Over the years, the print and packaging industries together have grown tremendously with the inception of exponential technologies. While these two sectors are interlinked, such trends as e-commerce and digital printing have made a shift to another paradigm. It has been said that since 1989, growth of the printing industry coupled with the packaging industry is more than 14 per cent. In conversation with SMEFutures, S. Dayaker Reddy, President of Indian Printing, Packaging and Allied Machinery Manufacturers’ Association (IPAMA), talks about the various aspects of both these industries along with connected packaging, which is the future of this sector and which will impact brands and consumer behaviour at large.
How has the print and packaging sector evolved?
The Indian print industry has undergone a progressive change in the last 15 to 20 years, and it has witnessed healthy growth in the past five years. This transformation has happened due to investments in the latest technology and machinery. The printing manufacturers sector alone registered a growth of not less than 20 per cent in the past five years.
As recorded, the Indian printing industry is growing at an annual rate of 12 per cent, which comprises more than 2,50,000 small, medium and big printing companies. There are more than 36 printing institutes in India, of which some are giving post-graduate education. Every year, around 3,500 new printing graduates are joining the print industry.
If we talk about the packaging Industry, it is currently growing at a rate of more than 16 per cent per year, which is playing a crucial role and adding value to various manufacturing sectors like agriculture, pharma, retail, FMCG and so on. Basically, the packaging industry in India has been growing due to solid demand from food and pharma sectors.
As per industry data, the paper packaging market contributes more than 30 per cent to the overall packaging market share and dominates other packaging domains. The demand for sustainable packaging made of paper, jute, cloth and even plants is also increasing around the country. The Indian packaging industry has registered a robust CAGR of 15 per cent in the last five years, and it is projected to achieve an annual turnover of US$ 32 billion by 2025.
What are the latest trends that you are seeing in the segment, and how it is changing the business scenario?
In my opinion, the latest or newest trend in the printing industry is in terms of acquiring the latest and the best equipment and machines. The progressive printers are equipped with the latest computer-controlled printing machines, which are being used in pre-press and other formats. Leading print companies have optimised the use of information technology in each area of their business. Indian printers are today equipped at par with the best print production facilities in the world.
While the packaging industry, which employs about five million people directly and three times more indirectly, will continue to grow due to rapid changes being undertaken by the industry players. We are already seeing organised retail and e-commerce boom, which offers a huge potential for future growth of retailing and will continue to support the packaging industry.
Meanwhile, the food safety and packaging norms are getting stricter, and this is expected to promote the use of good-quality packaging. Also, affordability, small urbanised household size and time compression are expected to give way to the packaged food category.
The Indian government’s aim to make India a global manufacturing hub will have a positive impact on the growth of the packaging industry. The increased presence of global multinational companies, consumer brand awareness and products with clean-label messaging will augur well for the industry. As I have already explained above, the newest trend in these segments will have a positive impact on businesses.
How do consumer perspectives and preferences impact the print and packaging industries?
Consumers’ perspective is imperative to us. Printing and packaging are two distinct parts of a marketing plan for selling products. Consumer perspectives and preferences have a direct impact on these segments of the graphic arts industry. A product’s print packaging reflects its brand image, which is very critical in retail sales where the right packaging and design can attract the consumer’s eye.
The colour and design in print packaging is also an important factor, which determines shopping behaviours and preferences of the consumers. Colours are used to attract attention but they should be taken in the context of the product’s marketing goals. For instance, while children’s cereal packaging will have bright colours that attract their eyes, health-focused cereals will have more whites.
Today, in the modern society, customers associate a brand’s image by looking at its packaging. Technology products often come in unique packaging to reinforce the image of innovation that the company’s brand aims to project. Beverages may have unique bottle designs, while the packaging for a food product could feature a design that makes it easier to eat. Similar types of products will often adopt similar packaging colours, designs and printing styles.
Likewise, secure packaging, creative design and the like will reinforce consumers’ feelings about the product. The graphics on packaging can convey messages or evoke feelings in them based on the images and colours used. Different shades of blue colour are considered cool and relaxing, while reds, oranges and yellows are seen as hot or exciting. Because poor product packaging could create feelings of distrust in consumers, manufacturers and printers should avoid such mistakes.
Today the market is moving towards connected packaging. How are the Indian print and packaging sectors engaged with interactive packaging, intelligent packaging and active packaging?
Yes, it is a fact that the market is moving towards connected packaging! Interactive print refers to the ability to connect all types of printed materials to online content. While this type of packaging refers to packaging that is connected to digital content, both of these sectors are interlinked.
Also, interactive packaging often refers to designs that promote physical interaction. Cleverly-designed packages can be reused as board games, battery testers, mini chalkboards, clothes hangers or placemats, among others.
