SERIAL TITLE PAGE

No. No.
1. Executive Summary 2
Certificate of Origin 4
Acknowledgement 5
2. Introduction 6
2.1 Packaging Industry in India 7
2.2 Overview of Processed Food Industry 11
2.3 Rationale of the Study 24
2.4 Key Trends in the Packaging Industry
2.5 Overview of Indian Biscuit Industry 35
3. Literature Review 37
4. Research Itinerary 41
4.1 Key Objective 41
4.2 Sub Objectives 41
4.3 Hypothesis 41

5. Research Methodology 42
5.1 Type of Research 42
5.2 Sample Size 42
5.3 Sampling Techniques 42
5.4 Data Collection Techniques 42
6. Analysis based on: 43
6.1 Questionnaires (Consumers) 46
6.2 Questionnaires (Shopkeepers) 61
7. Findings 69
8. Conclusions and Recommendations 70
9. Bibliography 73
10. Annexure
9.1 Questionnaires (Consumers + Shopkeepers) 74
9.2 Response Sheets (1-6) 76
 EXECUTIVE SUMMARY

Among the various industrial sectors, food processing is somewhat unique in that, unlike
others, it covers a fairly broad spectrum of products based on a wide range of raw
materials from agriculture.

From all accounts the initiatives taken have led to a positive growth in this sector. This is
evident from the number and variety of bakery and confectionery products, snacks and
drinks available in the market under different brand names and from the increasing
interest evinced by private entrepreneurs in this sector.

However market penetration is still low in this industry. Right now only two percent of
the fruits and vegetables produced in the country are now processed, as compared to 30
per cent in Thailand, 70 per cent in Brazil, 78 per cent in Philippines and 80 per cent in
Malaysia. The value addition in the food sector in India is a mere 7 per cent. The output
of fruits and vegetables is projected to increase substantially in the coming years.
Currently it constitutes 6.6 percent of total food grain production and this figure is
expected to reach 80 per cent by the year 2010.

However though small the statistics may make it look like, the impact that packaging
food has on the purchasing behavior is humungous. But what is the generic difference
between food and packaged food. The simple fact that food which is packaged is safe has
shelf life and draws the customer’s attention.

Packaging is one of the most important determinants of the success of a product in the
market. In marketing language there are four P’s which are product, price, place and
promotion. And packaging is the part of very first P without which not a single product
can be assumed complete.

In today’s market where customers are price and quality conscious, packaging plays a
very important role to ensure that the quality of the product is not hampered. As we know
that the quality of a product is ensured by the quality of packaging so there we can draw a
co-relation between packaging and processed food industry. When it comes to the
processed food industry the importance of the packaging goes skyward.

Packaging, as distinct from mere “packing”, plays it’s most visible - and catalytic - role in
a modern economy with the widespread adoption of branding of products and
development of consumer preferences. To the extent that any consumer product is
packaged in a manner that meets the criteria of safety, convenience and attractiveness, it
gains market share. In the aggregate, packaging as a sectoral activity boosts consumption
and economic growth.

Take the case of biscuits for example. The biscuit mmarket is driven by the consumer’s
choice and marketers accordingly change their product type to meet the need of the
customers. Although there are four types of Biscuit products consist of --hard biscuit,

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cookies, crackers and wafer. Consumers, however, generally choose biscuits by their
brands not by the type. Producers generally produce more than one type of biscuit. So
which of the Ps of packaging is significant in influencing consumer behavior the most?
One can decipher it to be packaging while another school of thought can portray
packaging as another P of marketing and associate more weightage to price, flavor and
purchasing pattern of biscuits.
To find out the actual relationships and the degree of importance that can be associated
with the packaging of biscuits, the following research was undertaken. As the pages of
the research report unfold, several questions in this direction shall stand answered.

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 INTRODUCTION
If you stripped the label off a traditional bottle of Coca-Cola--the curvy, old-fashioned,
small container-everyone would still know what it was. And if you took away the bottle,
the label still would speak volumes about the product. You don't need Coca-Cola Co.'s
advertising budget to get the recognition that comes with putting a superior product in a
distinctive package.

Whether it's a little package or a big one, everyone knows that the present with the
biggest bow must be special.Package design is the first moment of truth to the consumer.
India is among several Asian countries where the packaging industry is experiencing a
high growth rate, and expectations are that the trend will continue.
Packaging stands as a powerful tool capable of making or breaking image of any product.
It has produced business opportunities in abundance and generated bulk of wealth for all
the players in this business. In today's world it is hard to imagine a product without a
cover on it.

Liberalisation has brought in the impacts not only on economy but also on social,
cultural, environmental, employment and many areas of relevance. India's packaging
consumption ranks 12th in the globe. The market which was around $6.9 million during
2004 is growing at the rate 15-18% per annum and is likely to reach $13.4 billion by
2009. During this period world packaging demand is growing at the rate 4 -5 % from
$459 to $564 billion.The impact of globalisation can be clearly seen at least among the
upwardly mobile group dependent greatly on packaged food resulting into changes in
consumption habits and the culture along with other parts of the world.

The growth rate of the packaging industry is primarily driven by growth rates and market
trends within various end markets. Growth rates vary from a low of 3.2% for beverages to
a high of approximately 5% for health care products. The largest end market, food, has
historically grown at slightly less than 4% annually.

Cooking is a luxury that this time-starved generation finds less and less time for it. No
surprise, that the latest numbers indicate a 25% increase in the sales of packaged food
over the past one year, making it among the fastest growing FMCG categories.

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Packaging Industry in India

Importance of Packaging:

Packaging is one of the most important determinants of the success of a product in the
market. In marketing language there are four P’s which are product, price, place and
promotion. And packaging is the part of very first P without which not a single product
can be assumed complete.

Packaging is at the heart of the marketing strategy in terms of functionality, shelf appeal
and convenience. Every market has stringent quality standards for packaging aimed at
ensuring health and hygiene for the consumers and when we are talking about the
processed food industry then packaging plays a vital role, be it for a better shelf life,
attractiveness, convenience and cleanliness. Now-a-days processing and packaging are
key issues in food industry and packaging material manufacturers are looking forward to
a growing processed food market.

In today’s market where customers are price and quality conscious, packaging plays a
very important role to ensure that the quality of the product is not hampered. As we know
that the quality of a product is ensured by the quality of packaging so there we can draw a
co-relation between packaging and processed food industry. When it comes to the
processed food industry the importance of the packaging goes skyward.

Packaging : The silent salesman

Packaging today, has grown in importance and is regarded as a vital marketing tool. It
enhances product value and helps expand markets within and outside the country. It is a
global and fast growing industry. The growth is not in volumes alone but also, in quality
and applications as well.

The most obvious reason for packaging is product protection; food items from fresh
foods, to dairy and snack products would not reach the customer in the accepted quality
of today's supply chain if they were not given the superior product protection that
packaging supplies.

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Without packaging, consumers would need to shop daily, thus increasing the volume of
food waste and reducing the choice of products available. If it were not for packaging we
would not have the growth that we are having today.

The technological developments in packaging sector have improved the quality of food
products resulting in change in the concept of packaged foods in India

Packaging as an Industry:

All major industries create wealth but if there is one industry that plays a unique role by
way of both creation of wealth through a wide range of manufacturing activities and also
by way of preserving the wealth or value created by many, many other industries, it is
packaging.

Today, packaging in India is estimated to account for a turnover of Rs.15,000 crores, and
its linkages are extensive and highly employment-creating. On one side, it involves
manufacture (and sometimes import) of a wide range of packing material - paper,
paperboard, cardboard, a range of polymer products including rigid and flexible
packaging material, aluminium foil, tin and good old wood and steel. Other backward
linkages of packaging including printing, labeling and binding/adhesive tapes. Of course,
machinery for making/processing these products and for packing/packaging is another
segment closely linked to this industry.

Apart from the huge value addition and employment involved in these activities,
packaging serves the economy by helping preservation of the quality and lengthening the
shelf life of innumerable products - ranging from milk and biscuits, to drugs and
medicines, processed and semi-processed foods, fruits and vegetables, edible oils,
electronic goods etc, besides domestic appliances and industrial machinery and other
hardware needing transportation. With water becoming a consumer product, polymer
material-based bottles are becoming a universal presence.

Packaging, as distinct from mere “packing”, plays its most visible - and catalytic - role in
a modern economy with the widespread adoption of branding of products and
development of consumer preferences. To the extent that any consumer product is

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packaged in a manner that meets the criteria of safety, convenience and attractiveness, it
gains market share. In the aggregate, packaging as a sectoral activity boosts consumption
and economic growth. Heightened competition in all product sectors within the country
as also the increasing need to look for export markets have contributed to the rising
demand for appropriate, and at the same time cost-effective, packaging material and
technologies.

The Indian Institute of Packaging (IIP) has placed a commendable role over the decades
in creating the necessary skill base and technological infrastructure for development of
packaging in the country. However, it is a moot question whether the importance of
packaging is recognized in mainstream academic curricula.

The packaging industry’s growth has led to greater specialization and sophistication from
the point of view of health (in the case of packaged foods and medicines) and
environment-friendliness of packing material. The demands on the packaging industry are
challenging, given the increasing environmental awareness among communities. The
World Packaging Organization’ s (WPO) slogan, “Better Quality of Life Through Better
Packaging”, sumps up the important place that packaging occupies in a modern economy.
To ensure that public appreciation of this role and the policy-makers’ support to the
industry are not diluted, attention should be paid to basic issues like collection,
segregation and reuse of synthetic packaging material and observation of regulatory
requirements.
India's GDP is growing consistently at over 8% in the past three years. The government
and the key stakeholders are striving hard to bring about the growth all over. There is a
lot of focus given on manufacturing, agriculture, food processing, retailing and
infrastructure. In the light of such rapid changes, an interface of far more rigorous manner
was the need of the hour, and India Pack 2006 provided just that.

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Some major highlights of the Indian packaging Industry:

1. Most of the basic raw materials needed for packaging industry such as paper
Board, plastic, glass, metal and others are available in abundance.
2. Packaging machinery sector involved in making packaging converting machines,
product packaging machines and allied equipments have adopted modern
technology and are exporting these machineries even to the developed economies
of the world.
3. Over 40% of export is done by small and medium sector industries where
packaging industry has its major presence.
4. India’s packaging industry is growing at 15% per annum which is more than
twice the global average.
5. The Indian packaging industry represents 2.3% of the world market. The fastest
growing packaging segments are laminates and flexible packaging especially PET
and woven sacks.
6. The traditional rigid packaging users are migrating to flexible packaging in a big
way. Laminated products including form-fill-seal ouches, laminated tubes and
tetra packs are growing at around 30% per annum. There are about 600-700
packaging machinery manufacturers, 95% of which are of small and medium
sector located all over India
7. Germany and Italy are the largest suppliers of packaging machineries to India but
focus is now shifting on Taiwan, Korea and China. Indian packaging machinery
imports are US$125 million.

Some of the most commonly used stuffs in packaging:

Aluminium Foil, Butter Paper, Cartons, Corrugated Boxes, Cream Packaging, Insulation
Material, Laminated Paper/Sacks, Multi-wall Paper Bags/Sacks, Tuff Polypacks,
Paperboards for Packaging, Plastic Containers, Allied Plastics, Ami Polymers,
Plastipacks, Plastic Films, Tin Containers, Plastic Crates, Bottling Systems.

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Overview of Processed Food Industry
Food processing mainly involves any type of value addition to agricultural or
horticultural produce and also includes processes such as grading, sorting, packaging
which enhance shelf life of food products. The food processing industry provides vital
linkages and synergies between industry and agriculture. The Food Processing Industry
sector in India is one of the largest in terms of production, consumption, export and
growth prospects. The government has accorded it a high priority, with a number of fiscal
relief’s and incentives, to encourage commercialization and value addition to agricultural
produce, for minimizing pre/post harvest wastage, generating employment and export
growth. The Processed Foods Division processes and markets a wide variety of fruits,
vegetables and ready-to-serve Indian Foods.

India's food processing sector covers a wide range of products fruit and vegetables; meat
and poultry; milk and milk products, alcoholic beverages, fisheries, plantation, grain
processing and other consumer product groups like confectionery, chocolates and cocoa
products, Soya-based products, mineral water, high protein foods etc. India as one of the
major food producers in the world and has abundant availability of a wide variety of
crops, fruits, vegetables, flowers, live-stock and seafood. Diverse climatic conditions and
a long coastline have contributed to India’s position as a leading food producer. While
India has an abundant supply of food, the food processing industry is still nascent: only
two percent of fruit and vegetables; and 15 per cent of milk produced are processed.

The size of the Indian food processing industry is around $ 65.6 billion, including $20.6
billion of value added products. Of this, the health beverage industry is valued at $230
million; bread and biscuits at $1.7 billion; chocolates at $73 million and ice creams at
$188 million.

The size of the semi-processed/ready-to-eat food segment is over $1.1 billion. Large
biscuits & confectionery units, Soya processing units and starch/glucose/sorbitol
producing units have also come up, catering to domestic and international markets.

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• Despite these low volumes, the processed food industry ranks fifth in size in the
country, representing 6.3 per cent of GDP. It accounts for 13 per cent of the country’s
exports and 6 percent of total industrial investment.

• The industry size is estimated at US$ 70 billion, including US$ 22 billion of value
added products.

• The sector has been attracting FDI across different categories.

