Trade fair duo exploits tremendous demand for beverage technology and process and packing technology
“indi coco”, 330 milliliters of pure coconut water, on sale for 1.89 euros online – and it all came about because Manoj, one of the three directors of the Cologne start-up enterprise behind this brand, had so enjoyed coconut water as a child in India. Now he is bringing it to Germany. Although it was heavily hyped in the USA, in India it can actually be bought at any street corner, fresh from the nut. Examples such as these demonstrate India’s vast latent potential for any beverage manufacturers who serve the market with modern packaging such as PET, and equally so for the producers of packaging and process technology for beverages, foods and the many small items required for everyday living. At Mumbai, from November 6 to 8, 2012, drink technology India (dti) and International PackTech India will offer a platform to bring together supply and demand for this sector.
Coconut water is not the only specialty beverage in the subcontinent. Another popular drink is ‘lassi’, a mixture of natural yoghurt, water and a little salt which is greatly in demand on hot days or to accompany a highly-spiced meal. Itґs a refreshing milk-based beverage. In South India people prefer its counterpart buttermilk, sometimes also ‘nimboo pani’: cold water with ice-cubes and freshly-squeezed lemon juice. The Indians do of course love and cherish their ‘chai’ – tea with milk and spices such as cardamom, cinnamon, pepper, cloves, nutmeg or ginger. Coffee took much longer to capture the hearts of the Indian people but is now viewed as particularly chic. The American Starbucks chain of coffee-houses now wants to conquer India with its products, describing ‘an evolution in India’s lifestyle. More and more Indians aspire to adapt their standard of living to international norms.’
The middle classes with high purchasing power
This hits the nail on the head, at least for the higher-spending middle classes. According to the German Federal Foreign Office, more than half of India’s population, especially in rural districts, has less than two dollars a day to live on. However, the middle class is expanding. An estimated 50 to 150 million people – the figures vary – already regard themselves as members of the (urban) middle class. For comparison: the whole of Australia has only 20 million inhabitants. On the one hand, manufacturers use locally-produced, simpler machinery, which meets their needs in many cases. On the other, the dizzying pace of economic development is setting off a surge in demand for the kind of high-quality technological solutions supplied by European machinery manufacturers, for example.
Successful trade fair pairing
Back to drink technology India (dti) and International PackTech India. This trade fair duo appearing under one and the same roof has quickly made its name as a venue for the international packaging, package printing, processing, beverage and liquid food industries. In 2010 the organizers of the two specialized trade fairs, Messe Mьnchen (dti) and Messe Dьsseldorf (International PackTech India) and their Indian subsidiaries, brought the two events together for the first time. Visitors and exhibitors alike can benefit equally from this synergy, as the 2010 dual trade fair showed. In 2012 the total increase in exhibition space for both events will be almost 50 percent, thanks to the high uptake. Almost 300 exhibitors are expected. Indian bottling and packaging companies are seeking out this diverse and internationally-oriented range of choice and comparison. According to Yatindra R. Sharma, Managing Director, KHS India, dti features booths with “amazing technology products and solutions to serve the dynamic growth in the Indian beverage industry”.
Highly promising forecasts for the beverage industry
Given the highly promising figures and forecasts, the beverage industry sees India as the market of the future. For instance, there are grounds for the highest hopes in the consumption of beer – at present less than two liters per head per year. Euromonitor International expects the market in beer to double to a turnover of 9 billion dollars by 2016 alone. At present (2011) beer output is approximately 15 million hectoliters. 56 breweries produce beer under license from the Indian Government. From 2009 to 2013 market forecasters reckon on an annual average rate of increase of 12 percent. It will be the young and open-minded Indians with some money in their pockets who send beer consumption soaring. This means big opportunities, especially for medium-sized manufacturers of process technology and bottling technology for breweries – manufacturers who can and do present themselves at their very best at drink technology India (dti). Thomas Rutka, the Managing Director of Ziemann India, has fond memories of dti 2010: “The quality of visitors was excellent. dti will also be successful in the future together with International PackTech India.”
Spirits: a gigantic business despite the advertising ban
Alcohol advertising is generally prohibited in India. This doesn’t stop the Indians making their nation one of the world’s biggest consumer markets for alcoholic beverages, especially spirits. The licensed liquor outlets and bigger restaurants offer gin, whisky, rum, arrak, wine, sparkling wine or toddy (palm wine). Even in the five-year period 2004 to 2008 sales of spirits rose by over half to 1.2 billion liters. From 2009 to 2013 a further average growth of around 10 percent per year may be expected – up to just under 2 billion liters of spirits – four times the volume of spirits produced in Germany. And all these spirits need to be produced, bottled, labeled and packaged. Exhibitors at International PackTech India and drink technology India (dti) offer precisely this range of know-how. For Virendra Ghosh, General Manager of Imperial Spirits Ltd., Mumbai, the premiere of this trade fair duo of dti and International PackTech India in November 2010 was “marvelous. I was able to bring my knowledge of packaging right up to date and got a very good overview of the brands and products in today’s competitively-oriented markets. I am already eagerly awaiting the next event.”
