ITC Ltd has developed a shelf-ready packaging solution for consumer goods where the pack itself turns into a retail shelf, reducing the retailer's investment on shelves, optimising space and attracting consumer's attention faster, but likely increasing costs for marketers.
The tobacco-to-hospitality-to-consumer goods conglomerate, which also owns South Asia's largest packaging unit, believes its new packaging solution can transform FMCG packaging the way Swedish packaging major Tetra Pak did for beverages and dairy industries.
"Developed markets extensively use shelf-ready packaging solutions for modern trade. We believe this is a trend that will catch on in India, especially at a time when retailers are trying to reduce capital cost and we are getting ready for the same," said ITC's chief executive for the packaging and printing business R Senguttuvan.
The company plans to soon pitch its shelfready solution to FMCG firms for whom it undertakes packaging, including Tata Global Beverages, GlaxoSmithKline Consumer Healthcare, Colgate Palmolive, Ferrero Rocher, Nestle, Goodricke, Lotte, Marico, Bayer, Reckitt Benckiser, Pernod Ricard and United Spirits, besides its clients in Europe, Africa and the Middle East.
ITC's packaging business is part of the paperboards, paper and packaging division, which last fiscal clocked combined net revenue of Rs. 4,860 crore. Senguttuvan said the company plans to set up a new packaging plant in western India to tap potential growth opportunities, though it is yet to decide on a location. ITC currently has three plants - in Chennai, Haridwar and Munger, which have integrated packaging and design units.
The packaging division is also responsible for making clutter-cutting packaging designs for ITC's own packaged food and personal care products such as Engage deodorants and Sunfeast Dark Fantasy biscuits. This has become an area of concern, with some rival FMCG companies turning cautious about using ITC's packaging.
"It is indeed a challenge which we often need to overcome," said Senguttuvan. However, he added that the firm runs its businesses with complete professionalism and maintains strict confidentiality for its clients. "We have strong processes and controls in place as well as multiple levels of physical and data security to ensure confidentiality, which our customers appreciate."