Sectoral Overview

India has arable land of 184 million hectares and produces annually 90 million tonnes of
milk, 150 million tonnes of fruits and vegetables, 485 million livestock, 204 million
tonnes food grain, 6.3 million tonnes fish, 489 million poultry and 45,200 million eggs.
India's agricultural production base is huge. However, processing level is very low i.e.
around 2.20% in fruits and vegetables, 35% in milk, 21% in meat and 6% in poultry
products, etc. India's share of processed food is about 1.6%. Hence, there is immense
potential for investment in this sector. To facilitate the prompt growth of food processing
industry, the Government has implemented the scheme for infrastructure development
comprising a food park scheme, establishing packaging centres, integrated cold chain
facility, value added centres, Irradiation Facilities and Modernized Abattoir.

Fruits and Vegetable Processing

The installed capacity of fruits and vegetables processing industry has increased from
11.08 lakh tons in January 1993 to 21.18 lakh tons in January 2006. The utilization of
fruits and vegetables for processing is estimated to be around 2.20 percent of the total
production.

Over the last few years, there has been a positive growth in ready to serve beverages, fruit
juices and pulps, dehydrated and frozen fruits and vegetable products, tomato products,
pickles, convenience veg-spice pastes, processed mushrooms, and curried vegetables.

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Meat and Meat Processing:

At present processing level of buffalo meat is estimated at 21 percent, poultry 6 percent,

and marine products 8 percent. Production of meat and meat products is gradually
increasing from the year 1995 onwards. Processing of meat products are licensed under
Meat Food Products Order (MFPO), 1973 which was hitherto being implemented by the
Directorate of Marketing and Inspection (DMI) has been transferred to ministry of Food
Processing Industries with effect from March 2004.

Dairy Processing:

Organized dairy industry accounts for 13 percent of the milk produced in India. The rest
of the milk is either consumed at farm level, or is sold as fresh, non- pasteurized milk
through unorganized channel. The share of the organized sector is expected to rise rapidly
-especially in the urban regions. India, with its status as the largest milk producer in the
world, is on the verge of assuming an important position in the global dairy industry.
Many international dairy companies are viewing India with an eye to tap its vast growing
market for dairy products. Total milk production in the country is over 90 million tonnes.
Per capita milk consumption is 75 Kgs. The overall growth rate of the dairy industry in
India is 4 percent, which is almost 3 times the average growth rate of the dairy industry in
the world. Milk processing level is 35 percent, which is, 13 percent in the organized and
22 percent in the unorganized sector.

Fish Processing:

With its long coast line of over 8000 kms., 50600 sq. kms of continental shelf area and
2.2 million sq. km. of exclusive economic zones, India is endowed with rich fishery
resources.

Considerable infrastructure facilities for processing of marine products have been

developed over a period of 50 years. At present, there are over 372 freezing units with a
daily processing capacity 10320 tons and 504 frozen storage with a capacity of 138229.10

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tons. In addition, there are 11 surimi units, 473 pre processing centers and 236 other
storages.

The quantum of marine products processed and exported and revenue thereof during the
last five years is as follows:

Consumer Food Industries:

Consumer food industry includes pasta, breads, cakes, pastries, corn flakes, ready to eat
and ready to cook products, cocoa products, biscuits, soft drinks, beer, alcohol beverages,
mineral and packaged water and segment of consumer foods. Their production is about
4.00 million tons per year. Manufacturing of bread is reserved for small-scale industry
(SSI). Out of the total production of bread, 40 percent is produced in the organized sector
and the remaining 60 percent in the unorganized sector. Similarly, production of biscuits
in the organized sector is about 80 percent and quantity of biscuits produced in the
unorganized sector is about 20 percent. During the year 2005-06, (upto December),
financial assistance was sanctioned by Ministry of Food Processing for 27 consumer
food-processing units.

Soft Drinks

Range & Scope of Products

These major product groups are non-alcoholic flavored/sweetened beverages, Cola;

Orange & Lemon are some of the accepted, tasted in India. Currently it is estimated that
65% prefer non-alcoholic drinks. Manufacture of Packaged drinks is governed by FPO.

Major Players

There are several well established corporations in this Industry with widely advertised
Brands. Some of the major manufacturers are

• Parle (Exports) Pvt.Ltd

• Pepsi Foods Ltd
• Coca-Cola
• Pure Drinks (New Delhi) Ltd.

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Investment:

The food processing sector needs investment of about USD 28-35bn to meet the changing
food demands in India, according to industry estimates.
Foreign direct investment (FDI) in the country's food sector is poised to hit the USD 3-
billion mark. In the last one year alone, FDI approvals in food processing have doubled.
Foreign direct investment in food already beats the money being pumped into the far-
more-glamorous hotels and tourism industry.And there is huge upswing move in this
sector that will be more clear after analyzing the figures of previous three years:

Exports:

The Ministry of Food Processing Industries has been encouraging the new processing
capacities for agro- food products through its various policy initiatives and plan schemes
providing financial incentives for setting up of new units and modernization of existing
units. For example: The main markets for mango pulp are Saudi, Kuwait, UAE,
Netherlands & Hong Kong. In case of pickles & chutneys the popular markets are USA,
UK, UAE, Germany, & Saudi. Other items like tomato Paste, Jams, Jellies & Juices are
exported to USA, Russia, UK, UAE, and Netherlands.

Policy Initiatives:

 Most of the processed food items have been exempted from the purview of
licensing under the Industries (Development and regulation) Act, 1951, except
items reserved for small-scale sector and alcoholic beverages.
 Food processing industries were included in the list of priority sector for bank
lending in 1999. Automatic approval for foreign equity up to 100 percent is
available for most of the processed food items except alcohol, beer and those
reserved for small-scale sector subject to certain conditions.

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  Excise duty on processed fruit and vegetables has been brought down from 16
percent to zero level in the budget, 2001-2002.
 In the 2004-2005 budget, income tax holiday and other concessions announced for
certain FPI sectors.
 Licensing powers delegated to regional offices under Full Product Order, 1955.

Major Indian and Overseas Players in the Food Processing Industry:

 ITC Limited
 Agro Tech Foods
 Cadbury India Ltd.
 PepsiCo India Holdings
 Nestle India Pvt. Ltd.
 Britannia Industries Ltd.
 Hindustan Lever Limited
 Milkfood
 MTR foods limited
 Godrej industries Limited
 Gits Food Products Pvt. Ltd.
 Dabur India Ltd.

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Opportunities in Processed Food Industry

Processed food industry in India possesses the one of the highest growth rates in the
entire booming industry. With the huge potential lying due to the following reasons:

• Increased levels of literacy, rapid urbanization and rising per capita income have all
caused rapid growth and changes in demand patterns. An average Indian spends about 50
per cent of household expenditure on food items.

• With a population of over 1 billion and a 350 million strong urban middle class and
changing food habits, the processed food market in the country is expected to grow
significantly.

• India’s relatively inexpensive but skilled workforce can be effectively utilized to set up
large, low cost production bases for domestic and export markets.

• The national policy aims to increase the level of food processing from the present 2 per
cent to 10 per cent by 2010 and 25 per cent by 2025.

• Key investment opportunities, both for catering to the domestic market as well as for
exports; exist in many areas of food processing in India. Milk and milk products, meat
and poultry, fruits and vegetables, and beer and alcoholic drinks are some of the areas
with huge potential.

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Driving force of the Processed Food Industry:

The credit for the growth of the Processed Food Industry should not be given to only one
Factor; there are a number of factors which are equally responsible for the success of the
Industry. Some of them have been mentioned below:

Acquisition of Domestic Food Business by MNCs :

Liberalization has brought in through the entry of large multinational and transnational
corporations, foreign investment in this sector. This resulted in competition, technological
upgradation and market expansion. In the face of the competition, domestic Industries are
gradually losing market share and thus selling their businesses to the new entrant MNCs
well before the value of the brand and businesses drops further due to ongoing onslaught
of multinational brands. Latest example will be the acquisition of Bangalore based MTR
chain of Restaurants, which has been acquired by a foreign player.

Global Competition:

Ten years ago Indian processed food industries were crying about high taxation, lack of
infrastructural support, no availability of quality raw material at competitive price, no
availability of latest packaging machinery and packing material etc. as the major reasons
for poor or sluggish growth of this sector.

Technological Upgradation Leading to Superior Quality:

Food processing industry in India has undergone a total metamorphosis over the last six
to seven years, in terms of types, variety, quality and presentation which is a result of
liberalization leading to foreign direct investment in frontiers of processed food sectors.

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Proliferation and Extension of Food Brands:

Depending upon what consumer segments Marketers are targeting the processing
methods, type of food and its taste and packaging and total presentation varies widely. In
a country like India where local taste preferences differ from region to region it poses a
much bigger problem to produce food products which can have a much larger acceptance
and hence a bigger market potential.

MNCs' Entering Traditional Foods Sectors :

Historically, traditional food items were the domain of small local players. Grocery items
earlier were sold loose and unbranded. Then some progressive traders started the
cleaning, grading and primary packaging. And the next stage of development was
branding of primary foods such as Atta (wheat flour), Rice etc. but those were mainly
regional brands. Popular among these were "Rose" and "Shakti Bhog" brands in northern
India. A lot of companies are entering from different segment of food industry be it
Nestle, a Switzerland based company entering into the all sets of food business.

Liberalization has brought in through the entry of large multinational and transnational
corporations, foreign investment in this sector. This resulted in competition, technological
upgradation and market expansion. In the face of the competition, domestic Industries are
gradually losing market share and thus selling their businesses to the new entrant MNCs
well before the value of the brand and businesses drops further due to ongoing onslaught
of multinational brands. This is happening because MNCs have much greater resources to
put behind their brand and business and also have long term vision and sustainability.
Domestic industries are no comparison. The first attack came in soft beverages industry
with Coke acquiring Parle brands and Pepsi acquiring Dukes and with the entry of
Cadbury Schweppes in this sector entire soft drink industry is now in control of MNCs.
MNCs such as Nestle, Brooke Bond and SmithKline & Beechern controlled earlier only
hot beverages (both white and brown segments). But soft beverage sector was dominated
by domestic industries. With Coke and Pepsi acquiring Indian businesses, total non-
alcoholic beverage industry is now under control of MNCs.

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Recently Sara Lee -- a US multinational has acquired Nutrine -- a large Indian bakery and
confectionery business. Britannia is already under control of Danone group of France.
Only large bakery and confectionery left to be acquired in private sector is Parle
Products.

Food Retailing Has Now Become Industry:

Now shopping foods is a pleasurable experienced. Food retailing has come of age -- from
a period when food items were sold in small road side grocer shops & mandis and bazzars
to a stage when food products are retailed through supermarket stores where consumers
can inspect, select and pick up the products they like in a comfortable ambient and still
pay a fair price for the product and the merchandise and sometimes even pay less than the
price they would have paid at the nearest food stores. And the entry of foreign players
like Wal Mark, Woods worth, Tesco and Carrefour will make the choices of the
customers unlimited and they can choose from the wide span of options.

Imported Foods in Indian Market:

Not too long ago for buying imported foods we had to go to select markets -- such as
Modern Bazar, Vasant Vihar in Delhi or Fort in Mumbai. In other places one has to
literally search for such choice food items. In those days importing foods were not
permitted. In the last couple of years these imported foods are available almost in all
leading shops in most of the shopping centres in the city.

Fads in Processed Food Industry: Fashion changes, so also has been seen for
many processed food items which came and gone. Like fashion designers, marketers of
food products translated the ideas and dreams of nutritionists, technologists and investors
to create the demand of new types of food but many of these were shortlived. Investors
rushed to make significant new investment in those processed food industries which
disappeared like fads

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Why invest in Indian food processing sector:

•It is the seventh largest country, with extensive administrative structure and independent
judiciary, a sound financial & infrastructural network and above all a stable and thriving
democracy.

•Due to its diverse agro-climatic conditions, it has a wide-ranging and large raw material
base suitable for food processing industries. Presently a very small percentage of these
are processed into value added products.

•It is one of the biggest emerging markets, with over 900 million population and a 250
million strong middle class.

•Rapid urbanization, increased literacy and rising per capita income , have all caused
rapid growth and changes in demand patterns, leading to tremendous new opportunities
for exploiting the large latent market. An average Indian spends about 50% of household
expenditure on food items.

•Demand for processed/convenience food is constantly on the rise.

•India's comparatively cheaper workforce can be effectively utilized to setup large low
cost production bases for domestic and export markets.

•Liberalized overall policy regime, with specific incentives for high priority food
processing sector, provides a very conducive environment for investments and exports in
the sector.

•Very good investment opportunities exist in many areas of food processing industries,
the important ones being : fruit & vegetable processing, meat, fish & poultry processing,
packaged, convenience food and drinks, milk products etc.

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RATIONALE OF STUDY
According to a study by McKinsey & Company, the Indian food market is poised to grow
two- fold by 2025. Citing the McKinsey study, a report by the US Department of
Agriculture says that the size of the Indian food consumption market is expected to grow
from US$ 155 billion in 2005 to US$ 344 billion in 2025 at a compound annual growth
rate of 4.1 per cent. The steady growth of the Indian economy and the improving lifestyle
of Indians have been instrumental in this growth.

According to industry experts, the market for carbonated drinks in India is worth US$ 1.5
billion while the juice and juice-based drinks market accounts for US$ 0.25 billion.
Growing at a rate of 25 per cent, the fruit-drinks category is one of the fastest growing in
the beverages market. Sports and energy drinks, which currently have a low penetration
in the Indian market, have sufficient potential to grow. They are considered a socially-
acceptable alternative to alcoholic beverages.

