|| ECO-FRIENDLY "TINPLATE PACKAGING" FOR CONSUMER CONVENIENCE ||
|| Packaging: The key driver to catapult growth of processed food - Abstract ||
|| Packaging: The key driver to catapult growth of processed food - Conclusion ||

Packaging: The key driver to catapult growth of processed food
(Paper by M/s Parvez Khan, Tarun Daga & R Battish of Tata Tinplate)

Abstract

• India has the right credentials to be "Food factory to the World". The country is leading producer of food in the world second only to China. Apart from being self sufficient in grains production, India is the second largest producer of fruits and vegetables in the world, the largest milk producing country and with marine sources comprising more than 8000 kilometers coastline. Yet it is yet to harness this potential. Currently, about 20-25% of fruits and vegetables are lost due to spoilage at various post harvesting stages. Only 2-4% of India's production is commercially processed. For example, India is the largest producer of mango (59% of world production) but contributes only 13.55% of world mango export.

• The food sector probably is the single largest user of packaging, be it in types, forms and varieties. Anywhere between 45 - 60 % of the packaging consumed is by the food sector, the world over Packaging Industry is preparing itself to meet the growing demands of Food Processors. In order to support the marketing strategies, the packaging industry is adapting to changing needs of consumers viz health and hygiene, consumer convenience.

• Indian Metal packaging Industry viz " Tinplate " has taken proactive steps by bringing all the players in the value chain viz Steel producers Tinplate manufacturers, Can fabricators and Fillers under the aegis of TPC i.e. Tinplate Promotion Council which is trying to promote eco-friendly,WTO compliant, cost effective,consumer convenient packaging solutions to meet the growing requirements of the discerning consumers in India & Worldwide with good initial success. In order to celebrate innovation, TPC hosted an Awards Night concurrently with PACK on 2003 and FoodprO 2003, to recognize the efforts of innovative solution providers and also later hosted the World packaging awards in association with Indian Institute of packaging in Mumbai during October 2004.

• The need of the hour is for a conducive environment wherein all players viz food processors, packaging industry, fillers, exporters and Catalysts viz FIs/ Govt/ Research Institutes put its act together to harness this potential . Government of India has unveiled number of fiscal incentives to encourage commercialization and value addition to agricultural produce. All players need to partner together to catapult the growth of processed food in India both for domestic consumption and exports.

Introduction

Indian food processing is yet to fulfill its promise. The country is leading producer of raw material in the world, but figures among the laggards in food processing. Some well known facts need a re-iteration at this point:

• India is the world's second largest producer of food next to China, and has the potential of being the biggest in the world. Apart from being self sufficient in grains production, India is the second largest producer of fruits and vegetables in the world, the largest milk producing country and with marine sources comprising more than 8000 kms coastline.

• Currently, about 20-25% of fruits and vegetables are lost due to spoilage at various post harvesting stages. Only 2-4% of production is commercially processed. For example, India is the largest producer of mango (59% of world production) but contributes only 13.55% of world mango export. Total 2.35% mangoes produced in India are processed. Hence, potential is tremendous. Already, signs of leveraging such opportunities are visible.

• The fruit production in India has recorded a growth of 3.9% whereas the fruit processing sector has grown by 20% p.a. Processing of vegetables is also expected to increase from 2% levels to about 10% in next 10 years.

A combination of socio-economic and cultural factors has held back the development of food processing sector. According to Ministry of food processing Industries, the size of the food processing industry is about Rs315,000 crores, and includes Rs 99,000 crore of value added products. The gross domestic product of India is poised for a growth of 6 to 7 percent in 04-05 while food processing industry is expected to clock a growth of 9-12 per cent.

The food processing sector in India has been accorded a very high priority by the Government of India with a number of fiscal incentives to encourage commercialization and value addition to agricultural produce. In fact, the government has even gone as far as advertising, for promoting consumption of processed food amongst the public in national newspapers. It also announced five year tax holiday for new units in fruits and vegetable processing along with other benefits in budget 2004-05.

A recent draft report prepared by Rabo India Finance mentions that India's processed food industry will jump 117% to Rs 11,500 billion by 2014-15 from Rs 5,300 billion in 203-04. The figure can be achieved if an investment of 676 billion is pumped into the industry

Leave aside India, it is estimated that as much as 50% of the food in the developing world is spoiled due to lack of effective packaging. In comparison, in some of the major fruit and vegetable producing countries such as USA, Brazil, Malaysia over 65% of the produce is commercially processed. The difference is more than 180 degrees!!!!

