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Cola cos look to can more sales via PET

Cola cos look to can more sales via PET

Author | Source: The Economic Times | Thursday, Jun 08,2006 6:30 AM

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Cola cos look to can more sales via PET

Packaging in the Indian soft drinks market is witnessing a gradual shift towards the non-returnables as consumer preferences and lifestyles change. As the popularity of PET bottles and cans rises among the urban population, soft drink majors are building strategies around new and convenient ways of packaging.

Pre-empting the migration to non-returnables, Pepsi India expects to see more cans and PET bottles in the Indian cola market. In an attempt to cash in on the changing behavioural patterns and higher purchasing power parity in the country, Pepsi expects 15% reduction in the share of glass bottles from the current 65%. Likewise, arch-rival, Coca-Cola India is not far behind in lapping up the growth in the PET model and expects the category to do well in the future.

Rajeev Bakshi, CEO, PepsiCo India, told ET in an interview that the growth rate of glass bottles is going to slow down in the next three years and new categories will emerge in tandem with international trends, which would be contemporary in nature.

This, he said, was a signal of an emerging economy. According to Mr Bakshi, the Indian FMCG industry is increasingly mirroring international trends and convenient packaging is part of the overall contemporary tilt in consumer demands.

PET bottles are fore-runners as far as growth potential in the Indian markets is concerned. Atul Singh, president and CEO, Coca-Cola India agrees. “Soft drinks in India are predominantly sold in returnable glass bottles (RGB). However, PET packaging has been doing very well recently as it offers the flexibility of innovation, both in terms of pack design and size. While RGB will grow in the future, we also expect PET packaging to do extremely well, especially in the metros,” he said.

Besides, PET packaging, cans are the mainstay as far as packaging models go internationally. Mr Bakshi attributes the lack of development in modern trade as a reason for lack of adequate interest in cans.

The PepsiCo chief feels that gradually the convenience factor will overtake the value factor and that's when cans and other non-returnable modes of packaging will be the most preferred for Indian consumers.

“Due to the lack of capacity in the aluminium can industry in India everything has to be imported, which make cans expensive. But we have seen sudden growth in the consumption of cans in countries such as Egypt from a moderate 1% to 15% in three years time. This could get replicated in India over a period as well.”

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