Bhupinder Singh shares beverage trends on the eve of Drinktec

Disha Chakraborty (DC): The Indian edition of Drinktec is scheduled for 7 to 9 December. What were the highlights of Drinktec 2022 from 12 to 16 September in Germany?Bhupinder Singh  (BS): Drinktec 2022 Munich, held after a gap of five years, was well-received by the industry. The show witnessed more than a thousand exhibitors from 55 countries and more than 70,000 visitors from 169 countries. The trade fair and conference showcased the latest innovations in the beverage industry and a large array of solutions in sustainable packaging, water management, automation, kegs, closures, bottling, filling, and many others. The conference and Place2beer program at Drinktec deliberated on key topics about the future of technology in the beverage industry plus the trends in sustainability. 

DC: Messe Muenchen India (MMI) celebrates 15 years in India. Packaging is the second biggest component in your portfolio. What do your numbers suggest?
BS: The Indian packaging industry has grown substantially over the past few years, owing to the evolution of consumer demand. To facilitate such demand, MMI has launched its new platform PackMach Asia Expo to be co-located with Drink Technology India and World Tea & Coffee Expo. This edition will showcase some of the latest packaging machinery solutions for the pharma, FMCG, food and beverage industries. The packaging segment in the overall show has now shown an increase of more than 50% in the number of exhibitors from across the country. 

DC: Ten live demos at the Mumbai show. Has the pandemic affected the participation of companies? Or as they say, are the spirits high?
BS: We had about 180 exhibitors in the 2019 edition of Drink Technology India. We have 15,000+ sqm exhibition space, featuring 250+ exhibitors displaying 3000+ products. Some of these products would be demonstrated live onsite by prominent companies such as Clearpack, Mechanical Systems, Water Gen, KHS, Repute Engineering, Sidel, Mespack, IMA-PG, SSP Packaging, and Hilda Automation.

DC: What are the conversations you have picked up from the exhibitors?
BS: Our exhibitors look at Drink Technology India as a robust ecosystem where they can connect with prospective buyers or collaborators to engage in meaningful handshakes and unlock business opportunities for the industry. 

DC: While crunching AlcoBev numbers and Pernod Ricard sees a 21% boost to numbers and now it controls one fourth of the whiskey market. This is just one AlcoBev company. How has this sort of confidence in consumer sentiment translated on the ground?
BS: According to a report by Indian Council for Research on International Economic Relations (ICRIER), India is one of the fastest-growing alcoholic beverages markets globally with an estimated market size of USD 52.5-bn and is expected to grow at a CAGR of 6.8% by 2023. This estimated growth in the AlcoBev industry provides substantial opportunities for the packaging industry. 

DC: In what way?
BS: Most of our top exhibitors provide solutions such as filling and packaging machines, caps and closures, processing equipment, materials and equipment, coding and marking, label printing, corrugated box manufacturing, supply chain logistics and material handling, and more. Drink Technology India 2022 provides a platform for the exhibitors to meet the AlcoBev leaders and conduct business and make meaningful partnerships through its buyer-seller meetings.

DC: Has sustainability in packaging improved? If it has improved, anything that you can share with us?
BS: India’s packaging sector is estimated to grow at a rate of nearly 27% between 2021-26. One of the key drivers of this growth is environmental sustainability as it is gaining the attention of businesses and consumers are preferring environmentally responsible products. In India, the growing middle class is gradually understanding the health and environmental risks associated with certain types of packaging.

DC: What has the consumer reaction been towards sustainability and the initiatives?
BS: According to a Capgemini report, 79% of consumers are changing their buying habits due to social responsibility and environmental impact. Business success and environmental sustainability practices may coexist and manufacturers that approach sustainability demands thoughtfully have a competitive edge. All this is driving the packaging industry towards sustainability as demand for efficient and environmentally friendly packaging is increasing. 

DC: How is MMI responding to all this?
BS: The topics of sustainability are also a part of the Drink Technology India and PackMach Asia conference which shall throw light on various initiatives that are being taken by large-scale companies towards sustainability and how they aim to overcome various challenges that they face. Various solutions on sustainable packaging, bottling, and other solutions are being showcased on the show floor. This should help the visitors of the event witness and engage in solutions that meet the new regulatory requirements.

DC: Mr Singh, you are an industry veteran and a lot has unfolded before you. What are the strengths and weaknesses of this industry?
BS: We have witnessed growth in the packaging industry in recent years. In India, the packaging industry is the fifth largest sector in the economy, growing at a CAGR of 22-25%. The packaging sector attracts investors and long-term capital because of its growing demand in India. It provides employment opportunities and attracts foreign direct investments.

