Compiled by Dona Senara

WRAPPED WITH POTENTIAL!

Krishna Ravindran believes the new world order may propel regional growth

Q: Could you outline the emerging market trends in the packaging sector?

A: Over the past few decades, the value added packaging sector has enjoyed growth due to several favourable technological, demographic, macroeconomic and geopolitical trends.

Many of these trends will continue while three of them – sustainability, ‘friendshoring’ and digitalisation – are continuing to create major challenges and once in a lifetime transformational opportunities for packaging businesses.

Q: So what is friendshoring?

A: Friendshoring is the process of manufacturing and sourcing from countries that are geopolitical allies.

Some organisations and governments pursue friendshoring to continue accessing international markets and supply chains while redu­cing certain geopolitical risks.

For decades, businesses sought cheap and efficient supply chains to produce goods for export, and access to growing young populations in developing countries to spur sales.

Businesses are still looking for cheap, efficient and youthful markets; but today, they also desire safety, which means diversifying away from tensions between the world’s economic powers.

This thinking has helped businesses in South and Southeast Asia to gain market share as organisations expand their supply networks.

And in turn, it has opened fresh opportunities for businesses such as those in packaging, which can now fit into these new value chains.

What we are witnessing is a reshaping of globalisation. This transformation period will play out over the next three to five years as supply chains unfreeze and then refreeze around new global participants in South and Southeast Asia, and the Gulf region.

Sri Lanka can’t afford not to position itself effectively and benefit from this reshaping.

Q: How should packaging manufacturers respond to the need for sustainable solutions?

A: The chief trend in this sector is the need for sustainable packaging solutions. Consumers are now demanding products that have a minimal negative impact on the environment and longer life cycles.

Governments are also imposing more stringent regulations – both in the country of origin and where it’s consumed.

Environmental sustainability is a key growth opportunity for packaging businesses.

Organisations that embrace this change will position themselves for continued progress in tomorrow’s economy, reap the benefits and find themselves in positions of leadership.

Packaging businesses need to maintain a constant dialogue with their customers on what shifts they foresee in their markets based on anticipated consumer perceptions and regulatory changes. And then they must use those insights to identify growth opportunities through which they can position themselves to provide winning solutions.

Q: In what way is digitalisation shaping the future of packaging?

A: Digitalisation is influencing many phases of the packaging value chain including upstream and downstream.

On the demand side, online retailing continues to grow, driven by internet and smartphone penetration rates. Consumers are increasingly buying more goods online and are slightly less brand loyal.

This will increase demand for packaging solutions that allow brands to engage directly with their customers. It is creating interest in customised or more frequently versioned packaging that can create greater engagement with consumers.

On the distribution side, we see customer supply chains moving to large new markets because of population growth along with higher rates of urbanisation in emerging markets.

This is translating into increased spending on packaged goods and the aspiration among a strengthening middle class to engage with recognised brands.

The resulting internationalisation of many brands in emerging markets is stimulating demand among brand owners for packaging, which provides greater protection against counterfeit goods and enables more sophisticated monitoring of distribution up to the end user.

And on the production side, digital printing and the increasing use of AI in operations are enabling packaging businesses to cater to those requirements. Digital printing enables packaging manufacturers to print smaller and more varied runs at a price point that wasn’t possible earlier.

The result is faster prototyping, product development and ‘go to market’ times, enabling quicker product refreshes for brands.

It also provides increased opportunities for brands to use packaging as a way to engage with customers by offering them more options and instances to customise their packaging, and link to real-time events and social media.

In ‘make to order’ businesses such as packaging, optimisation of processes and resources is complex but critical. The challenge our businesses face is to optimise the competing factors of production such as efficiency, cost, waste and delivery lead times based on rapidly changing customer preferences.

Artificial intelligence can help packaging businesses optimise production and operations across many different constraints, and generate outcomes that maximise value for customers, employees and shareholders.

Krishna Ravindran is the Executive Director of Printcare.