New Delhi — Affordable pouch-sized plastic packaging is emerging as a key driver of growth for India's packaging sector, but some in the industry are warning that a lack of recycling infrastructure could stand in the way.
The head of a dairy cooperative in the state of Gujarat, for example, told a recent industry summit organized by the Indian Institute of Packaging that plastic pouches and other small containers were playing a big role in reaching new consumers.
But he and others at the seminar warned about environmental concerns putting the brakes on full market expansion
R.S. Sodhi, managing director of the Gujarat Cooperative Milk Marketing Federation, told the New Delhi industry meeting that plastic pouches are a game changer in expanding milk markets.
"The availability of dairy products in smaller and affordable packs changes the whole market dynamics with product penetration reaching deeper in to lower middle class and rural areas of the country," he said.
He said GCMMF dairy products selling under one particular brand name, Amul, are targeting doubling sales to 50,000 crore Indian rupees ($7.75 billion) by 2020, from the current 23,000 crore ($3.56 billion) in 2016, with an annual growth of 20 percent.
Packaging is helping with that growth.
"The packaging industry should focus on this segment to bring innovative and affordable packaging solutions for lower middle class and rural masses, as growth potential in the segment is unimaginable," he said.
He noted that per capita packaging consumption in India is about 4.3 kilograms a person, or about one-tenth that of developed countries.
But he cautioned against India shooting for those developed nation targets in packaging consumption without more recycling infrastructure.
"I don't think we should aim for meeting those targets as that also requires huge recycling infrastructure to support," Sodhi said.
Other speakers, including Rajeev Kapoor, secretary of India's Department of Chemicals and Petrochemicals, made a similar link between recycling, waste and limits on growth.
"Continued negativity [as it] relates to plastic will hurt the growth of packaging industry and voices are raised against plastics at various forums and policy making is influenced by various pressure groups," he said. "We have to improve technology, educate people to remove the negativity tag and to ensure plastic is collected and recycled, besides developing recycling as workable business model."
Kapoor agreed that packaging in smaller units is allowing fast-moving consumer goods companies in India to expand their markets to more rural areas.
"Hitherto, FMCG's had limited markets confined to major cities, [but] improved functionality through flexible packaging bringing small and affordable packaging options, leads them to penetrate deeper in to the Indian market," he said.
Kapoor suggested the industry should work on improving barrier properties to increase shelf life and reduce food waste.