DC: I am curious to know, what is your observation when you visit packaging factories, manufacturing lines, and the manner in which products are being produced?
BS: There is a growing demand for technically advanced and highly automated packaging machinery in India. To maintain a competitive edge, domestic manufacturers need specialised packaging machinery which is at par with international standards. With Drink Technology India, we endeavour to create a vibrant ecosystem where we can promote technology, exchange ideas, align interests, and collaborate for business success. 

DC: Beer is globally the third most popular drink after water and tea. Did the Covid months see a dip in beer consumption?
BS: During the initial stages of the pandemic, the beer market was at a standstill when the sale of alcoholic beverages was discontinued for about forty days. Later, the introduction of Covid cess on liquor in many states increased the prices of beer which led to an increased demand for low-cost beers over premium brands. The growing awareness regarding alcohol by volume and customised flavours of beers is driving this segment.

DC: Is craft beer on the rise?
BS: Craft Beer has been a revolution in the country and has been very well accepted amongst the customers. An exposure to cultures of various countries and a lot of international travels have fed the rise in the culture of craft brewing. More than 150 craft breweries have now been set up across the country and craft brewing also has been looked at as a serious profession. Seasonal brews have also been a huge trend amongst the customers where brewers have consistently been offered a chance to explore and experiment with flavours and tastes. The beer industry is estimated to grow at a CAGR of more than 10.89% during the period of 2021-25 where craft breweries also shall look to contribute.

DC: Are we seeing disruption in the market? What kind of disruption, if any?
BS: There is a growing need for breweries of all sizes and suppliers to update themselves with the trends related to brewing. At Drink Technology India 2022, the place2beer program offers an excellent opportunity to experience, experiment, and network with brewers from across the country through the place2beer program. Through this platform, we deliberate upon topics like changing consumer preferences and emerging commercial opportunities in the craft beer segment. 

DC: Amul’s RS Sodhi shared with WhatPackaging? that India is the world's number one milk producer and the biggest milk market in the world. He mentioned how 12 crore packs are sold and consumed every day. A feat which is possible only because of low-cost and efficient plastic packaging systems. One interesting thing he shared was: Milk packed in LDPE as opposed to other packaging technologies ensures the cost benefits goes to the farmers and the consumer. He said, "If the same milk is being sold in glass bottles the cost will double and middle class and lower middle class people would not be able to afford that.” Your response to this comment.
BS: Well, backed by the growing popularity of this segment amongst consumers, dairy behemoths like Amul have launched several brands of flavoured milk in PET bottles, which are competing with several other Indian and international brands. It needs to be seen how this will create an impact on the customers and saleability. Due to its popularity, PET or similar raw material can be looked at as an alternative material for the packaging of milk.

DC: The margin on the supply chain monitor distributor retailer ought to be 5-6% but for the same product packed in Tetra Pak will increase your supply chain margins to 12-15%. How can the Indian liquid  industry resolve this cost versus technology conundrum?
BS: Alternate liquid milk products such as flavoured beverages offer a great opportunity to increase the supply chain margins. The market reached a value of Rs 33.2-bn in 2021 and is estimated to reach Rs 127.7-bn 2027 at a CAGR of 26.01% during 2022-27. Many such similar raw materials and technologies for packaging can be witnessed in our upcoming edition of Drink Technology India 2022 which may present potential solutions to the issue of packaging in the milk industry.

DC: A new standard for sustainability reporting - the ISSB is being discussed at the COP27 Summit in Egypt right now. How will this impact the beverage industry?
BS: When it comes to sustainability reporting standards, the International Sustainability Standards Board (ISSB) has recently adopted a partnership framework to integrate multiple reporting organisations standards into a common framework. Today, both Extended Producer Responsibility (EPR) and sustainability reporting trends point towards the need for forging networks and alliances between multiple stakeholders, and that is precisely what we do through our trade fairs.

DC:  To what extent will this and the EPR policy impact the sector?
BS: EPR implementation is still in its nascent stages in India, but the concept has been well received by all stakeholders in the industry, including manufacturers, importers, brand owners, and enforcement agencies. However, successful EPR implementation requires alignment of interests and cooperation by multiple stakeholders ranging from large conglomerates to startups. 

DC: Thank you Mr Singh. Final thoughts?
BS: Try not to miss the opportunity to visit Drink Technology India, PackMach Asia Expo, and World Tea & Coffee Expo 2022, to be held from 7 to 9 December 2022 at the Bombay Exhibition Centre.