The food processing industry will provide a fillip to India's growth. The point is further reinforced when we note that despite the value addition in the food sector being only 7% today, food is the highest economic multiplier in the Indian Industries, estimated at 2.4 times. Compare this with other value additions: China (23%), Phillipines (45%) and UK (88%).

Exports

Indian processed foods are fast becoming the favour of the season in developed markets. Besides the huge Indian Diaspora all over the world, even the persons of Non Indian Origin have started relishing Indian Foods ad fruits. The demand is coming from Europe, especially United Kingdom and Middle East. The items in demand include pickles, chutneys, fruit pulps, canned fruits and vegetables, concentrated pulps and juices, dehydrated vegetables, frozen fruits and vegetables, meat and marine products. This is a definitely a good sign for Indian food Industry.

The total exports of the food processing industry touched Rs 17,600 crores in 2002-03, whereas it became 53,000 cores in 2003-04. This is no doubt a drastic changed of exports in processed food segment. It meant an increase of about 3 times more than the previous year.

The export of fruit and vegetables products is growing is about 15% and preserved food has gone double in 5 year. The ministry of food processing industries, Government of India, has been assigned the duty of carrying out pre-shipment inspection agency under the export Inspection act. However some of the categories of the exporters such as recognized export houses and trading houses have been exempted from pre-shipment inspection.

Marine products have created a sensation in the world market because of their high health attributes. With the high unit value, seafood has been acclaimed as one of the fastest moving commodity in the world market. The world market for seafood has doubled within the last decade reaching US $49.32 billion mark India's share is 2.4%, dependence on shrimp as a product and is changing due to the increased attention given on other fishery resource like squid, cuttlefish, fin fish, etc. and penetrating into markets of Western Europe and South East Asia.

Export of marine products was the single largest constituent of the total exports of processed foods, contributing about 40 per cent. The performance of Indian seafood exports in 2003-04 was not on the expected lines. There was a declining trend in exports due to the adverse market situation prevailing in the major markets like USA, Japan and European Union. While the anti dumping procedure initiated by the US government affected the Indian shrimp export to USA from the month of February 2004, the antibiotic residue in samples drawn from the consignment sent to Europe and the Japanese buyer's concern on muddy and mouldy smell in farmed shrimp resulted lesser intake of goods from India. Added to this production of fish from capture sources was also down last year.

Rice exports which have had been declining in the recent years picked up in 2003, and accounted for 33 per cent of total export. Here again packaging, branding, marketing and strict control on Quality maintaining a premium image of Indian rice has helped to grow the market.

Packaging - The key driver

The food sector probably is the single largest user of packaging, be it in types, forms and varieties. Anywhere between 45 - 60 % of the packaging consumed is by the food sector, the world over. Rightly said, the packaging and food sectors are complimentary to each other - in fact, the packaging industry has a very significant role to play as a support for the "Food Factory of the World".

From being primarily exporters of commodities, it is time we move up the value chain and become a global player for processed food since we are fortunate to be blessed with considerable natural resources. The industry needs to formulate a plan of action to convert these into products of international standards and enhance their acceptability. The significance and contribution of packaging - in product distribution and marketing cannot be undermined. It is important to realize that invariably it is the package that the distributor, a retailer or for that matter the consumer sees first and not the product. The first impression about the product is always created by the package. Packaging has become synonymous with the products - for example, when we think of a drink, our immediate recall is of the container / label used for the product. Packaging is therefore the heart of any marketing strategy.

In order to support the marketing strategies, the packaging industry needs to consider the changing needs of consumers living in a society where convenience and choice are commonplace. Technological advances are the order of the day, often impatiently awaited. To meet growing consumer expectations and environmental challenges, the packaging industry needs to usher in new technologies and innovative approaches. The issue of convenience needs stressing here arising out of demographic changes: more single person households, more working women, nuclear families, growing aged population and sophistication of eating habits.

The packaging industry has an opportunity in hand but also needs to play the role of good corporate citizen and needs to perform the role of an educationist for the public at large. Specially when it comes to export, where packaging needs to conform to the stringent packaging laws of US (Country of origin law, Bio terrorism act) EU (packaging and waste management laws) etc, not only quality of packaging but its eco friendliness and reclyclability also gain importance.