The market for alcoholic beverages has been growing consistently. 'The Future of Wine',
a report on the state of the wine industry over 50 years, prepared by Berry Bros. & Rudd,
one of the oldest, independent wine merchants in Britain, suggests that the market for
wine in India was growing at over 25 per cent per year.

Packaging industry thus offers an effective solution to the food industry and also provides
a much needed boost to the overall development of the industry.

The budget announced lately has brought good news to the packaging industry and
positive outcome is anticipated. New plants and facilities are coming up in beverage cans,
cartons, flexible packaging, corrugated fibre board and to support them we have new
manufacturers of ink, adhesive and suppliers of software and printing technologies and
the equipments.

Packaging, a solution for food safety & quality

Food safety, quality management & food security has become an area of concern
worldwide.The holistic concept of food security, however, has two dimensions – availability of food and
access to food. While the former has been achieved, the same is not the case with the latter. Despite bumper
crops, distribution of food grains continues to be faulty – almost 30% of the food produced in the country is
wasted. In such a scenario, it is important for us to reorient our historical agricultural policy framework –
from managing shortages to promoting efficiencies and value addition.

Despite food production in the country is expected to double by the year 2020, not much
attention has been given to the growth of this vital industry, with no standard publication
highlighting the importance of this sector.

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The food processing industry is witnessing a 20% annual growth rate and, consequently,
the demand for processed foods and beverages in the country is constantly on the rise.
There are 300 million upper-and-middle-class consumers of processed and packaged food
in the country, and another 200 million are expected to shift by 2010.

Packaging of food products has become important in order to ensure safety and hygiene
and to eliminate the possibility of adulteration. In some cases, more than 50% of the price
of a product goes towards packaging. Good packaging will greatly catalyze the
development of a food-processing sector. However, packaging industry is yet to achieve
international standards in the country.

Rising affluence and lesser time to spend in kitchens has resulted in more incidence of
eating away from home. India is a well-known country for diversity in its culture and
traditions, which is also seen in food habits ranging from delicious spicy South Indian
curries to mouth watering Bengali sweets

Food safety concerns and packaging

Protection of the form, shape and texture of inner contents has been the prime purpose
behind packaging food items for years together - much before the concerns of eye-
catching packaging for drawing consumers' attention arose. Now, with growing health
consciousness amongst consumers and stringent food safety norms, the protective
function of food packaging gains evens more significance.

The impact of food contamination goes beyond the expenses incurred on account of
public ill-health caused by food contamination to the long-term damage to food
manufacturers that could be caused by recall condemnation of contaminated food
products. It also imposes costs on the entire economy that mainly include medical costs,
productivity losses from missed work as well as the value of premature deaths. Hence, an
increasing number of food manufacturers are trying to address food safety issues by
adopting high-quality packaging solutions. This has resulted in growing demand for food
packaging that protects food from contamination by micro-organisms and pests as well as
prevents the loss of flavour and odour so as to extend the shelf-life of the contents.

Moreover, in some cases, packaging itself has become a concern for food safety. Certain
packaging components like printing inks, labels, closures, adhesives and seals can affect
food quality. The deterioration of packaged food largely occurs through the transfer of
any of these components into the food or that of the flavours, colours or other food
ingredients into the packaging material. The atmosphere surrounding the food also
influences its shelf-life. For instance, there may be passage of moisture, vapour from a
humid atmosphere into a dried product or that of an undesirable odour from the external
atmosphere into a high fat product. In such circumstances, the choice of proper packaging

21
material, pack form or closure selection becomes even more critical for food safety.

A lot of research has been undertaken for development of packaging material suitable for
different foods and for studying the interaction between food & packaging and the
environmental impact of different food packaging materials.

Innovative packaging solutions & food safety

In past few years, the field of packaging has undergone some innovative product
developments to ensure food safety, and some of the common methods of food packaging
that are used to ensure food safety include vacuum packaging, modified atmospheric
packaging, controlled atmosphere packaging and reduced oxygen packaging, to name a
few.

Vacuum packaging:
Vacuum packaging is widely used to prolong the shelf-life of fresh and perishable food
products such as smoked fish and vegetables. In vacuum packaging, the product is packed
in a low oxygen permeable bag, which is placed in the vacuum machine where air is
mechanically extracted from the package immediately prior to sealing. The process not
only extends shelf-life of food product by preventing growth of bacteria and aerobic
organisms such as Pseudomonas, but also prevents loss of moisture and freezer burns.
However, the removal of oxygen from a vacuum packaged food does not eliminate the
possibility for all bacterial growth. For instance, some pathogenic bacteria such as C
botulinum bacteria prefer low-oxygen environments and hence grow well in vacuum-
packaged food.

Controlled Atmosphere or Modified Atmospheric Packaging (CAP or MAP):

Controlled Atmosphere (CAP) or Modified Atmospheric Packaging (MAP) facilitates
preservation of food without the temperature or chemical treatments that are used by
competitive preservation techniques such as canning, freezing, dehydration, etc. MAP
mainly involves modification of the atmosphere surrounding a food product by vacuum
or a one-time gas flushing and sealing process. In MAP, three different gases - namely,
nitrogen, carbon dioxide and oxygen are used for flushing, either singularly or in
combination. Each of these gases has a different function. For example, nitrogen replaces
oxygen, thereby reducing the growth of aerobic spoilage micro-organisms, while carbon
dioxide is generally used to extend shelf-life of food product by destroying spoilage
micro-organisms. Also, oxygen at reduced levels (around 2-4%) is essential as it provides
additional safety by inhibiting C botulinum.

Besides controlling the combination of gases, the use of appropriate packaging material is
critical while developing MAP. The main characteristics to be considered while selecting
packaging material for MAP include resistance to puncture, sealing reliability,

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antifogging properties, oxygen & carbon dioxide permeability and water transmission
rate. Although a range of packaging materials are now available for production of

MAP, packaging manufacturers still prefer four basic polymers including polyvinyl
chloride (PVC), polyethylene terephthalate (PET), polypropylene (PP) and polyethylene
(PE). In past few years, the demand for MAP has witnessed a sharp surge as it offers
increased shelf-life (in turn, allowing less frequent loading of retail display shelves),
reduction in retail waste, improved visibility, hygienic stackable pack, little or no need of
chemical preservatives and reduction in production and storage costs. Besides MAP,
controlled atmosphere packaging has witnessed an impressive rise in demand.

Active packaging:
The limitations to barrier packaging in controlling the internal environments of food
packages has resulted in growing demand for active packaging as it not only provides a
barrier to outside influences but also senses environmental changes inside the package
and responds by changing its properties. It employs a packaging material that interacts
with the internal gas environment and in certain circumstances even modifies the internal
gas environment (by removing gases from or adding gases to the headspace inside a
package) to extend the shelf-life of a food.

Active packaging mainly includes additives that are capable of scavenging or absorbing
oxygen, carbon dioxide, ethylene moisture, odour and flavour taints. In addition, sachets
containing iron powder and calcium hydroxide, which scavenge both oxygen and carbon
dioxide, are used to extend the shelf-life of ground coffee. Film containing microbial
inhibitors as well as specially fabricated films to absorb flavours and odours or,
conversely, to release them into the package are also finding wider applications. In view
of growing demand for active packaging, several food packaging manufacturers have
undertaken research and development in this area, which has re in development of
innovative active packaging solutions such as 'Rosemary packaging'. Spanish scientists
have recently discovered that extracts of rosemary added to packaging as anti-oxidants
significantly extends shelf-life of meat and keeps it fresh for 14 days under conditions
found in supermarkets. The use of rosemary also increases average display life by about
two days as compared with meat packaged in a traditional modified atmosphere mixture
of oxygen, carbon dioxide and nitrogen gas.

Intelligent packaging:
The introduction of intelligent packaging can considered to be the most impressive and
important innovation in the food packaging segment. It provides a way to monitor and
relay information regarding the status of contents, and then verifies this information.
Today, food packaging manufacturers have developed several innovative intelligent
packages that include time temperature indicators, anti-theft and anti-counterfeiting

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devices, Radio Frequency Identification Devices ( RFID) and transparent electronic
packaging, to name a few.

Other solutions:
In addition to conventional food safety solutions, food packaging manufacturers are
encouraging the development of novel food safety solutions using moisture regulation
techniques, innovative packaging materials and nanotechnology. Moisture regulation
technology developed by food packaging manufacturers maintains humidity at a desired
level by releasing or absorbing moisture as needed so as to establish equilibrium relative
humidity (ERH). For example, desiccant is one of the most popular and widely used
devices for protecting food from moisture. It is a cost-effective tool and absorbs any
ambient moisture in the package, either released by the product itself, or caused by
condensation process. There are various types of desiccants such as silica gel, clay
desiccant, calcium oxide and calcium sulphate that are available in various formats
ranging from packets, bags, canisters, tubes to desiccant stoppers. Currently, various
moisture regulation solutions including desiccants are used in a wide range of food
products including bakery products, dried meats, fruits and certain types of confectionary
products (like nougats and caramels) that require a certain level of moisture to maintain
texture and mouth feel. Moisture regulation technology can also be combined with
oxygen scavengers which provide protection against both moisture and oxygen mediated
degradation.
In addition, food packaging manufacturers have introduced several novel packaging
materials and coatings to address food safety issue. For instance, the development of
innovative edible films and coatings have enabled food packaging manufacturers to
regulate the transfer of moisture, oxygen, carbon dioxide, lipids, aroma and flavor
compounds in food system, in turn extending the shelf-life of food. Also, in order to
further enhance the food stability, quality, functionality and safety, the new edible films
and coatings are equipped with functional ingredients such as anti-oxidants, anti-
microbials, nutrients and flavors.
In recent years, a number of food packaging manufacturers are using nanotechnology to
improve the permeability, barrier properties, mechanical and thermal resistance of the
film packaging material. It is also been used for developing active anti-microbial and
anti-fungal surfaces as well as allowing food packages to sense and record the
microbiological and biochemical changes in the product. Realizing the growing demand
for nano products (for example, nano-composites and nano-clays) with improved barrier
properties, food packaging manufacturers are investing a significant amount of time and
money to undertake research and development activities in these areas. This has resulted
in development of several innovative packages packaging materials which primarily use
nylon nano-composites and nano-clays as they significantly improve the barrier
properties of packaging material while retaining most of its existing favorable
characteristics. The recent development of nylon 6 with 2% nano-clay can be the case in

24
point. The new material has three times the oxygen barrier property than in unmodified
nylon. Further, the cast films of nylon 6 nano-composites reduces oxygen transmission
rate by upto 50%. It has also shown an increased resistance to other gases, chemicals,
flavors and odours.

Besides improving food safety properties of packages, the identification of a product that
may have been tampered with or unintentionally damaged in some way during production
or transportation is critical for food safety. As a result, food manufacturers are using a
variety of tamper-evident packaging such as vacuum-sealed pop-tops and special seals to
indicate if a food package has been damaged or tampered with

Role of food safety regulations

In addition to constant innovations in food packaging segment, government regulations
have played a key role in ensuring food safety. For instance, the US Bioterrorism Act of
2002, which applies to majority of companies in the US that manufacture, process, pack,
distribute and receive food products, is playing a major role in addressing food safety
issues in the US. The regulation is mainly based on the capability to track (farm to fork)
and trace (fork to farm) product details, per product and or per lot. This apart, in order to
ensure hygienic conditions at food manufacturing sites, countries across the world have
introduced an international standard called Hazard Analysis Critical Control Point
(HACCP).

The way ahead

In recent years, food safety is receiving increasing attention from manufacturers
worldwide. However, certain issues such as scalping and transfer of components still pose
major challenges to manufacturers during development of new packaging materials and
therefore needs to be further addressed. Hence, in the near future, the key research area in
the food packaging segment would be to understand the dynamics of release and or
absorption of the various food components (such as flavor and odour) or package
components. Also, food manufacturer are engaged in development of packaging materials
with a range of permselectivity magnitudes for improvement of shelf-life of variety of
products. Moreover, the development of packaging materials with high permselectivity to
manufacture controlled atmosphere packaging for fresh produce is underway.

In addition to the development of packaging materials with optimized permeation rates,

manufacturers are trying to replace existing packaging materials with new materials that
maintain high-barrier properties with changing temperature and humidity.

25
■ Biological Pathogens viz; bacteria, viruses, parasites, etc
■ Naturally occurring toxins viz; mycotoxins, ciguatera toxin, paralytic shellfish poison,
etc
■ Dietary supplements viz; ephedra
■ Pesticide residues
■ Toxic metals viz; lead and mercury
■ Decomposition and filth viz; insect fragments
■ Food allergens viz; eggs, peanuts, wheat, milk, etc
■ Nutrient concerns viz; vitamin D overdose, pediatric iron toxicity
■ Dietary components viz; fat and cholesterol
■ Product tampering

The leaders in Food packaging are:

Nestlé
For the last couple of years, Swiss-based food giant Nestlé has been busily adding to its
already diverse product portfolio. This activity, which touches on several of Nestlé's
major product lines, has helped keep Nestlé at the top spot, by far, in Food & Beverage
Packaging's list of food processing companies. Nestlé is one of the world's most diverse
food companies, with products that include candy, pasta, pet food, frozen meals, ice
cream and more.

