1India Packaging Show 2006India Packaging Show 2006
Modern Packaging Trends in
Retail & Supply Chain Management
Pradeep Sardana
PepsiCo India
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What is Packaging?
Techno-economic function aimed at minimizing cost
of delivery while driving sales & profits
Art, science & technology of preparing goods
for Market and sale
Means of - Product handling- Product integrity- Brand presentation
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Trends impacting Packaging•Consumer choice•Environmental pressures
–Recycling –Statutory Declarations
•Technology improvements–Materials–Security features–Processes
•Retail needs–Unique SKUs,Bundling–Bar coding–RFID
Consumer
Retail
Packaging
Supply Chain
Consumer
Retail
Packaging
Supply Chain
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Consumer
Retail
Packaging
Supply Chain
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Consumer
Retail
Packaging
Supply Chain
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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
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Consumer
Retail
Packaging
Supply Chain
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Consumer
Retail
Packaging
Supply Chain
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Macro environmentGlobalisation
− 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
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Use of environment friendly materials • Build industry standards • Maharashtra govt bans poly bags < 50 microns • Global retailers demanding Non –PVC shrink
sleeves
Promote recycling strategiesForced standards by customers/govt agencies and
organized retailersEnsure Product security
Social Responsibility
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Consumer
Retail
Packaging
Supply Chain
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Consumer
Retail
Packaging
Supply Chain
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– 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
Industry driven
Distributor controls
Consumer driven
Retailer controls
Consumer dictates
US
UK
Germany
Japan
HK
Singapore
Taiwan
Indonesia
Philippines
China
India
Retail Power
Indian Retail Landscape
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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
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Consumer
Retail
Packaging
Supply Chain
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Consumer
Retail
Packaging
Supply Chain
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− 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
Supply Chain
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Consumer
Retail
Packaging
Supply Chain
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Consumer
Retail
Packaging
Supply Chain
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– 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
Packaging & Consumers
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Packaging & Retail
• Developing multi pick-up & drive POP with bundled packs
• Retail shelf friendly
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• Built-in POP though packaging • Create billboards using pack orientation • Run promotions on packaging • Electronic advertising budgets: POP
offers alternate media
Packaging as a Marketing Tool
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Packaging as a Supply Chain tool
Laminate, Rigids,Cartons . Retail pack Dist. Pack
Pallet Load
15 - 24 kg2– 4 kg
1000 kg
Organized retail route
Integrated Pack Model
In – plant storage only Primary & secondary routes
Retailer pack Operation
Primary route Secondary route Consumer packTactical
Secondary routeXPromotions Strategic
In – plant storage only Primary & secondary routes
Retailer pack Operation
Primary route Secondary route Consumer packTactical
Secondary routeXPromotions Strategic
- 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
Palletization – cost vs value creatorKey supply chain cost optimizer through an Integrated supply chain approach• Drive standards – pallets/trucks
• Pallet pooling services
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Palletization Roadmap
Pallet • Pallet standardization• Pallet pooling • Pallet tracking & visibility
Trucks/ Container
• Side Vs Back Open • Platform quality & bed height • Utilization review• Terminal automations
• Fork lift/hand trolleys• Dock levelers/scissor lifts• Storage systems • Logistics Terminal automations
BOM• Focus on 80/20• Utilization levels • Optimize the secondary
Turnarounds
Handling facilities
Logistics Model
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Journey to Organized Retail
LSP group level
Retail group level
Mfg group level
Retail pack level
Primary pack level
Tubes Flexibles
Rigids
Taping Banding Sleeves
Strapping
Hi – Cone
Stretch sleeves Stretch banders
Shrink Carton
Blister Packs