Weldon Celloplast: Self Adhesive Labels Industry In India and The World - Packaging Grows as India Grows!

I have always been of the opinion, “it is the package that sells!” Every manufacturer of consumer goods realizes that good quality is imperative for long term success of the product. However it is an immediate and important need to first tempt the shopper to impulsively lift the product from the shop shelf. For this the manufacturers have to rely on the package design. The consumers get to experience the contents of the package only when they have reached the confines of their homes. It is another issue that repeat sale will happen when the customers find the product contents are meeting with their satisfaction. Thus it is necessary that a good product is packaged in an attractive and effective packaging. With the urbanized Indian consumer’s style of shopping undergoing a sea change from visiting traditional shops for buying goods to patronizing organized retail vends in air-conditioned ambience, packaging is getting the attention it should.

The current economic scenario and changing lifestyles in India are attracting the interest of many around the world. By the latest count, the Indian population crossed the figure of 1.20 billion people. In the last decade the addition to the population has been 181 million people, almost near to the total population of Brazil, the fifth most populous country in the world! India accounts for 17.5% of the world’s population. The Indian economy is growing rapidly, registering an 8.5 % growth in GDP. It is second most favored country for foreign direct investment (FDI) attracting an investment of US$ 25.9 billion in 2009-2010. Foreign exchange reserves have reached a figure exceeding US$ 276 billion. According to a report by McKinsey, the economy will grow five fold in 20 years. India is the biggest democracy in the world with a large English speaking population of which 64.8% is literate leading to a bulging middle class segment. Couple this with the fact that 64% of all the people in the country are in the workable age group of 15-59 years and 54% of the population is under the age of 25 years. This huge number of over 600 million young people will be getting education, working hard and earning more to spend more. It is obvious that retail spending in India is poised to grow exponentially.

According to the report, “Strong & Steady, 2011” Price Waterhouse Coopers (PwC), India’s retailing sector currently estimated at US$ 500 billion is expected to grow to US$ 900 Billion by 2014. According to some reports, in two years retail real estate stock in India will become double, from approx. 50 million square feet to almost 100 million square feet. The Indian retail industry is the fifth largest in the world and is growing at a fast pace. Rapid urbanization and higher spending power of a young generation are factors contributing to this amazing growth. It is interesting to note that due to the changes taking place, the large number of working women in an otherwise traditionally conservative society, are also responsible for this growth in spending. Retailing in the country is still at a nascent stage and it will be some time before it becomes the predominant and accepted way of selling across the nation. Most of the Indian consumers are used to the idea of visiting the traditional neighborhood stores for their needs. The shop owner is virtually the pushing salesperson for the brands that provide him better margins. As organized retailing becomes more and more acceptable, shoppers are experiencing the difference. There is a wide variety of products lying on the shop shelves yearning for their attention. The persistent shop owner pushing particular brands is missing. At this point in time the printed package is of prime importance. Innovative packaging tempts the shopper to reach for the product.

The highly fragmented Indian packaging industry is spread evenly across the length and breadth of India. The total industry size is estimated at US$ 19 billion as against the global market of US$500 million. The per capita usage of packaging in India is small at US$ 15.00 per person as compared to a global average of US$ 100.00. This does indicate the potential for growth in this market. According to Indian Institute of Packaging, the packaging industry in India is growing at a rate in excess of 15% per annum. However some industry experts express that the growth is much higher at 20-22%. Food and beverage account for 85% of packaging materials consumed in India, Pharmaceuticals 10% and balance 5% is other industries. Close to 50% of all the packaging materials used is converted into the printed packages, flexible packaging accounts for 22%, printed cartons 17%, Labels 3% and others about 8%. The rest of the 50% materials are accounted for by rigid packaging, metal, glass, caps/closures and others. The printed cartons and labels have been largely printed and converted by the offset printers employing various die-cutting, converting and decorating operations offline. The offset printing industry is well established in the country and has spread all over. This segment attracts continuous investment, expansion and up gradation. Self adhesive labels remain the forte and specialization of the narrow web label printers, who continue to grow, expand and technically upgrade steadily. In this segment the technology changed from letterpress printing process to flexographic printing and further on to combination printing using various printing and converting processes online with their narrow web presses. These include flexo, offset, screen, hot foiling, cold foiling, etc. Flexible packaging and Shrink sleeves are other segments of package printing that have attained a big market size owing to a steady 17% growth rate in recent years. The industry in these segments has been employing only the rotogravure printing in their manufacturing programme. The rotogravure printing industry is also well established and growing in India. It is the preferred technology for converting on wide web presses, providing economies of scale with high production speeds. Of late due to the need for shorter runs, faster deliveries and multi-process converting, the narrow web press suppliers are going wider to mid web presses with advanced multi process capabilities and offering these equipments to printers. These are high end presses that empower the printer to print and convert labels, folding cartons, shrink sleeves and flexible packing inline on the same press. It is just a matter of time when we shall see a paradigm shift in this direction.

As for the materials, with growth in the food and beverage industry the demand for specialized films and film laminates has escalated. In recent times due to environmental concerns the Indian authorities have restricted the use of plastics in certain large volume food packaging. The directive to use bio-degradable substrates has initiated a need to develop paper based substrates that will fill the void that this restriction has created. While the market for special films will continue to grow, social responsibility commitment towards a safer environment will lead the packaging industry to look for new and safer arenas. Waste management and recycling are also issues that need the converters attention. Producing a great package may bring in a lot of success but the effort to reduce the impact of packaging waste on earth, will bring satisfaction.

Written for the innaugral issue of Package Print Worldwid (PPW) magazine launched by Tarsus group at Labelexpo-Euroe 2011, Brussels, Belgium. by Harveer Sahni, Managing Director, Weldon Celloplast Limited, New Delhi India 19th June 2011