Modern Packaging Trends

in
Retail & Supply Chain Management

Pradeep Sardana

PepsiCo India

India Packaging Show 2006 1

 What is Packaging?
Means of
- Product handling
- Product integrity
- Brand presentation

Art, science & technology of

preparing goods
for Market and sale

Techno-economic function
aimed at minimizing cost
of delivery while
driving sales & profits

India Packaging Show 2006 2

 Trends impacting Packaging
•Consumer choice
•Environmental pressures
Consumer –Recycling
–Statutory Declarations
•Technology improvements
Packaging
–Materials
–Security features
Retail –Processes
•Retail needs
Supply Chain –Unique SKUs,Bundling
–Bar coding
–RFID

India Packaging Show 2006 3

 Consumer

Packaging
`

Retail

Supply Chain

India Packaging Show 2006 4

 Consumer
Changing demographics
− Younger earning population
− Brand conscious
− 54% below 25 years
− 81% population below 45 years
− More acceptance of new concepts
− Changing aspirations
More nuclear families with dual income
─ 75 million households, called ‘consuming classes’ with annual income
between 50000 to 3 lacs
─ 1 Million Households in creamy layer with income at par with International
─ Higher disposable income and easier financing options
─ Convenience overriding price consideration
Lifestyle values
− Global lifestyle: media exposure and overseas travel
− Look at me (LAM) the most important criteria

India Packaging Show 2006 5

 Consumer

Packaging
`

Retail

Supply Chain

India Packaging Show 2006 6

 Macro environment
Globalisation
− Entry of leading Indian & global retail brands
− Retail format consolidation/customization in India

Financial institutions upbeat on the sector

− Several Indian & international FIs setting up specialized
division for retail funding
− Easy availability of credit
− Investments in retail infrastructure

Government support
– Infrastructure development
– Policies favouring growth
– Tax and duty structure rationalization (VAT)
– FDI policy

India Packaging Show 2006 7

 Social Responsibility

Use of environment friendly materials

• Build industry standards
• Maharashtra govt bans poly bags < 50 microns
• Global retailers demanding Non –PVC shrink
sleeves

Promote recycling strategies

Forced standards by customers/govt agencies and
organized retailers
Ensure Product security

India Packaging Show 2006 8

 Consumer

Packaging
`

Retail

Supply Chain

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 Indian Retail Landscape
– India moving at a fast pace towards consumer driven
economy
– Demand for competitive goods & services by Indian
consumers like global counterparts
– Organized retail can be a major driver of economy
– Can attract large FDI and FII investments
HK

Singapore Japan

Taiwan

Germany
Indonesia

Retail Power
Philippines UK

China
US

India

Industry Distributor Retailer Consumer Consumer

driven controls controls driven dictates

India Packaging Show 2006 10

 Indian Retail Landscape

– Total retail market: Rs 1,000,000 crore

($235 billion)

– 12 million + outlets, only 4% > 500 sq.ft

– Modern Trade: Rs 30,000 crore ($7 billion)

with a Share of : 3%

– Modern trade by 2010 : 10% of retail

market – 100,000 Cr

India Packaging Show 2006 11

 Consumer

Packaging
`

Retail

Supply Chain

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 Supply Chain

− High growth rate of modern trade – 30% plus

− Share of organized retail 15%+ for top 10 markets
− Share of modern trade as high as 60-70% for
packaged food categories for top 10 mkts
− Supply chain clusters close to top 10 mkts
− Retail format consolidation in India
− VAT & supply chain implications
− Local availability of cheap technology resources

India Packaging Show 2006 13

 Consumer

Packaging
`

Retail

Supply Chain

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 Packaging & Consumers

– Convenience
– Buying decisions within fraction of a second
– Modern trade ambience offers “ Touch & Feel ”
– Multipacks - Value creator to all stake holders
– Addresses the usage cycle demands:
• Easy to handle
• Easy to store
• Easy to consume
• Easy to dispose

• Packaging A Key differentiator

India Packaging Show 2006 15

 Packaging & Retail

• Developing multi pick-up & drive POP with bundled

packs
• Retail shelf friendly

India Packaging Show 2006 16

 Packaging as a Marketing Tool

• Built-in POP though packaging

• Create billboards using pack orientation
• Run promotions on packaging
• Electronic advertising budgets: POP
offers alternate media

India Packaging Show 2006 17

 Packaging as a Supply Chain tool
- GS – 1 standards (bar codes)
- RFID tags for real-time stock replenishments
- Commercial Security offerings
• Counterfeit & pilferage
• Online supply chain visibility across the chain
• Pack safety for the consumer

Integrated Pack Model

Pallet Load Palletization – cost vs value
creator
Organized retail route
Key supply chain cost optimizer
1000 kg through an Integrated supply chain
15 - 24
approach
2– 4 kg
kg

Laminate,
Rigids,Cartons .
Retail pack Dist. Pack • Drive standards – pallets/trucks

Strategic Promotions X Secondary route • Pallet pooling services

Tactical Consumer pack Secondary route Primary route

Operation Retailer pack Primary & In – plant storage only

secondary routes

India Packaging Show 2006 18

Palletization Roadmap

Logistics Turnarounds
Model

• Focus on 80/20
BOM • Utilization levels
• Optimize the secondary

• Fork lift/hand trolleys

Handling • Dock levelers/scissor lifts
• Storage systems
facilities • Logistics Terminal automations

• Side Vs Back Open

Trucks/ • Platform quality & bed height
• Utilization review
Container
• Terminal automations

• Pallet standardization
Pallet • Pallet pooling
• Pallet tracking & visibility

India Packaging Show 2006 19

 Journey to Organized Retail

Taping Stretch sleeves

Banding Stretch banders
LSP group level Retail Sleeves Shrink
pack level Strapping
Carton
Hi – Cone Blister Packs

Retail group
level
Tubes
Flexibles
Primary
Rigids
Mfg group level pack level

India Packaging Show 2006 20

 Thank You!

India Packaging Show 2006 21