Intelligent packaging uses sensors to send and receive information between the packaging and the consumer. Radio-frequency identification (RFID) sensors can communicate the information over a distance; whereas, Near Field Communication (NFC) sensors allow wireless short-range communication that is used to make smart labels for loss prevention, time and temperature, tracking of food shipments and linking to e-commerce websites, etc.
Active packaging uses advanced forms of barcodes that allow customers to engage with the content controlled by the brand. It also provides functions beyond product protection and identification.
The demand for active packaging in India is being driven by the desire to keep the food fresher for longer periods, to reduce food waste and to promote more convenient packaging for consumers. Although, it is more mature and has slower growth predictions as compared to intelligent packaging, there are substantial development opportunities for active packaging technologies in the market.
Intelligent packaging is a dynamic and potentially high-growth market with developments in printed electronics, micro-sensors, authentication platforms and the Internet of Things (IoT) driving the adoption of new technologies. It is at a developmental stage of the product’s lifecycle not only in India but across the globe.
However, Tetra Pak, a well-known processor and packaging brand, has introduced smart packaging in India. The company will soon develop dynamic QR codes with PICCO printing technology. Tetra Pak is building the ecosystem in-house, from developing the QR codes to designing the related apps as well as helping brands to gain deeper consumer insights through analytics. Their facility is at Chakan near Pune.
What are the opportunities for growing in the sector, especially for small and medium business players?
As I have already mentioned before, the printing industry is growing at an annual rate of 12 per cent, which comprises more than 2,50,000 small, medium and big printing companies. While the packaging sector is growing at an annual rate of 16 per cent. Both small and medium enterprises in the print and packaging sectors have considerable growth opportunities. As far as government initiatives are concerned, these two sectors are getting encouragement as far as product promotion is concerned. These sub-sectors are also getting subsidies and financial assistance through government agencies like National Small Industries Corporation (NSIC), Export Promotion Councils, Development Commissioner Ministry of Micro, Small & Medium Enterprises (DCMSME) and Ministry of MSME.
Do you think the government’s eco-friendly campaigns such as plastic bans have an adverse effect on the printing industry? What needs to be done, in your opinion?
Yes, in my opinion, such sectors as pharmaceutical and FMCG packaging industries are relying heavily on plastic packaging, which has triggered discussions.
As per the ASSOCHAM-EY’s report, increased focus on urbanisation and industrialisation has led to an increase in plastic consumption. In 2017, per capital plastic consumption was 11 kilograms. The percentage of plastic and rubber in municipal solid waste (MSW) has risen to 9.22 per cent as compared to 0.66 per cent in 1996, as per the Central Pollution Control Board (CPCB) data. It is estimated that by 2031, plastic waste generation will amount to 31.4 million tons per year.
Today, the total demand for plastic in the economic cycle across industry sectors (packaging, building and construction, transport, electronics, agriculture, etc) is 20 MMT (million metric tons). Out of the total demand, 15 MMT is being fulfilled by virgin plastic and the remaining 5 MMT is coming from recycled plastic, which is about 30 per cent of the total consumption.
Approximately, 45 per cent of the 20 MMT of plastic, which is 9.6 MMT, is immediately consumed and released as waste, while the rest 55 per cent, which is close to 11.4 MMT, is the growing stock that is used for a longer span of time products like batteries, bottles, etc. Here I need to mention that approximately 90 per cent of the plastic waste ends up in the oceans, and the biggest problem is that plastic takes several years before it bio-degrades. However, the industry is adopting alternative products for use in printing and packaging segments, which can curb the plastic waste problem.
What are the major roadblocks that the print and packaging players are facing in today’s market scenario? What are their major demands?
In India, most of the printing, packaging and printing machinery manufacturers are in micro, small and medium sectors and, thus, cannot import latest technology on their own without financial assistance from the concerned institutions. Most of the units are also not able to set up their own research and innovation establishments for developing the latest technology, which is a must in these modern days to remain in competition in the global market. It is an accepted fact that technological upgradation is a continuing process. But due to lack of funds in the market, MSMEs are lagging behind.
Another roadblock is that foreign companies are least interested to invest in small and medium enterprises, and this has a direct or indirect impact on their growth. IPAMA feels that the government agencies should simplify the existing rules and regulations so that the small and medium enterprises can import the latest technology on easy terms and conditions. The government should also provide financial assistance to such units for setting up R&I units. It should also upgrade the infrastructural facilities.
How is IPAMA contributing to the growth of print and packaging sectors?
IPAMA has taken a number of initiatives for the growth of the Indian print and packaging segments. Our association is promoting these sectors of the Indian graphic arts industry through various modes such as participation in international exhibitions, seminars and conferences with a view to explore new markets for Indian products across the globe.
IPAMA is also organising Print-Pack India, a biennial international exhibition for promoting Indian products, and is also arranging financial assistance for its members under various schemes set up by the central government.