Kraft
The company's status as a purveyor of middle-market foods puts it squarely between two
powerful forces. Rising prices for commodities like milk and flour, as well as for
packaging, has put pressure on Kraft from the supply end. But ever-present private-label
competition in mainstay categories like cheese, crackers and processed meats have
prevented Kraft from passing along these price increases too readily. Luckily, Kraft also
is poised to benefit from a positive trend for the processed food industry as a whole.

Unilever
Even by the standards of mega-food companies, Unilever is extraordinarily diverse, with
a product portfolio that ranges from ice cream to powdered soup. Unilever reported $27.9
billion in food sales in 2007, an increase of 18% over 2006 and enough to vault into third
place in Food & Beverage Packaging's list of top food companies. As one of the world's
biggest food companies, Unilever has found itself squarely in the middle of the two
biggest issues facing the industry today: prices and sustainability.

26
The leaders in Beverages packaging are:

Coca-Cola
Coca-Cola Co. has made its way to the top as Food & Beverage Packaging's No. 1
beverage packager in the world. Coca-Cola is the world's largest carbonated soft drink
manufacturer, responsible for 1.5 billion beverage servings consumed worldwide daily.
The non-alcoholic beverage industry is highly competitive.

Coca-Cola is also building the world's largest plastic bottle-to-bottle recycling plant, in
conjunction with United Resource Recovery Corp, which is expected to be operational in
2009. It will produce about 100 million pounds of food-grade recycled PET for reuse
each year, the equivalent of nearly two billion 20-ounce bottles

Nestlé
Though the company is known more for its food products, Nestlé is a major player in the
beverage market. As the No. 1 bottled water company in the world, Nestlé owns 15
brands of water, including Nestlé Pure Life, Poland Spring, Arrowhead, Deer Park, Ice
Mountain, Ozarka and Zephyrhills, as well as imports brands such as Perrier and S.
Pellegrino.

InBev
The company has three long-term objectives-which focus on execution in the
marketplace, brand-building and consumer insight-generated innovation-are intended to
strengthen its standing.

KEY TRENDS IN THE PACKAGING INDUSTRY IN INDIA

Glass out, PET in
Glass packaging is believed to add status and value to a product hence it is used only in
premium material with high quality, especially alcoholic beverages and fragrances. In the
foods market, glass bottles are best suited and hygienic for products that contain reactants
like tomato ketchup, herbs and spices. Glass was the second largest material used for
packaging, but it is losing because of inconvenience and breakage. Instead, PET bottles
are gaining immense popularity in India, as they are thinner, lighter, and easier to handle
offering high resistance to breaking.

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Demand drives for liquid cartons
There is demand for liquid cartons since the packaging allows long shelf life, allows
preservation of the original taste and flavour and also allows the juices to be stored
without refrigeration. Liquid cartons also make it possible to transport the perishable
products across long distances, and juices of seasonal fruits can be made available to the
consumer throughout the year. Therefore, the growth rate of liquid cartons has been
impressive during the review period, and is expected to grow further in the coming years.

Sachets popular in rural India

Sachets were introduced to widen the market for powder concentrates specially in
beverage market to woo the price conscious consumers. Morepen Laboratories first
introduced C-Sip in 10g sachets in early 2002. The success saw the launch of Sunfill 25g
sachet from Coca-Cola India; Fruit Kick sachets from Hindustan Lever and finally Tang,
in a lower priced single-serve sachet of 25g from Kraft Foods.
Thus, packaging has become an important aspect and puts various brands on toes as
people buy the most appealing pack from the outlet. Constant innovation means use of
new technologies, which over the time has helped local business attain mark in global
market.

Flexible packaging dominates due to low costs

Flexible packaging dominates the food packaging being used for a variety of food items
ranging from milk, biscuits, and vegetable oil to rice. Fresh/pasteurized milk is one of the
main end-use applications for flexible packaging. Bakery product was the other sector of
note using flexible packaging, mainly flexible paper. The retail price of the products is
kept low by using lower priced plastic pouches.

Aseptic Packaging tech. for healthier beverages

The heart of the aseptic process is to sterilize the product and package. Individually, to
fill the product in the package and to seal it in a sterile environment without the product
being reinfected by micro organisms. The Ultra High Temperature treatment (UHT)
processing ensures minimal loss of nutrients and essential vitamins ensuring practically
"Zero Bacteria" product. Tetra Aldose® S is a patented process designed specially for
aseptic dosing of additives into aseptic solutions. The package sells what it protects and
protects what it sells. Product safety, hygiene, shelf-life, logistics, ecology and cost
efficiency are great advantages offered by aseptic carton packaging. An aseptic package
keeps the 'bad' (light, oxygen, bacteria) and keeps in the 'good' nutrition value, vitamins,
and taste

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Packaging of beverages
The beverage industry is one among the front-liners where massive investments are being
made for expansion and technological up gradation. The packaging of beverages both
carbonated and non-carbonated, is a complex technological branch in the Food
Processing /Packaging industry. The traditional returnable glass bottle has given way to
newer plastic containers as well as cartons. The current trend is to improve the
conventional containers, extend their share in the large market, extend the shelf-life of the
products, provide greater consumer convenience and ultimately to produce economic
packages. The changing Indian scenario, with implementation of various technologies
and market promotion activities, has changed the scope for this industry exponentially.
The Indian soft drink market is worth Rs. 21,600 million a year with a growth of around
7%. The soft drinks segment is expected to grow to Rs. 1,05,000 million by the year
2005. The production of soft drinks has increased from 6230 million bottles in 1999-2000
to 6560 million bottles during the year 2001-2002. Tetra pack drinks market is currently
growing at the rate of 10% with a total market share of 48%. The alcoholic beverages
industry covers Indian Made Foreign Liquors (IMFL), country liquor and beer. IMFL
includes Carbonated Beverages in PET Bottles wine, whisky, gin, rum, brandy and other
white spirits. IMFL industry in India is roughly valued at Rs. 28,000 crores, growing at a
rate of 9-10% per annum in volume terms. The Indian beer market estimated currently at
Rs. 7,500 million a year has been growing at the rate of 15% per annum.

The packaging requirements for all types of beverages are:

• Absolutely leak-proof and prevent contamination

• Protect the contents against chemical deterioration
• No pick up of external flavours
• Be hygienic and safe
• Retain carbonation in the case of carbonated beverages
• Economical, easy to use and dispose
• Good aesthetic appearance

Product Characteristics & Packaging Materials for Non-Alcoholic

Beverages:
Non-alcoholic beverages are further classified into non-carbonated and carbonated drinks.

Non-Carbonated Drinks

Fruit Beverages
These include fruit juices, fruit drinks, and fruit nectars. They contain fruit juice, water,
sugar, dextrose, invert sugar etc. The major deterioration that occurs in fruit beverages is
loss of nutrition, physico-chemical changes and microbial growth. The product
characteristics to be considered in relation to packaging are:

29
Acidity: All the fruit juices usually maintain an acidic character because they contain
organic acids.

Enzymes: Enzymes exist in all fruit juices. Sometimes they have to be destroyed and
sometimes to be added.

Vitamin C (ascorbic acid): The Vitamin C content of a fruit increases until just before
ripening, and then decreases due to the action of an enzyme, ascorbic acid oxidase. When
fruits are cooked, most of the ascorbic acid transfers from the tissue into the liquid or may
be oxidized, oxidation occurring more easily in iron, copper or badly tinned vessels.
Losses of Vitamin C also occur during storage. Storing at low temperature, and
preventing contact with air and light reduces this. Addition of sulphite has a preserving
effect on Vitamin C.

Colour and Flavour: They are very important, and many fruit drinks contain certain
legally permitted colourings. These are added to overcome the bleaching effect of the
sulphite used as a preservative, and to provide an attractive appearance.
Spoilage of fruit juices is mainly due to yeast. Its growth depends upon the temperature.
Spoilage of raw fruit juice at room temperature results in alcoholic fermentation,
followed by the oxidation of alcohol and fruit acids by yeasts or moulds growing on the
surface. Hence every living yeast cell must be removed or suppressed by pasteurization,
filtration and/or preservatives.

Key parameters to be considered when selecting a packaging system are:

• Process
• Distribution, shelf-life requirements, legislation
• Product composition and quality as produced and at full shelf-life
• Product protection required during storage, distribution and retail sale
• Pack size, printing options, display etc.
• Packing system concept, automation options, ability to integrate with existing
and/or future systems
• Consumer appeal, image of product and packing

The different packaging materials used are:

Glass Containers: The use of glass bottles for the packaging of fruit beverages was
wide-
spread although the hot-fill/hold/cool process had to be applied with care to avoid
breakage of the containers. Glass is still the preferred packaging medium for high quality
fruit beverages. However, over recent years, an increasing proportion is being packed
aseptically, into cartons.

The improvements that have occurred in glass bottle packaging are:

30
 • Light weight
• Surface coating to increase abrasion resistance
• Use of wide mouth containers fitted with easy-open-caps.
Metal Containers: Tinplate cans made of low carbon mild steel of 99.75% purity, coated
with tin with easy open ends are used. These tinplate containers are either 3 piece or 2
piece containers. They are lacquered internally to prevent corrosion.

Plastic Containers: Fruit juices contain organic substances, which are sensitive to
bacterial contamination. Packaging of such products is done through hot filling, to
achieve extended shelf-life, PET bottles are usually used for hot filling applications.
Special features are added to the containers through design and manufacturing process.
The package is heat-set in order to improve the temperature resistance of the containers.
PET resins with a higher Tg (glass transition) temperature and/or a faster rate of
crystallisation are used

Aseptic Packages: Ready to serve fruit beverages and fruit pulps / concentrates, packed
in aseptic packages provide excellent protection for fruit juices / pulps. These aseptic
packages are made by combining thermoplastic with paperboard and aluminium foil.
Their multi-layered construction enables the carton to protect the contents from various
factors responsible for spoilage. The aluminium foil layer is a strong barrier for O2 and
light.

Other major causes of an upsurge in the area of packaging are as follows:-

Changing consumer habits

The changing consumer habits help spur growth of packaging materials. Life of an
average Indian family has became hectic as there are more and more women entering the
corporate world and with middle-income families rising up the income ladder. Women
have less time to spend in kitchens and are not willing to perform time-consuming
elaborate meals as daily routine. This has resulted in a booming market for convenience
products, both in the foods and non-foods sectors. There is a growing market for ready-
to-eat microwave-able food items; light, convenient packing materials; easy-to-pour
dispensing caps etc.

Economy growth
The Indian economy is enjoying an upward trend in growth rates, which has proved to be
beneficial for the consumer goods market, with more products becoming affordable to a
larger section of the population. Some of the products that were considered luxury items a
couple of years back, are becoming items of daily consumption on most households.
Some such products are 100% juice drinks, UHT milk.

31
Changing hygiene and health consciousness
As health consciousness is rising, Indians move towards packaged, branded products
rather than the unpackaged formats. Even the common man is becoming conscious about
the quality of water, the standard of cooking oil, calorie intakes etc. And PET bottles are
preferred in the bottled water sector, with a significant shift from loose unbranded low-
quality cooking oil to PET and HDPE bottles. More and more consumers are also
realising the need for nutritive drinks, showing a preference for juice drinks, 100% juices,
milk drinks against carbonates or concentrates, thereby pushing up demand for liquid
cartons.

Frozen food packaging : Anticipating immense potential

Frozen food packaging is projected to reach $6.5 billion in 2011, aided by heightened
demand for convenience-type foods, among both, consumers and food service
establishments. Demographic trends such as smaller household sizes, the aging of the
population and rising numbers of households where all adults work, will boost demand
for convenience foods, including frozen products. These foods often use more packaging
relative to their volume. Moreover, increased spending for meals eaten or prepared away
from home will bode well for frozen food packaging as the foodservice industry relies
heavily on frozen foods.

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OVERVIEW OF INDIAN BISCUIT INDUSTRY

The annual production of bakery products which includes bread, biscuits, pastries, cakes,
buns, rusk etc is estimated to be 60 lakh tonnes in 2004-05 with estimated value of Rs.85
billion. The two major bakery industries, viz., bread and biscuit account for about 82 per
cent of the total bakery products. The organized sector has a market share of 45 per cent
and the balance 55 per cent is with the unorganized sector in the baked products.

In India right now bakery industry is booming next to information technology. Presently
all the IT offices such as BPO, call centres, data entry centres has started supplying food
in the work spot as it has become a necessity since their work timings and schedule varies
according to the project undertaken. Bakery products which use maida as a major raw
material for most of its varieties is highly preferable as they are highly nutritive, easily
digestible and readily available in wide choice preferred by many.

The large organized sector players who are prominent in the high- and medium-price
segments include Britannia, ITC, Parle Foods, Priya Gold Biscuit and Modern Industries
Ltd. Brands like Modem are major players in the biscuit market.

Biscuit Industry:

In the biscuits industry, the large organized sector players who are prominent in the high-
and medium-price segments include Britannia, Parle and Bakeman. The major brands of
biscuits are Britannia, Parle, Bakeman, Priya Gold, Elite, Cremica, Dukes, Anupam,
Horlicks. Within the sector, Britannia has become aggressive with its Tiger brand with
variants to compete with Parle's Parle-G in the glucose biscuits category which is largest
selling Glucose biscuit in the world.. Britannia and Parle dominate in branded biscuit
segment, the report pointed.

