Authored by: Mrs. Salloni Ghodawat
India’s Fast-Moving Consumer Goods (FMCG) industry is undergoing a sustainable packaging revolution. The traditional packaging relied heavily on single-use plastic for its cost-effectiveness and durability. However, it comes with a significant cost, as it takes years to decompose, which can have an adverse impact on the environment. Studies suggest that it is responsible for less than 10% of the total life cycle emissions of 23 out of the 30 foods. In recent years, the consumption of packaged food has also increased. According to estimates, the global packaged food market will reach $3.4 trillion by 2030 at a 5% annual growth rate. As per the Ellen MacArthur Foundation report, there could be more plastic than fish in the oceans by 2050. As the world is moving towards sustainability and eco-friendly practices to combat the rising concern of environmental impacts, the FMCG industry is also revolutionising its practices and transitioning towards sustainable packaging. Heightened awareness of sustainability among consumers, along with the government’s green laws and initiatives, is also reshaping this transition in the industry.
Factors Driving the Boom
According to an IMARC report, India’s sustainable packaging industry is anticipated to grow at a compound annual growth rate (CAGR) of 7.24% from 2023 to 2028. Rising consumer awareness, regulatory pressures, technological advancements, corporate social responsibility (CSR) trends, and a commitment to a circular economy are creating a boom. FMCG companies are adopting more sustainable materials and reducing the use of single-use plastics; they are also practising recycling by utilising recycled content in packaging. This is not only beneficial for the environment but also provides long-term financial advantages, as such initiatives are increasing customer loyalty. However, the cost of sustainable packaging is higher than that of traditional packaging, but the majority of consumers are willing to pay more for it. An industry survey found that 75% of consumers are willing to pay more for sustainable packaging, while 71% believe that companies should be responsible for using eco-friendly packaging materials in India.
To enhance the impact of these sustainable measures and help achieve the country’s net-zero goals, the Government of India has introduced various initiatives. These include the Plastic Waste Management Rules, the Extended Producer Responsibility (EPR) framework, and the Production Linked Incentive Scheme for the Food Processing Industry (PLISFPI). Additionally, the Food Safety and Standards Authority of India (FSSAI) has implemented the Food Safety and Standards (Packaging)Regulations, 2018. Such initiatives are crucial in fostering recycling, effective waste management, and promoting sustainable packaging practices. Regulatory measures aimed at reducing the plastic footprint in the Food and Beverage (F&B) industry further support this transition.
Challenges in sustainable packaging
While consumers’ choices are fueling the sustainable packaging revolution, supporting brands introducing more sustainable and eco-friendly solutions, this alone is not enough to bring about change. It is also the responsibility of consumers to alter the way they dispose of the goods. Many consumers are unaware of the recycling part and how they can contribute to it. There is a need for a robust program to raise awareness among consumers about the effective waste management process and how they can contribute to this transition. Proactive strategies are making headway; however, cost disparities between sustainable and traditional packaging continue to be a major barrier. Businesses are investing in R&D and harnessing advancements in manufacturing and materials to bridge this barrier, but there is a need for policies.
Transitioning to sustainable packaging comes with its challenges, but proactive measures are making headway. Cost disparities between eco-friendly and traditional packaging pose challenges. However, some businesses leverage advancements in manufacturing and materials to bridge this gap. There is a need for investment in R&D programs to introduce affordable, sustainable materials that streamline production without compromising quality at competitive prices. Supply chain constraints are also one of the significant barriers that need to be addressed by the government, stakeholders, and industry leaders. This can be achieved through measures such as infrastructure upgrades, strategic partnerships, and efficient logistics, all of which can contribute to the expansion of sustainable packaging operations within businesses.
Paving the Way for a Greener Future in FMCG Choices
Despite existing barriers, the advantages are considerable, including potential cost reductions of up to 30% for businesses eager to adopt eco-friendly solutions. By aligning with regulatory standards and addressing the preferences of environmentally conscious consumers, companies not only enhance their brand reputation but also cultivate deeper connections with their customers. This move towards sustainable packaging reflects a broader shift in keeping pace with consumer expectations. By embracing innovative packaging solutions and eco-friendly practices, businesses are building stronger connections with their consumers. As this movement gains momentum, it sets a new benchmark for sustainability in packaging, paving the way for a more responsible and eco-friendly approach in the industry.
(The author of the article is the CEO of Ghodawat Consumer Ltd, the FMCG arm of one of India’s leading conglomerates, Sanjay Ghodawat Group.)
