By Sanjay Gupta*
Packaging is the art, science and technology of wrapping, protecting and showcasing products for consumer-centric, commercially viable manufacturing, distribution, storage, movement, sale and use with ease for ultimate satisfaction and delight to the consumer.
- Packaging is the mirror image of any product or an organization
- Packaging is an important attribute that cannot be compromised or devalued but has to be experienced as a personal emotion
- Packaging is certainly the last point or time an organization has an opportunity to ‘touch’ the consumer
- Packaging is the fifth largest sector in India’s economy and is one of the highest growth sectors.
- The packaging industry in India is/was predicted to grow at approx. 12%-15%, with flexible packaging growing at 25% and rigid packaging at 15%
- As per global consulting firm EY, the packaging industry is/was expected to witness an outstanding growth during 2016-21 in India and anticipated to reach USD72.6 billion by the FY 2020. (Key factors are rising population, increasing income levels, and changing lifestyles)
- The Indian packaging industry constitutes about 4% of the global packaging industry.
- Towards growth in Packaging consumption, there is also one more important catalyst and that’s the trend of more urbanization in Indian cities. Notably, the percentage of the urban population is growing all over the world. An increasing rate of urbanization stimulates demand for packaged goods and the development of retail infrastructure, subsequently driving up demand for packaging.
In the time since Pandemic, consumer landscape concerning preferences, choices, expectations, desires, brand loyalty, Price point, consumption pattern, buying method, shopping experience, repeat buying …….., everything has changed.
Further, sentiments and awareness towards sustainable packaging have also increased manifold.
It is important to note that, manufacturing, logistics, storing, warehousing, inventory norms, ageing, credits, supply chain ecosystem has also observed a significant transformation.
Just to emphasise, Globalisation which was an engine of prosperity to global economies has suddenly started working against the basic principles during the pandemic due to closure of borders which led to serious supply chain disruptions or rather complete breakdown of supply chain ecosystem impacting both demand and supply side.
For a variety of exogenous and endogenous variables right from Trade barriers, Global & Domestic Political Volatility, Violations of Intellectual Property, Crude Oil Price, Currency Fluctuations, DE globalisation, Severe and Fragmented logistics & Supply Chain Issues, Sentiments against China, Development of China+1 Strategy, Sustainable & Climate Change Issues, Cartel formations….. There has been a very steep surge in raw material prices which is affecting the Packaging Industry.
This is an era of unpredictable extreme volatility where you need to develop tools, knowledge bank, skillset technology, human resource to predict unpredictable outlook but very very scientifically as you cannot afford to have miss else land up in a complete knockout business situation towards the ruin of your brand.
So, in brief, agility and resilience of client-vendor, technological limitations, the readiness of local vendors and availability of resources i.e Human, Technical, Raw Material…..
Further, in Packaging, infrastructure from techno know-how, machines & equipment, raw material and value engineering formats are dependent on China and European Union countries.
It is high time to accept that apart from manufacturing scale & capabilities, we, in Packaging Industry need to invest a sizeable pie in R & D.
Digital Procurement Transformation: Technology intervention is the key to procurement transformation, but procurement function needs to be very very agile and very quick to react else delay may be devastating. It is high time to tap tech for breath-taking consolidation.
As I understand, this function is not as fast as other functions to adopt big technological trends like investments in automation, big data and the use of artificial intelligence.
If organisations do not invest in full-scale transformation and relying on small scale incremental changes, businesses may be in the red zone.
If we need to make procurement transformation succeed, it should be –on a top-down approach.
Technology is constantly creating solutions to unforeseen problems at a fast pace
Problems we had not realised existed.
Technology and Transformation go hand in hand
On a sustainability issue, the COVID-19 pandemic is a live example that nature punishes humankind excruciatingly when we keep on abusing our planet.
We must admit that Pandemic has forced mankind to think on a serious note that whether the conventional yardstick to measure the economic performance of an economy by GDP based growth model is leading to a fast depletion of natural wealth and resources and present pattern of growth adopted by society is not sustainable.
It is also evident that we are heading towards an ecological credit crunch and humankind is under severe ecological debt as we are over utilising natural resources without replenishing and this crisis is far worse than all the financial crises we have ever faced.
This is a good time to think that is it wise to invest all of our resources in creating a financial wealth of a nation without creating value chains to save the ecosystem and when nature punishes us after a while, we invest this wealth to save our race.
Further, there had been various government regulations on waste management systems on fast track.
The industry has also understood that India is one of the youngest nations globally wherein Y and Z younger generation who is going to rule the market till at least 2040 believe in green businesses.
So, heightened consumer awareness and environmental concern are indeed changing consumer’s perception and expectations for quality and safety. This is linking social good to business good.
It has become important as a social, moral and ethical responsibility to fast track eco-friendly initiatives such as conservation of natural resources like water, use of solar & renewal energy, reduction of carbon footprint in the entire supply chain right from packaging, manufacturing, logistics, housekeeping, construction and settlement of plastic waste generated from packaging material through EPR model to facilitate circular economy.
These initiatives will also help in social and economic transformations.
As famous environmentalist Robert Swan says that the greatest threat to our planet is the belief that someone else will save it. We must understand two facts-one, there is no plan B and two, this is one of the corporate problems where they cannot throw money and get away with it.
There is a saying that if we sweat more in peace, we will lose less blood in the war. So, it is high time for all of us to set our houses in order so that we and our next generations can see a better, cleaner, safer and healthy tomorrow. This will be one of the best gifts we can pass on them as an inheritance.
*Vice President – Corporate Procurement and Packaging Development, DS Group. Packaging expert with over 30 years of experience. Runs YouTube channel ’Shifting Focus