The Surya Food and Agro Private Ltd with its Priya Gold brand has come out of the local
fold. ITC Foods Ltd has expanded network and is promoting its Sunfeast biscuits across

33
1000 schools in the country. Foreign players like United Biscuits and McVities have also
entered the fray. However, these players have concentrated themselves in the super-
premium and premium segments. The companies have added new variants into the
existing brands as done by Britannia in Good Day ; Parle G in Hide & Seek with addition
of flavors like butter, badam, pista and cashew; HLL in Kisan Grudy biscuit.

Britannia, which is a market leader in the top end, has been trying to make a dent into the
mass market segment with the Tiger brand with more emphasis to tap the rural market.
Parle is doing the opposite, trying to break into Britannia's strong hold with its popular
Parle-G brand.

The per capita consumption of biscuits in India is about 1.52 kg as compared to more
than 12 kg in developed countries. Besides the two major players, Parle and Britannia, the
state-level markets show the presence of strong regional players such as Bakeman, Priya
Gold, Shalimar, Windsor and Champion - brands present in almost all markets.

Biscuits' packaging has undergone a swift transformation. From Britannia's functional

protective blister wraps, which prevent breakage, to Parle's stylish offering packaging has
been completely transformed. Major players are now trying to differentiate their brands to
reflect their superior quality through superior packaging, the study revealed.

The sectors that have recorded a high growth rate between 10 per cent to 20 per cent
during 2004-05 in bakery segment include bread, cakes and pastry. Sectors like bread
have recorded moderate and single digit growth. The sectors that are projected to achieve
high growth between 10 to 20 per cent in 2005-06 in bakery segment include bread,
cakes, pastry which is expected to achieve up to 11 per cent growth and biscuits over 13
per cent.

34
 LITERATURE REVIEW

Processed food industry:

Among the various industrial sectors, food processing is somewhat unique in that, unlike
others, it covers a fairly broad spectrum of products based on a wide range of raw
materials from agriculture. Horticulture, plantations, animal husbandry and fisheries. As
much, for a country like India, endowed with diverse climate regions and a long coastline
and producing a variety of crops, fruits, vegetables, flowers, livestock and seafood, this
sector has not only a great potential but is also of significance in improving the rural
economy.
In fact, food processing as sush is not new in India. It has been carried on for centuries
but by adopting low-cost homegrown technologies. Conversion of paddy into rice,
production of atta from wheat, preparation of pickles from mangoes, lemons etc., baking
of bread and biscuit and making of fruit juices are a few examples. However, in the early
1980s the Government of India felt the need for sustained and organized efforts to give a
boost to this sector, with the twin objective of reducing wastage of, and adding value to,
farm produce and setting up an exclusive Department of Food Processing Industries in
the Ministry of Agriculture.

From all accounts the initiatives taken since then have led to a positive growth in this
sector. This is evident from the number and variety of bakery and confectionery products,
snacks and drinks available in the market under different brand names and from the
increasing interest evinced by private entrepreneurs in this sector. Still, as against the
potential, the present level of processing is admittedly too low. Right now only two
percent of the fruits and vegetables produced in the country are now processed, as
compared to 30 per cent in Thailand, 70 per cent in Brazil, 78 per cent in Philippines and
80 per cent in Malaysia. The value addition in the food sector in India is a mere 7 per
cent. The output of fruits and vegetables is projected to increase substantially in the
coming years. Currently it constitutes 6.6 percent of total food grain production and this
figure is expected to reach 80 per cent by the year 2010.
Now there is huge increment is expected in food processing from 2% to the 10 per
cent by the year 2010 and 25% by the year 2025 thanks to the government policies
initiated by the food ministry.

“Set for a quantum jump- The development of the food processing sector assumes
importance in the context of the liberalized global trade regime under the WTO
agreement----B. S. Padmanabhan (Noted critic), The Hindu 2006.

35
Liberalization has brought in through the entry of large multinational and transnational
corporations, foreign investment in this sector. This resulted in competition, technological
upgradation and market expansion. In the face of the competition, domestic Industries are
gradually losing market share and thus selling their businesses to the new entrant MNCs
well before the value of the brand and businesses drops further due to ongoing onslaught
of multinational brands. This is happening because MNCs have much eater resources to
put behind their brand and business and also have long term vision and sustainability.
Domestic industries are no comparison. The first attack came in soft beverages industry
with Coke acquiring Parle brands and Pepsi acquiring Dukes and with the entry of
Cadbury Schweepes in this sector entire soft drink industry is now in control of MNCs.
MNCs such as Nestle, Brooke Bond and SmithKline & Beechern controlled earlier only
hot beverages (both white and brown segments). But soft beverage sector was dominated
by domestic industries. With Coke and Pepsi acquiring Indian businesses, total non-
alcoholic beverage industry is now under control of MNCs.

Recently Sara Lee -- a US multinational has acquired Nutrine -- a large Indian bakery and
confectionery business. Britannia is already under control of Danone group of France.
Only large bakery and confectionery left to be acquired in private sector is Parle
Products. And with the entries of confectionery giants like Perfetti, Wriggly and
Agrilimen (a Spanish confectioner in joint venture with Dabur but in the process of
acquiring Dabur's equity to have 100% control) confectionery and bakery sector, will also
become the domain of MNCs.

With Nestles' strong presence in Tomato Ketchup and Pickles and Hindustan Lever
acquiring Kissan and Dipy brands from UB group through Brooke Bond route fruit and
vegetable sector is also dominated by multinationals.

Heinz, the world's largest Tomato Ketchup manufacturer had acquired food business of
Glaxo. Due to strategic restructuring of portfolio Glaxo decided to divest their dairy
business with established brands like Complan, Glucon-D and Farex. Hindustan Lever,
on the other hand, through a strategic alliance route, took control of Kwality Ice-cream as
well as 100% Ice-cream brand of Jagatjit. Hindustan Lever with their own presence in
dairy sectors, and with the introduction of Baskin Robbins and Walls has emerged as a
dominant player in dairy segment, in general and Ice-cream segment, in particular.
Hindustan Lever (HLL) also acquired Dollop Ice-cream brand from Cadburys'. HLL,
however, recently announced their intention to sell-off their Dairy unit in UP. Ice-cream
industry, which is reserved for small-scale sector, has now been in the control of
multinationals through a different route. The argument that ice-cream is actually a frozen
dessert -- a nomenclature that has been accepted by both food and law ministry of Govt.
of India -- paved the way for Hindustan Lever for this strategic acquisition. The earlier
successful domestic businesses such as Dalmia Dairy.

36
National Dairy Development Board (NDDB) with its strong brand Amul and with its
deep root extended up to farmers level as a means of backward integration will of course,
remains a significant force to reckon with. But nobody will deny that in branded dairy
products Amul has to put up a constant fight against multinational brands. Vadilal is also
a significant player in ice-cream but their presence is limited in Western India and for
how long they will remain has to be seen. Kraft Foods a unit of Phillips Morris is holding
a license to set up 100% owned entity and they are expected to come and set up their
operation anytime. There are a lot of other Brands like Knorr and some other have also
ventured because of the openness of the government policy.

“Globalization has changed the Indian Processed Food Industry’s scenario by

bringing in the World’s best known multinational brands. ------R. Seshasayee,
president, Confederation of Indian Industries, 2006.

Shopping foods is no longer a strenuous and uncomfortable affair. Instead, it is a

pleasurable experience. From simple trading activity, food retailing is now graduating to
a status of an industry. Food retailing has come of age -- from a period when food items
were sold in small road side grocer shops & mandis and bazzars to a stage when food
products are retailed through supermarket stores where consumers can inspect, select and
pick up the products they like in a comfortable ambient and still pay a fair price for the
product and the merchandise and sometimes even pay less than the price they would have
paid at the nearest food stores.
And since the Wal Mart’s shown interest in the retail venture in India with its
partner Bharti Group the scenario has gone under further changes. Now the availability of
Processed Foods will be much easier for the company and the benefits will be equally
reaped by the Consumers who can get fresher foods available at the big retail outlets at
cheaper price. The bargaining made by the retailers will be further driven to the end
users.

“Changing Face of Processed Food Industry stimulated by the consumer’s improved

life standard in India "-Dr. Rajat K. Baisya , Ph.D. degree in Engineering and
management education,2006.

Technology and research play very vital role in the development of Processed Food
Industry and the role of technology and research can not be ignored since the consumers
are price conscious and they are equally quality conscious, so company must ensure the
quality of the product which can only be possible with the help of latest updated
technology.

Those who have ventured a little ahead thus incorporated process conditions
standardizations to improve product quality. Nothing therefore happened in terms of any
major breakthrough in process technology in India. Whatever little we have seen in new

37
product development and product quality upgradation is the result of the efforts on the
part of the industry largely triggered from the need as a survival strategy in the face of
competition.

Another factor that has marked the failure of food research activities in India to create
any dent in terms of value addition in the processing and technology is due to the fact that
there was little or no collaborative efforts between industry and research institutions. The
mutual mistrust and lack of confidence on the part of the industry leaders on the ability of
the institutional research to deliver value has increased with the passage of time. As a
result, researchers have ventured into their own chosen subjects while industries have
decided to go it alone. Formation of an independent Ministry of Food Processing Industry
which has now been reduced to the status of a department did not help change this
scenario.

“Technology is playing its role to ensure quality in Processed Food Industry”

Prof. V. Subramaniam, first Director of CFTRI (Central Food Technological

Research Institute), 2006.

Today Market is driven by the consumer’s choice and marketers accordingly change their
product type to meet the need of the customers. Although there are four types of Biscuit
products consist of --hard biscuit, cookies, crackers and wafer. Consumers, however,
generally choose biscuits by their brands not by the type. Producers generally produce
more than one type of biscuit. They produce almost all type to suit various market
segments
At a time when growth rates for most FMCG products has wound down to single digit,
Biscuit companies have managed to sustain a fairly healthy growth in its sales revenues
Leaving the product aside what marketer are trying to do is- they are differentiating the
product on the basis of packaging type. Some one is trying to differentiate on the basis of
colour and someone is trying to differentiate on the basis of design. Apart from these
ways they are also trying to differentiate the product on the basis of the information they
are providing to the biscuit consumers.

“Changing days of biscuit packaging- Sabyasachi Samajdar, Head,The Federation of

Biscuit Manufacturers of India (FBMI),2006

Growing packaged food industry has forced company to go on acquisitions mode and the
big FMCG giants are going accordingly and they are on the vast acquisition mode. And
the same way Indian FMCG giant like ITC are on the large expansion mode to acquire
the more packaged food under its kitty.

38
Consumer’s improved life standard and their earnings are making the packaged food
business more demanding and challenging. And for the big giants like ITC and HLL cost
of the acquisition does not bother them at all.

“I have an open mandate for acquisitions, and for a company like ITC, money to
buy companies is not an issue," Ravi Naware, divisional chief executive (foods), ITC,
2006

RESEARCH ITINERARY

“A study to analyze the significance of Packaging in Biscuit Industry”

Key objective
To analyze the relevance of packaging in Processed Food Industry with special
reference to Biscuits.

Sub Objectives:

1. To assess the current state of affairs in the packaged food industry taking
biscuits as example.
2. To highlight the importance of Packaging.
3. To study the degree of influence packaging has on consumer’s buying
behavior.

Hypothesis of Research
Null Hypothesis H0: Packaging is not that significant a factor if we look at the processed
food industry (Biscuits as example)

Alternate Hypothesis H1:The packaging in Processed Food Industry (Biscuit as

example) plays significant relevance in terms of influencing consumer behavior

39
 RESEARCH METHODOLOGY

Type of Research
Descriptive Research
Sample size
150 (From a population of Consumers) + 50(From a population of Shopkeepers)
Sampling technique
Random sampling

Data collection techniques

1. Data Collection Method:

1.1. Primary data:

The core findings of the project are based on the information collected through primary
data i.e.: information collected directly through respondents (Consumers).
Two questionnaires were prepared one for the population of consumers and the other one
for Shopkeepers, which were in accordance with the research objective. It contained both
close-ended questions and some open ended questions.

1.2. Secondary data:

Secondary data were collected through websites, magazines, newspaper articles, periodic
journals.

2. Field Work:

The survey for this project was limited to Delhi NCR region. The survey was conducted
in various residential societies, shopping malls and other grocery shops. During this field
work, various respondents were personally interviewed to obtain their views about
packaging and to know their choice and preferences about the packaging impact.

40
 ANALYSIS OF THE RESEARCH
This analysis has been done on the basis of the questionnaires filled by the customers and
consumers of different age group. There were two different questionnaires, out of which
one was meant for the consumers/customers and the other was meant for the shopkeeper
so on the basis of each questionnaires the behavior and perception of both consumers and
shopkeepers can me measured.
The following analysis has been done on the basis of questionnaires meant for
consumers/customers. The analysis based on the questionnaires meant for the
shopkeepers has been given in the later half of the analysis.

Analysis of the Research based on the questionnaire (Consumers/Customers):

Profession of the respondents:

Profession of Respondents

Valid Cumulative
Frequency Percent Percent Percent
Valid Housewife 6 4.0 4.0 4.0
Student 73 48.7 48.7 52.7
Businessman/Busine
4 2.7 2.7 55.3
sswoman
Engineer 15 10.0 10.0 65.3
Others 52 34.7 34.7 100.0
Total 150 100.0 100.0

Inference: The sample size for this research purpose has been taken of 150
respondents which consists of various professions. The value assigned to five
different categories with housewife, student, businessman/businesswoman, Engineer
and others. Others mainly consists of managers, BPO executives, doctors and a few
unemployed people.

