Ahead of festive season, the flexible packaging industry is preparing to work overtime for catering to the demand from FMCG/F&B companies as it generates a substantial part of our annual revenues during this time.
Ashok Chaturvedi, Chairman & Managing Director of Uflex Limited
As we stand at the threshold of the upcoming festive season, the flexible packaging industry is preparing to work overtime for catering to the demand from FMCG/F&B companies as it generates a substantial part of our annual revenues during this time. The economy is buoyant thanks to an excellent monsoon earlier this year and the coming months shall be exciting not only for packaging but for the entire industry.
Furthermore, rural India is not far behind in the race, with its FMCG market expected to grow at CAGR 18.1 per cent this fiscal, the packaging industry is also donning the fervor of the festive season with impressive order pipeline. E-commerce, that has already proven to be the game changer for FMCG sector is pegged to grow at 36 per cent between now and 2020 is a harbinger of good times too. Among other things, what is more impressive about the forthcoming festive season is the growing demand for personalisation of packaging that the industry has been approached with. This is the age of bespoke packaging where one size doesn’t fit all and rightfully, so, coming to think of it, this makes the game all the more exciting and gratifying!!!
Although, the flexible packaging industry is estimated at $8 billion; it is yet to catch up and be at par with international standards/developed markets. In India, the “per capita consumption” is pegged at 4.3 per kg/person per year as compared to Taiwan where figure is 19Kg; in Germany the figure stands at 41kg and in the United States, the figure is a staggering 71kg which is the highest in the world. Currently, the growth rate is between 15%-17%; but the growth rate could increase to 20% in the coming years. Hence, the Indian markets have a substantial scope for growth.
The key factor for the industry is the growing preference for “Flexible packaging”. “Flexible packaging” as the name suggests can assume the shape of the product it packs. This gives limitless possibilities for the brands to create magic on the retail shelf. Rising disposable incomes, paucity of time, digitisation boom; advent of social media, rapid globalization, un-satiated expectations in terms of convenience of handling products, desire to derive value for money, rising concern for environment friendly packaging all perfectly weigh in favour of flexible packaging. As this form of packaging requires much less energy during the stages of manufacturing, transportation and disposal than its rigid counterpart, the future is only bright. The players who can continue innovating shall be the ones who shall survive.
Despite the size of the market, the industry is still dominated by small and medium players who have garnered as much as 90% of the market; large players have to cover a long way to catch up. The unorganized sector within the packaging industry in India may have thrown open a dirty game of price war, but the brands fully understand the merit of quality and innovation that only a handful of packaging mavens can bring to the table. The positives of advanced barrier properties; shelf life extension; freedom from counterfeiting; superior aesthetics and optimized functionality are far more compelling than the want of saving a few bucks at the cost of brand equity. The brands have realised this much to their advantage. As the old age saying goes ‘Jo dikhtaa hai who biktaa hai’(A product that is visible, shall sell) we all have to ensure that our products make ‘that final cut’ on the retail shelf to get picked up by the consumer.