per estimates, value-added products enjoy margins of 10-30%, against low margins of 4-5% which liquid milk entails. This has prompted many global players to enter India and commit big investments in VADPs.
In order to increase their consumer base, manufacturers have been constantly targeting the young population by introducing attractive and aesthetically appealing packaging.They have also been expanding their distribution networks in lower-tier cities and rural areas. Additionally, tropical conditions and inadequate refrigeration facilities have prompted packaging firms to come up with innovative solutions, such as aseptic and UHT packaging to maintain the quality, and improve the shelf life of milk and other VADPs.
Some latest investments in India’s dairy packaging include Schreiber Dynamix’s Rs 100 crore-aseptic packaging plant in collaboration with Tetra Pack, and Uflex’s Rs 580 crore-aseptic plant. Mahindra Group introduced innovative poly packs for Saboro that turns blue on adulteration; Uflex launched a low-cost UHT poly pack to increase the shelf life of milk to almost a month. Owing to these ongoing technological advancements coupled with strong economic growth, the Indian market for premium dairy products is set to continue its double-digit growth.
The author is head — knowledge process operations, IMARC