This Is How Beverage Companies Battled the Odds of 2022 - Entrepreneur

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With consumers making conscious choices, they are looking for brands that are contributing to the environment at large along with providing affordable products. The FMCG sector has been at the epicentre of this change: In August 2021, the Centre announced a ban on single-use plastic, to contain pollution. In February this year, the Central Pollution Control Board (CPCB) said the ban would take effect from 1 July. So, amid challenges how has the year been for the beverage companies?

Parle Agro, a legacy brand in the Indian beverage industry, has been creating innovative products and iconic brands since 1985. Today, the company's major focus is to build an innovative approach that would provide a necessary boost to India's self-reliant ecosystem. The company imported huge quantities of paper straws until it came up with its own infrastructure. The per day requirement of straws at Parle Agro is around 16.78 million. "We have a humongous per day requirement of paper straws. There was no source available here that would have helped us with the requirement," said Schauna Chauhan, CEO, Parle Agro.

The company has been facing multiple challenges in the year, including a shortfall of capacities, teething problems in starting up and delays in obtaining statutory approvals on time. "This prolonged the import of straws for a longer period of time than expected. Unfortunately, we had to import straws at exorbitant prices in order to ensure that we did not have a shortfall. Meanwhile, we were able to bring in between six and seven new MSME's that are able to manufacture PLA straws in India," said Chauhan, adding that It would take until 2023 to see positive results, even though this remains a work in progress.

Most of the paper straw requirements of Dabur India are met through imports, which have severe cost implications. "We had completely shifted to paper straws as part of integrated packaging for our packaged fruit juices from June 2022 onwards. Since there was no sustainable alternative for integrated plastic straws available in the country, we have been importing paper straws. Even today, most of our paper straw requirements are met through imports, which have severe cost implications and also lead to loss of revenue to the government exchequer," said Rahul Awasthi, head-operations, Dabur India Ltd.

Amid challenges, the beverage companies have been innovating to stay ahead of the curve. PepsiCo India's core focus continued to cater to the evolving consumer needs and provide them positive choices by introducing new flavors and launching new products. The company witnessed a seismic shift in omnichannel channel growth with sales significantly outpacing in-store growth across metro cities. In-home consumption remained strong while out-of-home and on-the-go consumption steadily rose in the post-covid era. "Our product portfolio in foods and beverages are in high demand and the digital consumer category continues to expand with brands building value propositions in a socially networked world thereby significantly driving growth for PepsiCo India," said Ahmed ElSheikh, president, PepsiCo India.

The company continued to witness strong demand from rural India for some time now, for both its foods and beverage products. "This is largely due to labour migration, increased digital penetration and enhanced distribution of our portfolio and rural India switching from unbranded loose products to branded ones," he said, adding that moving forward, the strategy will be to focus on product and consumer experience innovation, prioritizing profitable channels, diligently managing SKUs, and driving execution and productivity across the system.

Business to business company Tetra Pak, a packaging solutions company, have aided firms in adapting to the shift in consumer behaviour by providing innovative solutions. It introduced Tetra Stelo Aseptic package for The Coca-Cola Company and Tetra Pak Reflect, the first ever locally manufactured holographic packaging material in India, in collaboration with Warana Dairy. "In the past three decades of Tetra Pak's presence in India, we have worked hard to establish a strong recycling ecosystem in India, with over 40 per cent of cartons being recycled. In the coming year, we are working on innovative packaging solutions, in line with our vision to protect people, food and the planet," said Tetra Pak's spokesperson.

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