PackMan highlights urban slowdown during the festive season

Did you know that India is the largest whisky market in the world? This translates into annual sales of 250 million cases in 2023.

The grim news is, for the first time since the pandemic, the demand for alcoholic beverages fell by 1% in the September quarter. PackMan heard certain AlcoBev majors blame flooding; others — increased taxes reducing demand, and the economic stress that has reduced consumption across categories.

This slowdown can be observed in the urban belt overall. PackMan wagers it will worsen if poor wage growth and reduced loans continue to burden the common man. Despite this, India’s growth rate has increased recently owing to investments in digital infrastructure.

What has the urban slowdown hit the worst? PackMan observed how the value and popular segments have been dented — and the trend is similar in the automobile sector.

Of course, the buzzword cannot be ignored — quick commerce. It was all the rage at the ElitePlus summit at the Jio World Convention Centre. Currently, there are more than 600 D2C startups in the country. Given the speed of the growth of quick commerce, a lot of these brands will have to step into direct 20-minute deliveries by next year. Or is it ten minutes?

Of late, small SKUs have been reducing the market share they occupy. Rs 10 pack sizes deliver volumes of 20% and Rs 20 pack sizes of 15%. The eye-opener is with the Rs 5 SKU, which was at 35% in 2022, but is projected to reduce in the future.

Packs of Rs 10 deliver volumes of around 23% and that of Rs 20 account for around 12-14% respectively. Industry executives say that the share of Rs 5 is reducing in the FMCG basket. It was 35% two years ago and will go down further in the future.

All this is expected to boost the Indian flexible packaging industry which is expected to grow from USD 24 billion in 2023 to USD 36.29 billion in 2032. Rising demand for flexible packaging in the food and beverages industry is expected to be India's primary driver of market growth.

A few weeks ago, PackMan reported how Reliance was reviving the Campa brand, causing a substantial shift in the cola market. Now, PackMan has heard that the company is deploying the same strategy to capture the burgeoning snacks sector — moving aggressively into the chips, namkeen, and biscuits markets.

According to IMARC, the Indian snacks market was valued at Rs 242,694 crore in 2023; and expected to notch Rs 295,521 crore by 2032.

As per the market research report, the rising demand for flexible packaging in the F&B industry will translate into the growth of stand-up pouches.

Meanwhile, according to leading business portals, during October, eCommerce aggregators recorded nearly Rs one-lakh-crore in sales (roughly USD 12-billion) — which is an expansion by more than a fifth from this time last year.

In other news, the Food Safety and Standards Authority of India (FSSAI) has tightened the reins on norms on antibiotics residue in meat, meat products, milk, milk products, poultry, eggs, and fish. The food safety body has reduced the permitted levels and added drugs to its watchlist.

The point is that the rise in eCommerce and evolving consumer lifestyles has caused a surge in packaged food consumption in India. However, there may exist a gap while achieving the safety, quality and labelling standards. After Cadbury’s Bournvita, Nestle’s Cerelac steps in with the issue of sugar levels in the product.

The FSSAI highlighted a significant shift in the regulator's approach over the past decade. This change is characterised by a more proactive stance and a focus on collaboration with the food industry. FSSAI has moved towards being more engaged with food businesses, encouraging them to comply with food safety standards rather than imposing regulations.

Creating awareness is the key.

Many brands print “future dates” on their packaging and labels. This is a regular practice. Breadmakers print the packaging date stamp in their delivery vehicles while handing it to retailers. And so, the delivery date becomes the manufacturing date.