The boom in the beverages segment and modern retail spells good fortune for Tetra Pak.

R. Ravikumar

"It's Tetra Pak's customer's brands that are of prime importance to us."

Packaging company Tetra Pak, with its business philosophy based on one simple idea a package should save more than it costs, has grown to a level where, for many, Tetra Pak the brand is almost synonymous with food and beverage cartons.

The phenomenal growth being witnessed by the beverages segment has triggered the demand for carton packaging. Accepting that, Drummond Rimmer, Business Development Director, Tetra Pak India, says, "Modern retail is one of the main drivers of growth for us in any country where product availability, choice of products and product quality ensure that all consumers fulfil their daily nutritional needs."

There have not been many campaigns to promote the brand Tetra Pak. According to Rimmer, the company is not keen on promoting its own brand. "It's Tetra Pak's customer's brands that are of prime importance for us. Only through customer brand building and product offerings do we see success of products in Tetra Pak packages."

The company's plant in Pune produces four billion packages a year, of which 2.5 billion packages are exported to countries such as China, Turkey, Egypt, Australia and Thailand. The rest are used for domestic consumption.

In India, pure juice (as opposed to a fruit drink, which largely connotes added flavour and few natural ingredients) alone has a market volume of approximately 250 million litres, of which the packaged segment accounts for 25 per cent and is growing at an extraordinary 55 per cent. "Tetra Pak holds over 90 per cent share of this market," says Rimmer.

According to him, the company is seeing a healthy double-digit growth year-on-year.

"And we strongly believe that this growth will continue as consumers increasingly demand a broad choice of juices to refresh and replenish needs from a strong health platform."

According to the company, Tetra Pak's rich image conveys the high quality of the content, which should be new and original to the consumer so as to take full advantage of the positive synergies between the container and its content.

The company's clientele includes majors such as Nestle, Amul, Dabur, Tropicana, Mohan Meakin, Godrej and Parle, among others.

"Be it fruit juices, nectars, fruit drinks, iced teas or dairy products, Tetra Pak packages are there to protect the freshness and nutritional values of the product in a convenient way," says Rimmer.

With the Bangalore-based pharma major FDC launching its energy drink Enerzal in cartons, Tetra Pak forayed into the pharma segment too. "We are also working closely with McDowell in the alcoholic beverage segment, which is an exciting market with excellent potential," he says.

Tetra Pak has over 100 types of aseptic packaging formats such as Tetra Fino, Tetra Prisma, Tetra Brik and Tetra Wedge, each for a different purpose. For example, Tetra Fino is a pouch more suitable for milk, while Tetra Prisma, the company claims, is a premium carton with a unique shape that makes for easy pouring. It has a re-sealable screw cap and is used for drinks such as fruit juices, flavoured milks and organic products. In India, brick-shaped Tetra Brik cartons are the most widely used.

These packages are basically made up of six layers four layers of polyethylene, one of paper and one of aluminium. They generally offer four months of shelf life for dairy products and six months for other beverages, in unrefrigerated conditions. The products do not require preservatives to be added.

"By understanding and answering the needs of our customers, we believe that we will be able to provide a strong presence of portfolio, product and positioning. Always keeping oneself on one's toes and being flexible to answer customers, retail and consumers is the way to provide opportunity and growth, hence increasing share of throat," says Rimmer.

Apart from packaging material, the company also supplies processing and filling machines for which it is thinking of setting up an assembling plant in India.

On future investment plans, he emphasises, "As the market grows, we will certainly look at investing to ensure that customers receive the support that more than meets the demands."

When asked how much more it would cost to pack half-a-litre milk in a Tetra Pak pouch than in the conventional sachet, Jaideep Gokhale, Dairy Category Manager, Tetra Pak India, said, "It may cost a little more than a sachet, but a company can make up the costs by on lower processing expenses."

According to industry sources, the end consumer may have to shell out a rupee or two more for half-a-litre milk in Tetra Pak pouch. "But, one gets 100 per cent bacteria-free milk and need not refrigerate it," argues Gokhale.

Tetra Pak recently unveiled two TV commercials (created by Leo Burnett India) with a tagline Good Milk. Great Value to create awareness among consumers about the benefits of carton-packaged milk. Gokhale said worldwide, milk in cartons is the consumers' choice by default. But not so in India because of low benefit awareness amongst consumers. "That is why we thought a long-term educational approach leading to a change in mindset is needed," Gokhale said.

Tetra Pak is also planning a consumer education blitzkrieg through a `Retail Activation' programme in Mumbai and Bangalore for two months. "We have chosen 150-200 outlets in each city, and our customers have assured us filled shelves. Promoters appointed by us will remind shoppers about the television campaign, and reiterate its key messages while also urging them to buy milk in cartons," Gokhale explained.

According to him, the retail activation programme also involves building up a relationship with retailers by educating them about the benefits of aseptic (UHT) technology and tips on proper and efficient storage and shelf display.

The company at the recent Anuga Fair in Germany showcased several new products such as Tetra Gemina, Tetra Aptiva and Tetra Top amongst other processing equipment, technical services and environment support.

Tetra Pak has a Product Development and Innovation Centre, where, according to Rimmer, the company is continuously innovating on products and formulations. "Many new products are in the pipeline and we are sure that consumers will see more and more variety to choose from," declares Rimmer.

(This article was published in the Business Line print edition dated July 27, 2006)
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