Whilst a host packaging alternatives are available - name it, glass, metal - aluminium or tinplate, paper & board, Tetrapak, plastics, PET, etc, the selection of packaging material depends on its ability to render itself to consumer convenience, cost effectiveness and environment friendliness.

In line with the incentives being offered by the government for food processing, it will be imperative to provide similar incentives to the packaging industry to ensure effective promotion of WTO compliant, yet cost effective solutions for export of food. To reiterate, food and the packaging are inseparable.

But the fact is, the product and package compatibility is the main factor in the case of food. America has already alerted to Indian exporters for the use of better packaging material for the processed food last year. A recent news item published in Times of India (23rd Feb'05) has warned consumers about contaminant of food in inferior packaged condition, causing cancer, kidney damage, etc. It is the responsibility of food processors and packagers to ensure filling only in suitable packaging material which ensures health and hygiene. While in India there is still a lack of awareness on this count, it will become mandatory when GOI releases its new Food Safety and Standards Bill 2005 as an "Integrated Food Law" which has been prepared with the intention to be contemporary, comprehensive, and ensure better consumer safety through food safety management systems and setting standards based on science and transparency as also meeting the dynamic requirements of international trade and Indian Food Trade and Industry. All packaging materials would have to necessarily meet these requirements and hence players are advised to take preemptive steps to do so.

Coming from the position where I am, tinplate as a packaging medium scores excellent on all three attributes, especially when we consider the life-cycle cost of the product / media. Its property of re-cyclability has ensured that tinplate occupies niche position for food packaging, especially in the developed world, with approx. 70% of retorted processed food being packed in tinplate. Tinplate provides excellent barrier properties, strength and formability, amenability for excellent printing and graphics, retorting, providing long shelf life to the product and above all eco-friendliness. Even in terms of cost effectiveness, considerable progress has been registered through light-weighting and lower coating of the media - in fact, over 35% weight reduction has taken place over the last 30 years for similar usages.

Despite such credentials, tinplate accounts for just 5% of the total packaging material used in the country as compared to 11% in the developed world. Looking at the data in another manner, India's per capita consumption is at 0.3 kg whereas countries like China are at 1 kg and of course the developed world at around 10-15 kg.

It is for this purpose that we in the tinplate industry have created a forum of steel & tinplate producers, can makers & now fillers i.e. the "Tinplate Promotion Council". It has been formed with the objective to promote the usage of tinplate in the country based on its various technical, environmental and economical facets. TPC is focused on product, development, marketing aspects of tinplate manufacture and usage as well as perform its role of educating the public at large. TPC has been in close interaction with the Indian Institute of Packaging, which, as a national body has tremendous potential to promote the requisite packaging medium and create awareness amongst consumers on the specific packaging requirements of different commodities. TPC also organized the first ever International Seminar on Tinplate in India and is now focusing on consumer convenience and packaging solutions especially for the food industry. In order to celebrate innovation, TPC hosted an Awards Night concurrently with PACK on 2003 and FoodprO 2003, to recognize the efforts of innovative solution providers. The efforts are paying dividends and there has been an increase in "tinplate" based packaging solutions in the country for example even though the industry has ensured a higher availability of indigenous tinplate" in domestic market by 10-12%, the imports have also increased . The industry is gearing itself by planning for growth to meet higher requirements of the growing processed food market.

Conclusion

In conclusion, the relevance of packaging as a key driver to catapult growth of processed food in India cannot be under estimated. India with enviable wealth of resources of fruits and vegetables, dairy, marine and agricultural products is set to emerge as a global leader in the processed food business, given of course the right direction and inputs. The government too has recognized this potential and is pro-actively prioritizing the food processing industry for growth. The success of this industry, besides other factors, depends largely on packaging. Global marketing of our food products will to a large extent depend on our ability to deliver these products in packaging forms that will not only ensure freshness of the edibles but also meet consumer convenience. It will be necessary to ensure that all packaged food for exports complies with various environmental laws of the importing countries.

If all the stake holders and players viz Food, Fruits, vegetable, marine products producers, Food Processors, Packaging manufacturers partner together synergistically and leverage on the huge incentives unveiled by the Government, there is no reason why India can not claim its rightful position in the World Food Arena that is the FIRST rank and be the "Food Factory to the World."