Packaging has become an integral part of life, as no product can be delivered safely without the package. More products are being launched in the market, due to the consumer demand and for convenience.
Lifestyles are changing in urban India, with an increasing population of working people. There is a lot of demand for packed food products. Unlike the developed countries, the growth is in its positive phase, and it has not reached the saturation level.
Consumers are inclined towards spending more on food, demonstrating a growing preference for higher-quality products. Healthier food options have become more prominent on retail shelves, and attract attention.
The food packaging industry is driven by the developments in technology in the field of packaging materials, food science and information technology. The demand for consumer convenience is satisfied using the technology, be it economy packs, new products or smart packs.
Good cost/benefit ratios are achieved by methods like replacing thick mono-layer materials with thinner multi-layer materials or with compact packs to reduce the distribution cost.
A lot of improvements have happened in the supply chain and inventory management using bar codes and data management software in the last two decades.
The trend continues with introduction of radio-frequency identification (RFID) in the supply chain, that promises more speed and tracing abilities.
Trends
The food packaging safety issues have to be dealt with utmost concern by the industry. It has to follow the food packaging regulations given by the governing bodies to prevent food contamination.
Testing has to be done to comply with the rules regarding migration of unwanted compounds from package to food. In the wake of possible food bio-terrorism attempts, the food packaging needs to protect against microbial contamination and product tampering efforts.
Antimicrobial packaging materials are used to inhibit microbial growth. Antimicrobial agents are either coated or incorporated in the packaging material.
With continued efforts, the food packaging industry is constantly trying to improve the shelf-life using new technologies like vacuum packaging and modified atmosphere packaging.
Active packaging is used to improve the shelf-life further by monitoring and modifying the headspace, continuously using absorbers and releasers. Self-heating and cooling packs are being developed for on-the-go snacks.
Intelligent Packaging is one more field where lot of developments are happening. Intelligent packaging uses smart devices like labels or tags attached to primary or secondary packaging to communicate information about the pack.
Devices like time temperature integrators can be used to monitor storage temperatures or temperature abuses during transit whereas simple reversible temperature indicators can be used to indicate desired temperature for consumption.
Freshness, leak, gas and microbial indicators give information about package integrity and safety. Electronic identification tags can be coupled with indicators to automate sensing of information.
As the world is moving towards sustainable development, the pressure is on the packaging industry to go green. Sustainable development gives the guiding principles for meeting the needs of the present without compromising the ability of future generations to meet their own needs.
The focus is on using materials without depleting the resource. The economy, the environment and society should be addressed equally while designing a package. The packaging functions should not be neglected in the process.
Some of the points considered for going green are:
• To use the minimal but adequate amount of materials;
• To use energy-efficient technologies, and
• To use renewable and recycled materials wherever possible
According to a survey, packaging constitutes one-third of the municipal solid waste in developed countries. The developing countries continue to improve their living standard and per capita package consumption indicating significant growth in packaging waste.
The 3Rs (reduce, reuse and recycle) should be efficiently used to minimise the amount of post-consumer packaging waste. Bio-degradable polymers can also be used for suitable applications. These polymers completely degrade when exposed to microbials under suitable conditions into natural product.
The post-consumer packaging wastes should be processed efficiently in environmentally-friendly manner. The assessment of alternative production systems can be done to evaluate the better option.
Food packaging industry globally
The global food packaging industry is likely to see sustained growth. The factors fuelling the market include innovative technological processes to extend food product shelf-life. The growing demand for single-serve products will also boost the food-packaging demand.
Overall market demand is led by meat products, beverages and snack foods. Larger disposable incomes and growing demand for convenient packaged ready-to-eat foods continue to spur growth. Food safety and bio-security comes next in the priority list.
Microbial contamination is the major cause for food-borne illness, and hence innovative methods like anti-microbial packaging materials, bio-chemical sensors and indicators and advanced integrity inspection systems are increasingly sought for.
According to Freedonia, the demand for packaged foods is expected to grow close to 2.5 per cent yearly through 2014 to almost $8 billion in the United States.
Flexible foodservice packaging is expected to grow at a faster rate than rigid packaging, at almost three per cent yearly growth to exceed $3.5 billion in 2014. Pouches will lead the flexible foodservice packaging segment, encroaching on the metal cans market.
The rigid foodservice packaging market is predicted to expand at close to two per cent yearly to reach almost $4.5 billion in 2014. The world meat, seafood and poultry packaging (muscle food packaging) market is predicted to reach almost $31.5 billion by 2017, according to global industry analysts.
The main market drivers include better packaging practices, the use of case-ready packaging and developments in production technologies. The rising demand for packaging is being fuelled by a greater demand for convenience foods, ethnic foods and microwaveable products.