Hygienically faultless water in demand
The alcohol industry is not even the biggest seller in the beverages industry. In and around the soft drinks industry, for instance, there are over 125,000 employees working at over 100 sites. In 2011 they produced about 1.5 billion liters of carbonated soft drinks. Foreign direct investments in this sector so far amount to over one billion dollars, among the biggest foreign commitments in India. Soft drinks are predicted to have an annual growth rate of almost 7 percent by 2013. Sales of bottled water are growing twice as fast, and also start at a much higher level, at around 4.5 billion liters in 2011. Every Indian needs and drinks water. Unfortunately the supply and quality of drinking water are not always satisfactory and diseases ensue. This increases the demand for bottled, hygienically faultless water, which can be offered at low prices. Here, there is a great need for the additional bottling capacities which many exhibitors at dti and International Pack Tech India can provide. For Roland Pokorny, Vice President Corporate Communications of Krones AG, dti “has been a great success for presenting Krones to the Indian market. We are looking forward to participating again in 2012.”
The world’s biggest milk producer
But there is some even better news. India is in fact the world’s biggest milk producer. Milk is firmly established in the daily diet. Dairy farmers have an annual output of over 100 million metric tons, most of which is directly consumed or sold informally. The dairy industry processes only about 13 percent of this milk yield. But this segment also is growing, from about 12.6 billion liters in 2011 to an expected 14.2 billion liters in 2013. In these two years alone additional capacity will be needed for the industrial processing of 1.6 billion liters of milk.
The most important sales market in Central and South Asia
For German manufacturers of machinery for food processing and packaging, India is the most important sales market in Central and South Asia. Information from the food and packaging machinery section of the German engineering federation (VDMA – Verband Deutscher Maschinen- und Anlagenbau) states that in 2011 the subcontinent imported German-made machinery to a total value of 103 million euros, up 51 percent from the previous year. Baking machines made up the biggest share of food processing machinery delivered to India, followed by confectionery machinery, brewing machinery and meat processing machinery. Out of the 70 million euros’ worth of packaging machines delivered, beverage packaging machinery accounted for 21.7 million euros. Although the supply of India-made processing and packaging machinery has increased in the past few years, demand for the latest foreign technology remains high, as International PackTech India and drink technology India (dti) show. For Rajesh Nath, Managing Director of VDMA’s Indian office in Calcutta, flexible packaging, including PET, is the fastest growing segment: ‘With the beverage and liquid food industry growing at around 14 to 15 percent, this will boost the demand in packaging and process technology. Hence this industry is gearing up to adopt scientific and functional packaging while keeping hygiene as important criteria.”
Indian manufacturers, especially the export-oriented ones, therefore have a very strong high-tech focus in order to meet international standards and be competitive. In 2012 international PackTech India and drink technology India (dti) will blaze the trail in this promising market.
Packaging strategies to preserve economic resources
Over the past two decades the Indian economy has been gaining ground at a dizzying pace. According to the OECD, the per capita income has doubled in just eleven years to its present level of around 1,000 euros annually. Products which just a few years ago were regarded as typically ‘Western’ are now omnipresent in the cities and create an appetite for convenience food – not yet everywhere, but increasingly often. Alongside the manufacture, processing, transport and storage of food, as an analysis from the Hamburg World Economics Institute (HWWI, Hamburger WeltWirtschaftsInstitut) emphasizes, the secondary sectors such as the packaging industry are also highly significant. “Beside the need to serve the demand from a growing middle class with an increasingly westernizing lifestyle, the focus lies on enabling the entire population to participate in the slow but sure growth in prosperity.”
The Indian government estimates that around 40 percent of the foods produced in India, including vegetables, are destroyed by defective refrigeration and transport, in other words by failures in the chain of value creation in the infrastructure – this is a destruction of economic resources. In order to reduce the post-harvest losses, which a report from Metro Cash & Carry puts at 30 to 40 percent of the volume of fruit and vegetables, the Indian government is now offering state loans to tempt investors to commit to refrigeration logistics. A sensible packaging strategy could be applied here to help preserve the goods.
International PackTech India and drink technology India (dti), with their comprehensive range for the food industries and for packaging, beverage and process technologies, is the very best place to be, according to Olaf Mьller, the Vice President of Pentair Beverages & Niches: “dti is the platform for one of the most attractive markets in the world. In 2010, dti has proven that is has become India’s number one fair for the beverage and liquid food industry. We are looking forward to dti 2012.”