41
 Age Group of the respondents:

Age Group of the respondents:

Valid Cumulative
Frequency Percent Percent Percent
Valid 0-14 9 6.0 6.0 6.0
15-19 30 20.0 20.0 26.0
20-29 79 52.7 52.7 78.7
30-39 24 16.0 16.0 94.7
=>40 8 5.3 5.3 100.0
Total 150 100.0 100.0

6.00% 6.67% Age of Responde nt

0-14
15-19
14.00%
20-29
18.67%
30-39
=>40

Pies show percents

54.67%

Inference: The respondents consist of all age group right from 0-14 years to 40 years
and above. But, the major chunk of the respondents account in the age group of
20-29 years which mainly consists of students and young professionals.

42
Income Group of the respondents:

Income of the Respondents/Parents (In Lakh Rs.)

4.00%
0-2.99lacs
3-4.99
5-9.99
23.33%
=>10
38.00%
Pies show percents

34.67%

Inference: The income group of the respondents mainly consists of 0-2.99 lakhs that is
because of the respondent mainly consists of age group of 20-29 years who are young
professionals.

43
 Analysis based on the questionnaire filled by Consumers:

Question no 1: What do you prefer for having as snacks?

a. Biscuit b. Indian traditional confectionaries

Preference of Snacks:

Bars show percents

60%

40%

20%

63% 37%
0%

Biscuits Other traditional Indian food

Inference: 63% of the respondents go for biscuits while rest 37% prefer other type of
snacks.

44
Question no 2: Which of the following biscuits do you prefer? [ Rank on the scale of 1
(least preferred) to 6(most preferred)]

a. Glucose b. Flavored c. Salted d. Cream e. Cookies f. Rusk

Cross tabulation between:

Age of the Respondent and preference of Glucose biscuit

Least Neither Somewhat Comparatively Extremely

Preferred Bearable Yes nor No Preferred preferred Preferred Total
Age of 0-14
Respo 1 5 2 0 0 2 10
ndent
15-19 1 4 6 10 4 3 28
20-29 20 12 9 18 9 14 82
30-39 0 3 2 8 5 3 21
=>40 2 2 3 2 0 0 9
Total 24 26 22 38 18 22 150

Age of Respondent and Preference of Flavored biscuit

Least Neither Somewhat Comparatively Extremely

Preferred Bearable Yes nor No Preferred preferred Preferred Total
Age of 0-14
Respo 0 0 2 4 2 2 10
ndent
15-19 4 3 6 3 6 6 28
20-29 4 11 21 16 22 8 82
30-39 0 4 7 1 4 5 21
=>40 1 0 2 2 3 1 9
Total 9 18 38 26 37 22 150

Age of Respondent and Preference of Salted biscuit

45
 Least Neither Somewhat Comparatively Extremely
Preferred Bearable Yes nor No Preferred preferred Preferred Total
Age of 0-14
Respo 5 0 0 3 2 0 10
ndent
15-19 3 4 7 4 9 1 28
20-29 6 18 25 13 10 10 82
30-39 1 7 5 4 1 3 21
=>40 1 3 0 1 2 2 9
Total 16 32 37 25 24 16 150

Age of the Respondent and Preference of Cream biscuit

Least Neither Somewhat Comparatively Extremely

Preferred Bearable Yes nor No Preferred preferred Preferred Total
Age of 0-14
Respo 0 1 1 1 4 3 10
ndent
15-19 1 9 2 5 4 7 28
20-29 5 4 6 19 23 25 82
30-39 0 1 0 6 8 6 21
=>40 0 2 1 1 2 3 9
Total 6 17 10 32 41 44 150

Age of Respondent and Preference of Cookies biscuit

46
 Least Neither Somewhat Comparatively Extremely
Preferred Bearable Yes nor No Preferred preferred Preferred Total
Age of 0-14
Respo 0 1 2 2 1 3 9
ndent
15-19 8 4 6 4 5 3 30
20-29 7 19 14 11 11 17 79
30-39 3 5 8 3 3 2 24
=>40 0 1 0 2 2 3 8
Total 18 30 30 22 22 28 150

Age of the Respondent and Preference of Rusk biscuit

Least Neither Somewhat Comparatively Extremely

Preferred Bearable Yes nor No Preferred preferred Preferred Total
Age of 0-14
Respo 4 3 2 0 1 0 10
ndent
15-19 10 4 2 2 3 7 28
20-29 39 17 9 5 5 7 82
30-39 17 1 1 0 0 2 21
=>40 4 1 2 0 1 1 9
Total 74 26 16 7 10 17 150

Inference: Cream Biscuit is most preferable in all age group, out of 150 respondents
44 have preferred cream biscuit while the second preferable option being Cookies with 28
out of 150. Flavored and Glucose biscuits have scored 22 each out of 150 which have 22
respondents each in their favor. While Rusk has 17 while Salted biscuits stands at the
lowest with 16.

Bar chart representing the choice of different type of biscuits by all age
groups:

47
 Customer s preference
5 of glucose biscuit
Preference of Flavoured
biscuit
Preference of Salted
biscuit
4 Preference of Cream
biscuit
Preference of Cookies
biscuit
Preference of Rusk
biscuit
3
Mean

0
0-14 15-19 20-29 30-39 =>40

Age of Respondent

Inference: The above mentioned Graph represents the segregation of the different
preference of the customers of each age group.
Cream biscuit (Green bar) is most favorable to all age groups, while flavored biscuit
(Yellow bar) is the second best choice after cream biscuit while flavored biscuit has
consistency in all the segments. Rusk biscuit (Black) has the poor record with all group
scoring minimum in all age group.

Question no 3: How many times you buy biscuits in a week?

48
 a. Once b. 2-4 times c. 5- 6 times d. > 6 times

4.67% Frequency of buying biscuit in a week

18.67% Once
2-4 times
5- 6 times
24.00% more than 6 times

Pies show counts

52.67%

Inference: Above mentioned pie chart shows the frequency of the consumers going to
buy biscuits in a week. The biggest sector of the pie chart (Light Blue) accounts 52.67
percent which has the frequency of 2-4 times a week.

Question no 4: Which of the following brands whose biscuit you usually consume?

49
 a. ITC Sunfeast b. Britannia c. Parle d. Others- ………….

Most sold brand by shopkeeper

60% Bars show percents

Percent

40%

20%

22% 60% 16% 2%

0%
ITC biscuit Britannia Parle Others

Respondent’s preference of Brand/Company

Inference: Britannia is undisputed leader in the biscuit segment. with 60% (90
respondents). While ITC is trying to be part of the race and stands second with 22% (33
Respondents). Parle is third in the race with 16% while apart from these three players
there are some new players also trying to chase the major players. Others mainly
constitutes of Priya Gold and some other local players.

Question no 5: When purchasing a new type of biscuit what do you consider most?
(Rank on the scale of 1(Least preferred) to 7 (Most preferred).

50
a. Brand Name b. Packaging c. Celebrity Endorsement d. Pricing

e. Availability f. Prolonged uses of the brand g. Flavor

Customer s preference
7 of brand name
Customer s preference
of Packaging
Customer s preference
6 of Celebrity
endorsement
Customer s Prefernece
of Pricing
5 Customer s Preference
of Availability
Cstomer s preference of
Traditional use
4
Mean

Customer s preference
of Flavour

0
0-14 15-19 20-29 30-39 =>40

Age of Respondent

Inference: From the above mentioned graph we get the mixed response in case of the
age group of 0-14 customers preference go in favor of Flavor while they are least
concerned about the price and celebrity endorsement. While brand name, Packaging and
their passively loyal behavior have scored more or less same that is above the 4.5 in the
scale of 7. In the age group of 15-19 people are most concerned about pricing and lest
concerned about the celerity endorsement. In the age group of 20-29 the most preferable
option is Flavor and the least preference area is celebrity endorsement, availability and
their traditional use. In the age group of 30-39 people are more concerned about
packaging and brand name while the 40 and above people give weightage to packaging
pricing and availability.
Further interpretation with the help of Descriptive Statistics:

51
 Descriptive Statistics

N Minimum Maximum Mean Std. Deviation

Customer’s
preference of brand 150 1 7 4.79 1.781
name
Customer’s
preference of 150 1 7 4.73 1.562
Packaging
Customer’s
preference of
150 1 7 2.85 1.961
Celebrity
endorsement
Customer’s
150 1 7 4.29 1.724
Preference of Pricing
Customer’s
Preference of 150 1 7 3.23 1.502
Availability
Customer’s
preference of 150 1 7 3.13 1.840
Traditional use
Customer’s
150 1 7 4.92 2.310
preference of Flavor
Valid N (listwise) 150

Inference: From the above Descriptive table we can easily infer that on the scale of 1-
7, where 1 being the minimum value (Least Preferred) and 7 being the Maximum value
(Most Preferred), Flavor name ranks top with 4.92 , followed by Brand name with 4.79
and then followed by Packaging with 4.73. It means the customers pay more attention to
Flavor of the biscuits, followed by Brand name and then Packaging. Here we can observe
very minor difference between the mean of packaging and brand name it means for the
customer’s point of view brand name and packaging pays more or less same importance.

Biscuit consumers pay comparatively lesser importance to pricing then to availability of

the biscuits, followed by Passively loyalty nature of buying behavior then followed by the
least preference option i.e. Celebrity endorsement.

Question no 6: What sort of packaging do you usually prefer for your biscuit? [Rank
on the scale of 1(least preferred) to 3 (most preferred).

52
 a. Paper Cartons b. Aluminum foil c. Plastic packet

Customer s preference
3 of paper cartons
Customer s preference
of aluminium foil pkt
Customer s preference
of Plastic Packet
2.5

2
Mean

1.5

0.5

0
0-14 15-19 20-29 30-39 =>40

Age of the Respondents

Inference: The most preferable choice for the 0-14 age group is Aluminium foil packet
while the paper carton is the least preferred option in this age group. Again in the
age group of 15-19 the most preferable option is aluminium foil packet. while
plastic and paper carton stand at more or less same place. While in the case of age
groups of 20-29 and 30-39 the most preferable option is plastic packet and the
least preferred option is Paper carton pack. While in case of age group of 40 and
above the most preferred choice is of aluminium foil packet while other two
choices of paper carton and plastic packet are equally preferred by the group.
Question no 7: Apart from the normal 100 gm packet which are other types of packet
you prefer:

a. Mini pack consisting of 2-3 biscuits b. Large family pack

53
 c. Multi flavored pack d. Others …………

Preference of different packaging style other than normal 100 gm. pack

8.00%
14.67%
Mini Pack consisting of 2-3 Biscuits
Large family pack
Multi Flavored pack
Others

45.33% 32.00%

Inference: From the above graph it can be easily inferred that customers are expecting
some changes in the packaging of the biscuit and the 25.33% of the respondents
want to have multi-flavored pack so that they can have all the different flavor
from the same packet at the same price. The second most preferred is Large
family pack as the bigger the packet the cheaper will be the price of the biscuit.
While 14.67 % respondents in the favor of Mini pack of 2-3 biscuits while rest 8%
have opted for other option which mainly consists of a pack of 5-6 biscuits.

Question no 8: While surfing a biscuit packet, what type of information you usually
look for?( Rank on the scale of 1(Least preferred) to 5 (Most preferred)

a. Price b. Nutritional value c. Ingredients d. Manufacturer’s

name

54
 and Address e. Date of Manufacturer/Expiry date

Customer’s preference of Information while surfing

5
Price
4

Female
Nutritional Value
3

2 Ingredients
Mean

1
Manufacturer’s Info

Gender of the Respondents

0
Manufacturing Date
5

2
Mean

1
Male

0
0-14 15-19 20-29 30-39 =>40

Age of Respondent

Inference: Female customers give maximum emphasis on Nutritional value, Price and
they are least concerned about the information about the manufacturers and
Manufacturing date.
But in case of male they look for Price as well as the manufacturing date of the
product they give equally weightage to the nutritional value attached with the
product

Question no 9: Do you think the packaging of biscuit has any bearing on any of the
following factors (You can take more than one factor)[ Rank on the scale of
1(Least preferred) to 5 (Most preferred)]

55
 a. Price b. Quality c. Acceptability d. Shelf life e. Freshness

Packaging Bearings

Female
5
Price
4
Quality
3 Acceptability
Shelf life
2
Freshness
Mean

Gender
5

1
Mean

Male
0
0-14 15-19 20-29 30-39 =>40

Age of Respondent

Inference: When respondents were asked about the bearing of the Packaging on the
five aspects i.e. Price, Quality, Acceptability, Shelf life and Freshness there
response were in the favor of freshness. Then their weightage was on quality and
then shelf life and the least preference was acceptability and price.

Question no10: Have you ever tried foreign made biscuit available in Indian shop?

56
 a. Yes b. No
Customers trying foreign biscuits

Yes
22.00%
No

78.00%

Inference: Out of the total 150 respondents I interviewed just 22% of them tried
foreign made biscuits and 78% respondents never tried foreign made biscuits.

Question no 11: What differences did you find in terms of packaging?[Rank on the
scale of 1(least preferred) to 3 (most preferred).

57
a. More information on the package b. Better packed to retain freshness
c. Others……………

Difference in foreign made Biscuits

3
More informative
Packaging
2.5
Better packed to
Retain freshness

Other Attributes
2
Mean

1.5

0.5

0
Yes

Customers trying foreign biscuit

Inference: Those respondents who have tried foreign made biscuit found it
different in terms of better packaging to retain freshness and second preference
was in favor of better informative packaging. And rest of the respondents gave
their views in favor of some other attributes like better quality packaging with
colorful wrappers and innovative designs.

