Rural income growth and high inflation continues to drive the demand for smaller packs
India continued to witness high growth in rural income in 2011. Rural income growth coupled with high inflation during most of the year put the focus back on smaller packs being offered at lower price points. With income rising in rural areas, marketers also looked to tap this segment and increasingly came out with flexible packs that were meant for one-time consumption targeted at rural households. That trend was more relevant for personal care product categories such as shampoo, sun care, etc which continued to witness a large uptake of sachets in the Indian market. The higher inflation also forced the marketers to come out with smaller packs even in urban areas, as prices were rising for most of the commodities and people looked for products at lower price points.
Increasing use of metal packaging due to lifestyle changes
With the high growth in per capita income in metro areas and increasing number of working woman, the demand for metal packaging is growing, too. Metal food cans are able to keep food/beverages fresh for a longer time without refrigeration and this helped in its adoption in the Indian market. Demand for metal beverage cans have also grown due to changing lifestyles amongst Indian youth who are increasingly looking to adopt more functional pack solutions and are willing to pay more for it. Demand for metal aerosol cans, often higher margin products in the beauty and personal care industry, grew due to growing demand from brand owners.
Demand for rigid plastics remains strong
Despite the increased focus on the environment, overall demand for rigid plastics remained strong in the Indian market in 2011. Rigid plastics were growing for all the packaged consumer goods categories due to its easy availability, user friendliness, adaptability and non breakability. Demand for PET bottles continued to grow for beverages (soft drinks) whereas HDPE bottles were growing fast for home care and personal and beauty care product categories. Newer rigid plastic packs such as thin-walled plastic containers were also growing due to growth in organised retailing chains and demand from newer food product categories. Growth in demand for thin-walled plastic containers were helping local suppliers and presenting newer opportunities in the packaging market in India.
Ban on sachets for tobacco products adversely affects demand for flexible packs
The Supreme Court ban on use of flexible packaging (sachets) in early 2011 for tobacco products had a major adverse effect on overall demand for flexible plastic. The ban overnight was a big threat to survival of small local sachets/pouch suppliers as they did not have resources to come out with alternate solutions in the swiftly changed realities of the market. On the other hand, the bigger players such as Uflex stood to benefit as they were quickly able to come out with different alternate solutions to flexible packs. The ban on sachets also pushed the cost of packaging up as alternate types of packs such as flexible aluminium paper were more costly and could not be adopted at a large scale for cheaper tobacco products. The ban also increased the focus on bigger pack sizes as marketers looked to optimise their size mix in order to reduce their overall packaging costs.
Demand grows for closures with functionality
The market showed a preference towards adopting functionality in their packs in order to provide customers with the most convenient usage and dispensation of the products. This helped the growth of closures that had functionality such as plastic dispensing closures as a replacement for the more standard plastic screw variety. The trend was particularly evident for home care packs where marketers were looking to provide customers with higher ease of use.
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Discover the latest market trends and uncover sources of future market growth for the Packaging industry in India with research from Euromonitor's team of in-country analysts.
Find hidden opportunities in the most current research data available, understand competitive threats with our detailed market analysis, and plan your corporate strategy with our expert qualitative analysis and growth projections.
If you're in the Packaging industry in India, our research will save you time and money while empowering you to make informed, profitable decisions.
The Packaging in India market research report includes:
- Analysis of key supply-side and demand trends
- Detailed segmentation of international and local products
- Historic volumes and values, company and brand market shares
- Five year forecasts of market trends and market growth
- Robust and transparent market research methodology, conducted in-country
Our market research reports answer questions such as:
- What is the retail unit volume of the packaging market in India?
- What are the major pack types and how are they performing in India?
- Have there been any packaging legislative changes over the past 12 months?
- How has the packaging industry been affected by the recession?
- How are consumption trends impacting the packaging landscape?
- What have been the key trends seen in new packaging developments?
- How important is sustainability in packaging to consumers in India?
Why buy this report?
- Gain competitive intelligence about market leaders
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This industry report originates from Passport, our Packaging market research database.