Companies

‘India, a curious blend of tradition and innovation’

Chitra Narayanan New Delhi | Updated on May 16, 2019 Published on May 09, 2019

 

For Tetra Pak, India not only represents a leader on the sustainability front but also a country that holds potential for high growth, says Adolfo Orive, who took over last month as the President and CEO of the world’s largest food packaging company (with net sales of €11.2 billion). Orive’s first visit outside Tetra Pak headquarters in Lausanne was to India, where he toured the company’s plant in Chakan, Pune, and met customers in Bengaluru. In an interivew with BusinessLine, he said the company is launching new service offerings, which include running a customer’s factory. Excerpts:

Why did you choose to visit India first?

One of the challenges all companies face today is finding growth areas. You need to prioritise and find where future business will come from. Definitely, for us Asia and India is where the potential is. More than 30 per cent of our business already comes from Asia. In terms of litres sold, India is among the top 15 but when it comes to number of packs sold, India is in the top three [the pack sizes here are smaller].

Also, there are many stories of MNCs that have come to India and failed. Although we have been here for many years, I needed to come and understand for myself the uniqueness of India.

So what have been your observations?

India has very specific and unique consumer habits. The consumers here are traditional, yet they seek innovations all the time. The retailing system here is unique. There are over 10 million small stores and such different distribution formats. I have seen people distributing milk on two-wheelers early in the morning.

People think these formats exist because the retail market in India is not developed. But when you come here, you realise these formats offer a lot of convenience.

In your 25 years with Tetra Pak, you have worked in both the Americas and Europe. What are the similarities/ differences you see in the various markets?

Consumers in all geographies are always looking for products that bring in health. People are also looking for products that are unique to their needs. Also, everybody wants the value for their money. Another commonality is the growing concern for sustainability.

As for differences, even with globalisation, today we see the world is becoming more different rather than common. You see consumers behaving in different ways. For instance, convenience is very important for the Indian consumer.

Consumption patterns everywhere are also very different. For instance, in the US, the per capita consumption of ice cream is 25 litres, while in India it is less than 300 ml.

Although you enjoy the first-mover advantage, a lot of players have entered the aseptic packaging business. How are you dealing with the competition?

We are known as a food-packaging company, but our offering is actually for the whole system.

Tetra Pak has three businesses. First is processing. We make equipment for the dairy business such as ice cream-makers, powder-makers and pasteurisers.

Services is another business, where we offer Industry 4.0 smart factory solutions to our customers. If you want to reduce the cost of running the factory, minimise waste, improve efficiency, sustainability and traceability, we can help you. We are exploring whether we can run the factory for customers. This is already in play. In India, for instance, I had a meeting with a customer who said he wanted to put money to grow his brand and have us run the factory.

The third part of our business is food packaging. Sustainability and traceability are becoming a very important part of our packaging solutions. We also offer food technology services as an added value to our partners.

We have the largest database of consumption habits. In India, 90 per cent of our customers are local businesses. For them, it is useful to know which formulations and packaging will work.

Another use-case example of food technology services is a company from Sri Lanka that asked us to reformulate its product, as it had been hit by the sugar tax.

How is the sustainability aspect? Tetra Pak cartons are thought to be very difficult to recycle, compared to glass and other materials...

Sustainability means more than the environment for us – it touches gender, diversity, social responsibility, capability, and safety of employees as well.

Our packages are basically based on renewable resources, which is paper. Renewable resources are important as they have low carbon emissions.

We as a company want to work on the low carbon circular economy route.

In India, we recycle 40 per cent of our package, making it one of our highest performing countries on the recycling front. The global average recycling of Tetra Pak packages is only 20 per cent – though there are countries such as Germany where it is 80 per cent.

We have four recycling facilities in India where the paperboard is reused to make products like notebooks and tissues. But we are not staying there. Our ambition is to create a package that is 100 per cent renewable, rather than the current 75 per cent.

As a company, we have invested €400 million on R&D and a lot of that investment is focussed on sustainability and finding the material that will drive the next generation of renewability.

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

Published on May 09, 2019
This article is closed for comments.
Please Email the Editor