Analysis based on the questionnaire filled by Shopkeepers:

Question 1: Do you sell biscuits in your shop?

58
 a. Yes b. No

Inference: Out of the 50 shopkeepers I visited all were those who sell biscuits, the reason
being only those who sell biscuits can be better people to answer the questions regarding
biscuit packaging.

Question 2: How many times a customer visit your shop in a week to purchase biscuit?

a. Once b. 2-3 times c. 4- 5 times d. =>6 times

No of times a customer visits the shop

0-1
2-3
4-5

8.00%
14.00%

78.00%

Inference: From the above pie chart we can interpret that 78% of the shop visitors visit
2-3 times a week and 14 % customers visit 4-5 times a week while only 8 percent
customers visit once a week.
While no body visits shops more than 5 times a week to buy biscuits.

Question 3: What does customer consider most while buying biscuit? [Rank on the
scale of 1 (least preferred) to 8 (most preferred) ]

59
 a. Price b. Brand c. Packaging d. Flavor e. Freshness
f. Availability g. Date of manufacturing/Expiry h. Ingredient

Analysis based on the mean table derived from the all given 8 preferences:

Descriptive Statistics

N Minimum Maximum Mean Std. Deviation

Customer’s
50 5 8 6.86 .969
preference of price
Customer’s
50 1 8 6.20 1.927
preference of Brand
Customer’s
preference of 50 3 7 5.10 .995
Packaging
Customer’s
preference of 50 2 8 6.50 1.403
Flavor
Customer’s
preference of 50 2 8 4.70 1.389
Freshness
Customer’s
preference of 50 1 8 2.12 1.534
Availability
Customer’s
preference of
50 1 4 2.26 .777
Manufacturing
Date
Customer’s
preference of 50 1 5 2.26 1.103
Ingredients
Valid N (listwise) 50

Inference:
After analyzing the above table we find the mean in the case of price preference is 6.86
on the scale, it means the respondents visiting shops are most concerned about Price. The
second highest score goes in favor of Flavor, third goes in favor of Brand and fourth
being the Packaging with the score of 5.10 It means it lies between preferable and some
what preferable. It also means given the 8 choices customer’s 4 th preference will be
Packaging after Price, Flavor, Brand.
Further analysis has been made on the packaging based on the cross tabulation made for
the same question.

60
Cross tabulation between shopkeeper selling biscuits and their preference of
packaging:

Shopkeepers selling biscuits * Customer s preference of Packaging Crosstabulation

Customer s preference of Packaging Total

Comparat
Neither Somewhat Prefera ively more
Bearable yes nor no preferable ble preferable
(Pref 3) (Pref 4) (Pref 5) (Pref 6) (Pref 7)
Shopkeepers Y
selling e 3 10 19 15 3 50
biscuits s
Total
3 10 19 15 3 50

Inference:
From the above mentioned table we can easily interpret that on the scale of 8 preferences
packaging has been given 3 times in case of Preference 7 while in case of Preference 6 it
was given 15 times, in case of Preference 5 – 19 times and in case of Preference 4 it was
given 10 times and in Preference 3 – 3 times. No body has preferred Packaging as 2nd and
3rd preference.

It means in the scale of 8 where any thing above Preference 4 go in favor of Most
preference. Here if we draw the centre line on the scale of 8 then 37 people go in favor of
Most preferred side while 13 people go in favor of least preferred side.

So here, marketer needs to give extra attention to the packaging to tap and retain the
customers.

Representation of the data through a pie chart:

61
 Customer s preference of Packaging

Bearable
Neither yes nor no
6.00% 6.00% Somewhat preferable
Preferable
Comparatively more preferable

20.00%

30.00%

38.00%

Question 4: Do you think Packaging affect buying behavior of customer?

a. Yes b. No

62
 Packaging affects on the buying behavior of customer
Yes
No

2.00%

98.00%

Inference: 98% of the shopkeepers think that the packaging does affect the buying
behavior of customers.

Question 5: What changes you would like to meet in packaging?

a. Change in the packaging format b. Size of the Packet

63
 2%

Both a & b

Only b

98%

Packaging affect on the buying behavior of customer

Inference:
Out of the 50 respondents 49 thinks packaging does affect the consumer behavior and 1
shopkeeper thinks packaging does not affect the consumer behavior at all. Out of those 49
people who has given their views in favor of packaging’s effect think the size and format
of the packet is equally important and both the things should be given equal attention.

Out of those 50 shopkeepers , one who goes against the packaging impact thinks that if
marketer wants to change the packet then the changes should be made in format and not
the size of the packet.

Question 6: Which of the following biscuits do you sell most?

a. Glucose b. Flavored c. Salted d. Cream e. Cookies

64
 f. Rusk g. Other bakery products

40.0% Most sold biscuits by shopkeepers

30.0%
Percent

20.0%

10.0%

0.0%

Glucose Flavored Salted Cream

Variety of the Biscuits

Inference:
Cream biscuits account most in the most selling biscuit while flavored stood second and
glucose and salted being third and fourth respectively. Reasons may be the consumers
prefer taste rather than nutritional value from the biscuits. Almost 25 percent of the
shopkeepers sell Glucose biscuit most , it means the 25% of their customers are health
conscious.

Question 7: Which brand/company’s product you sell most?

a. ITC Sunfeast b. Britannia c. Parle d. Others- ………

65
 Most sold Brand/Company by shopkeepers
6.00% 10.00%
ITC/Sunfeast
Britannia
Parle
20.00%
Others

Pies show percents

64.00%

Inference:
From the above pie chart it can be easily drawn that Britannia is undisputed leader when
it comes to biscuit. While Parle stood second and ITC/Sunfeast being no. third and others
standing at fourth. The other sector mainly consists of Priya Gold and some other local
manufacturers.

As we have already earlier seen the customers giving third preference to brand after price
and flavor and that is the only reason of being Britannia as a successful brand in the
Biscuit and Cake industries. Britannia always emphasized on creating brand though the
brand endorsement like Sachin Tendulkar and some other big celebrities like Amitabh
Bachchan.

Question 8: Do you receive any complaint from the customer regarding the
packaging?
a. Yes b. No

Inference:
Out of the 50 shopkeepers responded 49 said they never received any complaint from
customers while only one shopkeeper says that he received a complaint.
We can easily draw that the reason is how conscious a marketer is about the packaging of
the product.
FINDINGS
The null hypothesis:

66
The null hypothesis taken by me is absolutely false and from the research it was found
that packaging has significant importance in the packaging and that is the only reason
marketers keep changing packaging style to not just provide realistic value to the
customers but to beat competition and sustain in the market also.

During the study I found the importance of all the aspects associated with the Packaged
food. According to the respondents what are their preferences and what the area a
marketer should concentrate upon more. During the study when I asked customers to rank
the seven given aspects including Packaging, flavor, availability, Brand Name, Celebrity
Endorsement, Pricing, Prolonged uses of the brand. The customer’s preferences went in
the favor of Flavor, followed by brand name and then Packaging.
From the research it was found that in the age group of 0-14 customer’s preference go in
favor of Flavor while they are least concerned about the price and celebrity endorsement.
While brand name, Packaging and their passively loyal behavior have scored more or less
same that is above the 4.5 in the scale of 7. In the age group of 15-19 people are most
concerned about pricing and lest concerned about the celerity endorsement. In the age
group of 20-29 the most preferable option is Flavor and the least preference area is
celebrity endorsement, availability and their traditional use. In the age group of 30-39
people are more concerned about packaging and brand name while the 40 and above
people give weightage to packaging pricing and availability.

If we talk about the taste of the consumers are very taste centric and Cream Biscuit is
most preferable in all age group, out of 150 respondents 44 have preferred cream biscuit
while the second preferable option being Cookies with 28 out of 150. Flavored and
Glucose biscuits have scored 22 each out of 150 which have 22 respondents each in their
favor. While Rusk has 17 while Salted biscuits stands at the lowest with 16.

CONCLUSIONS & RECOMMENDATIONS

67
A customer visiting shopkeeper to buy biscuits or any other Processed Food Product,
he/she does not directly have a look and taste of the generic product. Their first
impression comes after watching packaging of the product and not the product itself.
Although a product having been certified with world food standard and if not properly
packed then it can not match the expectations of the customers and therefore will not be
accepted in the market. And today marketer is also realizing the importance of packaging
and many companies have more or less same qualitative product but making them a
differentiated product on the basis of their packaging style, material and new packaging
technology.

After the study it goes without saying that how important role packaging plays in the
product feasibility, shelf life, quality and acceptability of the biscuit. Apart from these
realistic importance marketers use packaging as a differentiating strategy also and that is
the reason companies are fighting to beat each other on the differentiated packaging while
keep the product same with no generic changes.

Packaging hugely accounts in the cost of the production of the product which varies from
one product type to other. In food sector for example, 40 per cent of the total value on the
product comes from packaging. In pharmaceuticals it is about 15 per cent of the overall
cost of the product. In sectors like cosmetics, the value of packaging would be more than
the actual cost of the product. Here if marketers are not able to realize the cost of
packaging then it will go in vain. Packaging is a capital intensive function and requires
huge capital to invest in the packaging machine which is mainly imported from the
European and some Asian countries, so before going to invest so heavily in packaging a
marketer should conduct an extensive research to find out the feasibility of the packaging
and product

Looking at the aspects like product feasibility and the earning potential will not pay the
rewards at the same time a marketer has to take environment into the consideration. And
here the role of the Indian institute of Packaging comes which tells about what to suit

68
what. Before the implementation of any concept a market goes through the entire
environmental issues related to the business.
The importance and the earning potential of packaging industry is being realized by some
MNCs and they are planning to make India a Packaging hub for their business. Like IT,
engineering and pharmaceuticals, India can dream of being an outsourcing hub for the
packaging sector. There have been examples like the carton manufacturer in Kolkata
supplying to companies in Malaysia.

However, to realize the dream, government will have to make certain amendments in its
policies like the removal of reservations from small-scale industries, and making taxation
norms uniform throughout the country. The current situation forces a manufacturer to
shift his manufacturing base to Pondicherry from Tamil Nadu, because the former is
offering more concessions than latter.

Moreover the government currently charges 16 per cent as excise duty, three per cent as
octroi and 4-15 per cent as sales tax. This has to be reduced to a uniform level of four per
cent throughout the country. This reduction could be then passed on to the consumer. Let
India be a big common market rather than markets within a market. As far as quality of
Indian packaging is concerned it is undoubtedly unquestionable and matches even the
standard of the big developed countries.

It is now marketers’ job how they differentiate their products. But since the quality of the
product is met by all players, packaging of a product plays a vital role and marketers are
accordingly making the full advantages of packaging as a product.
And I hope marketers will keep giving equal attention to the packaging and update their
packaging style and quality.

BIBLIOGRAPHY

Published Data:

69
 1. Padmanabhan B. S., ”Food Processing set for a quantum jump”, The Hindu
survey of Indian Industry.
2. Arora, Richa, GM Head-marketing & Innovation, Sep 2007
3. Belk, Russel (1975), “Situational Variables and Consumer Behaviour”, Journal of
Consumer Research, Vol 2.
4. Brown, Robert G, 1974, “Sales response to promotions and Advertising”, Journal
of Consumer Research, Vol 14
5. Chabbra, T.N. (2004): ‘Marketing Management’ Dhanpat Rai & Co. (Pvt) Ltd.,
New Delhi.
6. Hawkins, Del l. & Best, Roger J. & Coney, Kenneth A.; Mookerjee, Amit:
‘Consumer Behaviour- Building Marketing Strategy’ Ninth Edition.
7. Raman R. K., “Growing food business”, The Economic Times, Delhi NCR, 13th
November, 2006.
8. Sankar R. Joshi, “Why food business in India”, Business Today, Delhi NCR.
9. Rao R. Prabhakaran, “feeding India”, Business World, Delhi NCR.
10. Kothari Vijay, “Packaging bringing lives to the product”, Annual economy
survey.
11. Gopalkrishnan R., “Packaging is as important as product”, Business World,
January 2007
12. Shah Narendra, “Opportunities for the processed food industry in India”. IRCC
Notes.

Internet Sources:

1. http://mofpi.nic.in/aboutus/index.htm

70
2. http://www.ibef.org/sector.aspx
3. http://www.pfionline.com/review/review.html
4. http://www.pfionline.com/index1.html
5. http://www.etfoodprocessing.com/oct-nov/index.html
6. http://www.hinduonnet.com/businessline/iw/2001/04/15/05hdline.htm
7. http://www.fnbnews.com/index.asp
8. http://www.superbrandsindia.com/superbrands2003/britannia/britannia.htm
9. http://www.biscuitfederation.org/indus_profile.htm
10. http://www.biscuitbusiness.com
11. http://dipp.nic.in/
12. http://www.thehindubusinessline.com/2003/01/08/19hdline.htm
13. http://www.etfoodprocessing.com/index.html
14. http://dare.nic.in/
15. http://www.agri.coop.nic.in
16. http://www.ficci.com/index.htm
17. http://www.indiastat.com/india
18. http://www.foodindia.org/aboutus.asp
19. http://www.freepatentsonline.com
20. http://www.packagingtoday.com
21. http:://www.productiondaily.com
22. http:://www.iip.nic.in

71
Annexure

72
 Questionnaire(For Consumers/Customers)

This questionnaire is meant for research purpose and provided information will be kept
confidential.

