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Demand for packaging to grow rapidly

01 AUG,2017

NFS Correspondent

The packaging industry in India is a mix of both organised medium to large players as well very small players. Domestic demand for packaging is expected to grow rapidly in coming years. FMCG companies are now widely adopting sustainable packaging technologies to reduce the cost of packaging as well as taking steps to ensure recycling of packaging material which also protects the environment.

 

India is the second largest producer of food in the world and one of the major consumers of packaged foods and beverages. Increased consumer awareness and growth of the processed food and beverages industry are the major factors for a major shift from unpackaged vending to packaged forms of sale. Some other factors like exposure to new and improved packaging methods, relaxation in food and beverage import norms, increasing modern retail outlets and changing consumer preferences have all resulted in brand owners recognising the need for advanced packaging solutions at economical cost. According to Devesh Pandey, head, food Packaging & Dispatch, Amul India “Packaging has served the Indian economy by lengthening and also preserving the shelf life of products ranging from milk and biscuits, processes and semi-processed foods, edible oil etc.”

 

MARKET WATCH

 

According to a report by MCG, “The Indian consumer packaging market is estimated at around Rs 685 billion in 2015-16 and is forecast to reach Rs 1,170 billion by 2020-21, at an annual growth rate of 11.3%. The packaging industry in India is valued at Rs 1,270 billion (2015-16). Within the industry, with a 54 per cent market share, consumer packaging is ahead of its bulk packaging counterpart.” According to a report by PwC, “The packaging industry has exhibited muted growth over the last year, with a slowdown in industrial growth and drop in consumer demand. However, respondents are positive about growth in the next 12 months. They consider India’s low per capita packaging consumption vis-à-vis that of developed economies, increasing disposable incomes, growth in enduse industries—especially packaged food—and a shift towards organised markets as the key growth factors.” The report also says, “The outlook for new capital investment is also positive as most companies plan to invest in new manufacturing facilities to cater to increased demand. Going forward, packaging companies plan to focus on driving revenue and profitability through an emphasis on exports, improved customer service and increased production efficiencies. Further, with the implementation of GST from 1 July 2017, the packaging industry will witness higher growth, as demand across key end user industries is likely to increase.” Research and Market report says, “During the period 2016-2021, the Soft Drinks and Food industries will be the highest packaging market share gainers (by units) with share growth of 3.4% and 1.3% respectively. The growing organized retail sector has been a significant driver of the growth of the Food and Beverage industries, which in turn drives the growth of Indian packaging industry. In addition, innovations in the packaging industry, such as the development of lighter packaging with better barrier properties, add to the growth of packaging industry. In terms of packaging material, Glass and Rigid Plastics will be among the major share gainers, with share growth of 0.7% and 0.6% respectively during 2016-2021.”

 

EMERGING TRENDS IN PACKAGING INDUSTRY

 

Major change in consumer lifestyles, large retail groups and food service industries have started using highly competitive mix of marketing and trading strategies.

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