The world frozen food market expanded 3.5 per cent in 2010 to exceed $1,92,000 million, according to MarketLine. The market is predicted to exceed $2,28,000 million by 2015, a 19 per cent increase in five years, growing from a volume of around 38,000 million kg to almost 43,500 million kg in the five-year period.
Frozen meat products represent the leading sub-segment at over 40 per cent of the overall market. The European Union (EU) represents almost 38 per cent of the global frozen food market.
The world canned food market is expected to reach almost $92,700 million in 2015, a 15 per cent increase in five years, according to MarketLine. The market's volume will exceed 23,000 million kg in 2015, a 10 per cent increase in the five-year period.
Canned meat products represent the leading sub-segment, representing over a quarter of the overall canned food market. The EU represents almost 50 per cent of the global canned food market.
The world ready meals market is expected to reach almost $80,000 million in 2014, a 20 per cent increase in five years, according to MarketLine. In volume, the market is predicted to exceed 13,250 million kg in 2014, a 16 per cent increase in the five-year period.
Frozen ready meals represent the leading sub-segment at over 60 per cent of the overall market. The EU represents almost 40% of the global market.
The Indian food packaging industry
The Indian packaging industry, worth $24.6 billion, has 22,000 firms, comprising raw material manufacturers, machinery suppliers, ancillary material suppliers, etc.
India is the sixth-largest packaging market worldwide. The packaging industry is expected to grow at 12.3 per cent compound annual growth rate (CAGR) during next four or five years to become the fourth-largest global market, with sales of $42.7 billion.
The per capita consumption of packaging in India is very low compared to global standards (merely 4.3kg per person per annum, as against Germany's 42kg and Taiwan's 20kg). India is following the global growth trends.
According to the ministry of commerce and industry, the break-up of packaging industry in India is as follows – processed food packaging is 48 per cent; personal care packaging is 27 per cent; pharma is six per cent; and the rest is 19 per cent.
According to a study by Tata Strategic Management Group, the Indian ready-to-eat food market is estimated to grow to $727.09 million by 2015 from the current level of $32.09 million. The growth trend of the Indian packaging industry is in line with that of the global packaging industry.
According to Thomas Schneider, president, World Packaging Organisation, the Indian packaging industry will see a substantial growth in coming years. The increasing awareness regarding clean water, safe food and pharmaceuticals will drive this growth.
With increasing retail sector, the concept of track and trace devices especially for product identification such as 2D barcodes, RFID, etc. will penetrate aggressively into the Indian packaging industry.
The challenges that the industry is facing today are lack of regulatory clarity in packaging; consumer awareness towards sustainable packaging, and stress on green packaging materials.
Indian packaged food and FMCG products face stiff competition from low-taxation countries such as China and Thailand in the global market. Some of the latest technologies available in the developed countries such as active packaging and smart packaging have to be imported and introduced to India now.
The innovative methods for safer foods using active and intelligent packaging has not been commercially successful because of the higher costs.
The domestic market needs to acquire and customise these technologies the Indian way, so that the costs can be brought down and affordability can be achieved from domestic food processor and FMCG products manufacturers.
In India the value additions to food products is only seven per cent as compared to 23 per cent in China; 45 per cent in the Philippines; and 188 per cent in the United Kingdom.
The Indian food and FMCG packaging market has witnessed a growth of 15-20 per cent in 2012. More than 80 per cent of the total packaging in India constitutes rigid packaging. The remaining 20 per cent comprises flexible packaging.
The changing technology in the food packaging arena has uplifted the quality and shelf-life expectations of food products. With increasing food wastage, food packaging is becoming one of the vital courses of action.
Many new packaged food categories, such as cheese, have started to enjoy popularity in Indian cooking. The leading manufacturers launched products with a health and wellness positioning in 2011 and 2012.
The trend grew to become quite significant in dairy, such as probiotic yoghurt and low-fat milk and cheese, and in packaged rice, in which brown rice and other healthy variants were increasingly popular. The consumption of oats as breakfast cereals and as an ingredient in other products, such as noodles and biscuits, witnessed a rise over this period.
Independent small grocers continue to dominate the distribution of packaged foods offering convenience in terms of closer proximity to homes and free home delivery to consumers across the country.
However, supermarkets and hypermarkets also have an impressive increase in sales during the recent years, because of their lucrative benefits, including discounts, freebies, loyalty programmes and a wider range of products to choose from.
Packaged food is expected to continue to register positive growth over the next years. With hygiene and convenience as the major growth drivers, sales of packaged food are likely to increase strongly.
Growth will be supported by rising disposable incomes and the rising affluence of consumers, which will make them more willing to spend on food products. In addition, packaged food manufacturers are expected to introduce a higher number of innovative and healthier products.