Name:
Profession:
Age (In years) a. up to 14 b. 15-19 c. 20-29 d.30-39 e. =>40

Income (Per annum in lacs), in case of student please mention your parent’s income

a. Up to 2.99 b. 3- 4.99 c. 5- 9.99 d. =>10

1. What do you prefer for having as snacks?

a. Biscuit b. Indian traditional confectionaries

2. Which of the following biscuits do you prefer? [ Rank on the scale of 1 (least
preferred) to 6(most preferred)]

a. Glucose b. Flavored c. Salted d. Cream e. Cookies

f. Rusk

3. How many times you buy biscuits in a week?

a. Once b. 2-4 times c. 5- 6 times d. > 6 times

4. Which of the following brands whose biscuit you usually consume?

a. ITC Sunfeast b. Britannia c. Parle d. Others- ………….

5. When purchasing a new type of biscuit what do you consider most?

(Rank on the scale of 1(Least preferred) to 7 (Most preferred).

a. Brand Name b. Packaging c. Celebrity Endorsement

d. pricing e. Availability f. Prolonged uses of the brand g. Flavor

6. What sort of packaging do you usually prefer for your biscuit? [Rank on the
scale of 1(least preferred) to 3 (most preferred).

a. Paper Cartons b. Aluminum foil c. Plastic packet

73
7. Apart from the normal 100 gm packet which are other types of packet you
prefer

a. Mini pack consisting of 2-3 biscuits b. Large family pack

c. Multi flavored pack d. Others …………

8. While surfing a biscuit packet, what type of information you usually look
for?( Rank on the scale of 1(Least preferred) to 5 (Most preferred)

a. Price b. Nutritional value c. Ingredients d. Manufacturer’s

name and Address e. Date of Manufacturer/Expiry date

9. Do you think the packaging of biscuit has any bearing on any of the following
factors (You can take more than one factor)[ Rank on the scale of 1(Least
preferred) to 5 (Most preferred)]

a. Price b. Quality c. Acceptability d. Shelf life e. Freshness

10. Have you ever tried foreign made biscuit available in Indian shop?

a. Yes No.
If yes,

11. What differences did you find in terms of packaging?[Rank on the scale of
1(least preferred) to 3 (most preferred)

a. More information on the package b. Better packed to retain

freshness c. Others……………….

74
 Questionnaire (For Shopkeepers)

This questionnaire is meant for research purpose and provided information will be kept
confidential.

1. Do you sell biscuits in your shop?

a. Yes b. No

2. How many times a customer visit your shop in a week to purchase biscuit?
a. Once b. 2-4 times c. 5- 6 times d. >6 times

3. What does customer consider most while buying biscuit? [Rank on the scale
of 1 (least preferred) to 8 (most preferred) ]

a. Price b. Brand c. Packaging d. Flavor e. Freshness

f. Availability g. Date of manufacturing/Expiry h. Ingredient

4. Do you think Packaging affect buying behavior of customer?

a. Yes b. No

5. What changes you would like to meet in packaging? [Rank on the scale of
1(least preferred) to 2 (most preferred)]

a. Change in the packaging format b. Size of the Packet

6. Which of the following biscuits do you sell most?

a. Glucose b. Flavored c. Salted d. Cream e. Cookies

f. Rusk g. Other bakery products

7. Which brand/company’s product you sell most?

a. ITC Sunfeast b. Britannia c. Parle d. Others- ………

8. Do you receive any complaint from the customer regarding the packaging?
a. Yes b. No

Name of the Shop:

Location:

PROGRESS OF THE WORK

75
LITERATURE REVIEW:

 Padmanabhan B. S., ”Food Processing set for a quantum jump”, The

Hindu survey of Indian Industry, November 2006.

 Raman R. K., “Growing food business”, The Economic Times, Delhi

NCR, 13th November, 2006.

Key objective
To analyze the relevance of packaging in Processed Food Industry with special reference
to Biscuits.

Sub Objectives:

4. To assess the current state of affairs in the packaged food industry taking biscuits
as example.
5. To highlight the importance of Packaging.
6. To study the degree of influence packaging has on consumer’s buying behavior.

Hypothesis of Research
Null Hypothesis H0: Packaging is not that significant a factor if we look at the processed
food industry (Biscuits as example)

Alternate Hypothesis H1:The packaging in Processed Food Industry (Biscuit as

example) plays significant relevance in terms of influencing consumer behavior

PROGRESS OF THE WORK

76
LITERATURE REVIEW:

 Sankar R. Joshi, “Why food business in India”, Business Today, Delhi

NCR, 22nd October, 2006.

 Rao R. Prabhakaran, “feeding India”, Business World, Delhi NCR, 8th

October, 2006.

 http://mofpi.nic.in/aboutus/index.htm
 http://www.ibef.org/sector.aspx
 http://www.pfionline.com/review/review.html
 http://www.pfionline.com/index1.html

DATA COLLECTION:

Research Methodology
Type of Research
Descriptive Research
Sample size
150 (From a population of Consumers) + 50(From a population of Shopkeepers)
Sampling technique
Random sampling

Data collection techniques

1. Data Collection Method:
1.1. Primary data:
The core findings of the project are based on the information collected through primary
data i.e.: information collected directly through respondents (Consumers).
Two questionnaires are to be prepared one for the population of consumers and the other
one for Shopkeepers, which will be in accordance with the research objective. It will
contain both close-ended questions and some open ended questions.

1.2. Secondary data:

77
Secondary data were collected through websites, magazines, newspaper articles, periodic
journals.

2. Field Work:

The survey for this project will be limited to Delhi NCR region. The survey will be
Conducted in various residential societies, shopping malls and other grocery shops.
During this field work, various respondents were personally interviewed to obtain their
views about packaging and to know their choice and preferences about the packaging
impact.

LITERATURE REVIEW:

 Kothari Vijay, “Packaging bringing lives to the product”, Annual

economy survey, December 2006.

 Gopalkrishnan R., “Packaging is as important as product”, Business

World, January 2007

 Shah Narendra, “Opportunities for the processed food industry in India”.

IRCC Notes

 http://www.etfoodprocessing.com/oct-nov/index.html
 http://www.hinduonnet.com/businessline/iw/2001/04/15/05hdline.htm
 http://www.fnbnews.com/index.asp
 http://www.superbrandsindia.com/superbrands2003/britannia/britannia.ht
m

ANALYSIS:

According to my study only two percent of the fruits and vegetables produced in the
country are now processed, as compared to 30 per cent in Thailand, 70 per cent in Brazil,
78 per cent in Philippines and 80 per cent in Malaysia. The value addition in the food
sector in India is a mere 7 per cent. The output of fruits and vegetables is projected to
increase substantially in the coming years. Currently it constitutes 6.6 percent of total
food grain production and this figure is expected to reach 80 per cent by the year 2010.

78
However though small, the statistics may make it look like, the impact that packaging
food has on the purchasing behavior is humungous. But what is the generic difference
between food and packaged food? The simple fact that food which is packaged is safe has
shelf life and draws the customer’s attention.
Packaging is one of the most important determinants of the success of a product in the
market. In marketing language there are four P’s which are product, price, place and
promotion. And packaging is the part of very first P without which not a single product
can be assumed complete.

Take the case of biscuits for example. The biscuit market is driven by the consumer’s
choice and marketers accordingly change their product type to meet the need of the
customers. Although there are four types of Biscuit products consist of --hard biscuit,
cookies, crackers and wafer. Consumers, however, generally choose biscuits by their
brands not by the type. Producers generally produce more than one type of biscuit. So
which of the Ps of packaging is significant in influencing consumer behavior the most?
One can decipher it to be packaging while another school of thought can portray
packaging as another “P” of marketing and associate more weight age to price, flavor and
purchasing pattern of biscuits.

LITERATURE REVIEW:

 Padmanabhan B. S., ”Food Processing set for a quantum jump”, The Hindu
survey of Indian Industry.

 Raman R. K., “Growing food business”, The Economic Times, Delhi NCR.

 Sankar R. Joshi, “Why food business in India”, Business Today, Delhi NCR.

 Rao R. Prabhakaran, “feeding India”, Business World, Delhi NCR.

 Kothari Vijay, “Packaging bringing lives to the product”, Annual economy

survey.

 http://www.biscuitfederation.org/indus_profile.htm
 http://www.biscuitbusiness.com
 http://dipp.nic.in/
 http://www.thehindubusinessline.com/2003/01/08/19hdline.htm
 http://www.etfoodprocessing.com/index.html

79
 ANALYSIS

The analysis has been done on the basis of the questionnaires filled by the customers and
consumers of different age group. There were two different questionnaires, out of which
one was meant for the consumers/customers and the other was meant for the shopkeeper
so on the basis of each questionnaires the behavior and perception of both consumers and
shopkeepers can me measured.

CONSUMER/CUSTOMER’S RESPONSE ANALYSIS

1. CONSIDERATION

In case of the age group of 0-14 customer’s preferences go in favor of Flavor while they
are least concerned about the price and celebrity endorsement. While brand name,
Packaging and their passively loyal behavior have scored more or less same that is above
the 4.5 in the scale of 7. In the age group of 15-19 people are most concerned about
pricing and lest concerned about the celerity endorsement.
In the age group of 20-29 the most preferable option is Flavor and the least preference
area is celebrity endorsement, availability and their traditional use.
In the age group of 30-39 people are more concerned about packaging and brand names
while the 40 and above people give weight age to packaging pricing and availability.

2. PACKAGING

The most preferable choice for the 0-14 age group is Aluminum foil packet while the
paper carton is the least preferred option in this age group. Again in the age group
of 15-19 the most preferable option is aluminum foil packet. While plastic and
paper carton stand at more or less same place. While in the case of age groups of
20-29 and 30-39 the most preferable option is plastic packet and the least
preferred option is Paper carton pack. While in case of age group of 40 and above
the most preferred choice is of aluminum foil packet while other two choices of
paper carton and plastic packet are equally preferred by the group.

3. FACTORS

When respondents were asked about the bearing of the Packaging on the five aspects i.e.
Price, Quality, Acceptability, Shelf life and Freshness there response were in the favor of
freshness. Then their weight age was on quality and then shelf life and the least
preference was acceptability and price

80
 SHOPKEEPER’S/SELLERS RESPONSE ANALYSIS

1. CUSTOMER CONSIDERATION

After analyzing I find, respondents visiting shops are most concerned about Price. The
second highest score goes in favor of flavor, third goes in favor of Brand and fourth being
the Packaging. It means it lies between preferable and some what preferable. It also
means given the 8 choices customer’s 4th preference will be Packaging after Price, flavor,
Brand.

2. SHOPKEEPER’S PERSPECTIVE

98% of the shopkeepers think that the packaging do affects the buying behavior of
customers.

ANALYSIS:

The null hypothesis set by me is absolutely false and from the research it was found that
packaging has significant importance in the packaging and that is the only reason
marketers keep changing packaging style to not just provide realistic value to the
customers but to beat competition and sustain in the market also.
During the study I found the importance of all the aspects associated with the packaged
food.
When I asked the customers to rank the seven given aspects including Packaging, flavor,
availability, Brand Name, Celebrity Endorsement, Pricing, Prolonged uses of the brand.
The customer’s preferences went in the favor of Flavor, followed by brand name and then
Packaging.
From the research it was found that in the age group of 0-14 customer’s preference go in
favor of Flavor while they are least concerned about the price and celebrity endorsement.
While brand name, Packaging and their passively loyal behavior have scored more or less
same that is above the 4.5 in the scale of 7. In the age group of 15-19 people are most
concerned about pricing and lest concerned about the celerity endorsement. In the age
group of 20-29 the most preferable option is Flavor and the least preference area is
celebrity endorsement, availability and their traditional use. In the age group of 30-39
people are more concerned about packaging and brand names while the 40 and above
people give weight age to packaging pricing and availability.

81
CONCLUSIONS & RECOMMENDATIONS:

A customer visiting shopkeeper to buy biscuits or any other Processed Food Product,
he/she does not directly have a look and taste of the generic product. Their first
impression comes after watching packaging of the product and not the product itself.
Although a product having been certified with world food standard and if not properly
packed then it can not match the expectations of the customers and therefore will not be
accepted in the market. And today marketer is also realizing the importance of packaging
and many companies have more or less same qualitative product but making them a
differentiated product on the basis of their packaging style, material and new packaging
technology.

After the study it goes without saying that how important role packaging plays in the
product feasibility, shelf life, quality and acceptability of the biscuit. Apart from these
realistic importance marketers use packaging as a differentiating strategy also and that is
the reason companies are fighting to beat each other on the differentiated packaging while
keep the product same with no generic changes.

Packaging hugely accounts in the cost of the production of the product which varies from
one product type to other. In food sector for example, 40 per cent of the total value on the
product comes from packaging. In pharmaceuticals it is about 15 per cent of the overall
cost of the product. In sectors like cosmetics, the value of packaging would be more than
the actual cost of the product. Here if marketers are not able to realize the cost of
packaging then it will go in vain. Packaging is a capital intensive function and requires
huge capital to invest in the packaging machine which is mainly imported from the
European and some Asian countries, so before going to invest so heavily in packaging a
marketer should conduct an extensive research to find out the feasibility of the packaging
and product.

82
83