FMCG majors to shrink pack sizes, as crude shock breaches USD 100

The major pain point is packaging, which is derived from crude-linked petrochemicals.

A packaging developer for a biscuit major said, "Packaging accounts for 15-20% of costs. And reducing grammage in small packs and increasing prices of bigger packs are options we are considering if oil prices remain at current levels."

Materials like PET bottles, laminated wrappers, and polyethylene films all rely on petrochemical derivatives. This structural dependence means pricing changes are passed on quickly. Crude derivatives such as PP and PE films are extensively used in packaging for snacks, sachets, and plastic caps. Moreover, linear alkyl benzene (LAB), a key crude derivative, accounts for at least half of the raw material costs in detergents and cleaning products.

The impact of crude is not limited to logistics; it is fundamentally woven into the product itself. Industry data points to packaging representing 12% to 18% of the cost of goods sold (COGS), with logistics adding another 6% to 8% of sales.

The fallout has disrupted import logistics. Executives at packaging companies confirm they have already begun pivoting their sourcing strategies away from the Gulf region.

One of the largest PET bottle manufacturers in India is aggressively sourcing polymers from alternative suppliers in Asia, including China, Thailand, and Singapore.

The consensus within the industry is that price hikes are now inevitable and that supply shortages will be long-term.

In a circular dated 6 March, 2026, the ink association, AIPIMA highlighted a confluence of global factors that have made continued supply at pre-crisis prices commercially unsustainable. The core issue stems from the volatile pricing and supply of crude oil and its petrochemical derivatives, which form the essential raw materials for virtually all categories of printing ink.

Industry insiders state that the crisis is being compounded by four primary pressures. Sustained multi-year highs in crude oil prices are directly inflating the cost of industrial solvents and resins crucial for ink production. Additionally, restrictions on the export of critical pigment and resin intermediates from China are tightening supply and raising costs for key components like Phthalocyanine and Quinacridone organic pigments.

Furthermore, the rerouting of global shipping lanes around conflict zones has sharply increased freight costs, adding to the import burden. And finally, a weaker rupee is exacerbating all import-linked cost increases.

A senior member of a packaged foods brand told WhatPackaging?, "We will need to do weight reduction in our snacks packs. Even with alternative crude supplies, prices are soaring as demand-supply dynamics have taken effect."

The WhatPackaging? view: If geopolitical instability sustains high petrochemical costs, companies will be forced to make structural changes beyond temporary price hikes. Future consumers may adjust to smaller pack sizes and higher-priced bulk goods, fundamentally altering the value proposition of mass-market staples.

This crisis could also accelerate a necessary, though costly, industry-wide pivot toward non-petrochemical packaging. The long-term dependence on crude-linked materials has been exposed as a critical vulnerability.

At WhatPackaging?, we expect a future surge in investments in recycled, bio-based, and innovative sustainable packaging solutions, as brands seek to de-risk their supply chains and future-proof their operations against global oil volatility.

The rural consumer, the backbone of this market, will bear the brunt of sustained inflation, demanding creative, cost-effective solutions to maintain accessibility.