Converters have traditionally been the main source for the product manufacturer to ensure that the product quality and image get forcefully converted into sales through means of packaging. More so, the onus of introducing packaging innovations like enhanced security features, graphic aesthetics and package design, have all been a dimension of the converters' domain. Yet another significant feature about packaging converters that has received little attention is that, most of the time, the converters serve as the sole intermediary between the user and the supplier group. This vital link has helped in several ways. For instance, it has mitigated packaging requirements, increased consumer awareness and served as a catalyst in increasing efficiency in packaging, being the early adopter of technological innovation.
Industry andproduction
There are over 15,000 units in the converters segment of the packaging industry and mostly operates on a small to medium scale. Among these, only 10% of the units are in the organised sector and the rest of the industry operates in the small and unorganised segment. The investments in the sector are estimated at Rs 20 bn and are expected to increase in the future on the back of foreign participation.
Converters imperative
The packaging converters sector has a latent need for researched and substantiated information about the sector and its environment. This reflects in the fact that the industry saw a major investment boom following the liberalisation of the Indian economy in the 1994-96 phase. During this phase, the industry grew at a staggering rate of 40%. However, the immediate slowdown in the economy post 1996, saw many major industry players being marginalized. This accentuated the need for real-time and analysed market information pertaining to factors that influence the converters segment.
Converters have increasingly felt the need for obtaining comprehensive information about the proposals offered to them by substrate manufacturers and suppliers. The sales representative of the supplier plays a significant role in this regard. The agent acts as a medium for accumulating and dispensing market information to converters. For instance, converters look for help from the suppliers' sales and technical force to reduce their process and material handling time. Some of the areas where the converters and suppliers can converge for mutual benefitsare redesigning of packaging forms; addressing security concerns and providing alternatives for packaging materials such as tape, filler and labels. The knowledge disseminated through this channel will act as an effective input into developing new product lines.
Technology usage
The use of packaging substrate has undergone many changes and various trends have re-emerged after periodic phases of gloom. For instance, the current trends favour more traditional and eco-friendly packaging materials instead of synthetic substrates like plastics. Equally, the consumer demand for convenience has been increasing, leading to numerous innovations in the substrates. These factors have resulted in the emergence of new technologies in packaging and printing. Technologies like horizontal and vertical form seal machines, blister packaging and cartooning machines, form-fill-seal machines for flat-top-and-bottom models, bag-in-box systems, sterilisation and filling technologies for vials and ampoules, and filling and sealing of metal containers, have displayed immense growth and potential. The highlight of the current level of sophistication in packaging technologies is that practically the entire gamut of products can be packaged as per the consumer needs.
Converters working for the retail segment are increasingly using 'track-and-trace' technologies such as source tagging, to protect products from possible shoplifters. Source tagging is a technique of applying thin RF (radio frequency) or AM (Acousto Magnetic) tags to folding cartons, labels, and other packaging, during the converting process. This will reduce the cost of tagging at the retailers' end and give the converters an opportunity to provide a value added service to the client. Thus, going forward, innovative and solutions-based approach rather than a product-centric approach will help converters and label manufacturers in generating growth.
The converters also have adopted sophisticated error-detection technologies that are able to help them in sourcing and utilising error-free labelling and printing. This is because consistency in the look of the packaging reflects on the brand image. The converters shoulder this responsibility. There are various technologies available to weed out inconsistency in the printing and labelling processes. For instance, Advanced Vision Technology (AVT) provides an aid for detecting the printing defects in the labelling print.
The converters' production methodology is much like an assembly line, interlining and merging various substrate qualities and product varieties to obtain a packaging solution. Packaging is thus the outcome of the synergy of various substrates and associated products that have gone into its manufacturing. It is therefore necessary that the emerging trends in the allied products segment is observed and analysed. Labels, printing, inks, and glue are some of the associated materials and processes used in obtaining the final pack. The growth of end-user industries like retail and the increasing appetite of the consumers for branded products have enhanced the demand for glossy inks and labels, something that will only grow over time. More so, the codex regulations have also augmented the need for the use of elaborate labelling in the packaged foods segment.
Codex is the international regulatory norm that is being framed to determine and enforce the quality, security, and hygiene of packaged food products.
It is a comprehensive regulation for labelling of packaged food products. Additionally, Codex is officially recognised by World Trade Organisation (WTO) and has a clout and acceptability of an International law. Thus, any country, which is in non-compliance with codex regulations, is fined heavily for obstructing international free trade. Under the codex stipulation, the industries will be mandated to provide complete and comprehensive information regarding food, nutrition, and source ingredients. This proposed regulation is not just a challenge but also an opportunity for the labelling industry.
The demand for labelling and tagging from the retail sector is substantial. This reflects in the retail industry's ever increasing need for product security and inventory management. The mandate by large, retailers to use RFID technology, for instance, will require the converters and suppliers to be ready to meet the challenge and leverage the opportunity generated. Adoption of RFID, which currently is in a nascent stage, will require a major change in the way the product is labelled. Therefore in order to fully realise the potential of the RFID technology, newer sophisticated technologies and packaging practises would need to be adopted.
(Source: ITC's Onboard)