How Food Delivery Startups revolutionised Food Packaging Industry?

The sixth largest in the world, the Indian food industry, has seen exceptional growth in terms of size and revenues over the past five years. Retail startups contribute about 70% to the total sales. While food processing companies account for the balance 30% of the country’s total food market.

Let us briefly look at the recent trends in this industry. How food delivery startups are revolutionising the food packaging industry?

Food packaging Startups

The FoodTech Sector:

With new consumer demographics comprising young, urban-dwelling working professionals driving its growth, foodtech has been amongst the most promising sectors within the Indian startup ecosystem. Segments like grocery delivery, personal chefs, box delivery, and on-demand meals are becoming increasingly popular, leading to an unprecedented number of startups joining the race for market share.

The entry of technology and mobile application-based services has led to a massive transformation in how the food industry, especially the retail sector, operates. The high-growth sector, the industry is poised for even greater growth with the use of tech and estimated to $894.98 Bn in size by 2020, while the food service industry is expected to reach $78 Bn by 2018. According to a Bloomberg report, more than 400 food delivery apps were operational in India between 2013 and 2016.

Statistics 

The online food delivery industry grew by 150% year-on-year, with an estimated Gross Merchandise Value (GMV) of $300 Mn in 2016. While some ventures with a unique idea managed to survive, others succumbed to market forces simply due to bad timing or lack of funding options. The sector received a mere $78 Mn worth of funding in 2016, in comparison to the $500 Mn in 2015. With the industry moving towards consolidation to build brand portfolios comprising multiple services and products, the sustenance of standalone food delivery companies will be difficult in the long term.

While aggregators like :

1. dominant marketplaces in the country

  • Zomato
  • Swiggy
  • Foodpanda

2. Startups are making waves in the pure-play cloud kitchen segment

  • FreshMenu
  • Box8
  • Faasos

In addition, B2B foodtech startups like HungerBox, which recently raised $2.5 Mn, are identifying newer segments to target and are positioning themselves uniquely in the market.

In 2017, Uber launched UberEATS, OLA acquired Foodpanda, and Amazon launched its delivery service. These three giants will take this high-profile battle for market share in the Indian foodtech space to a whole new level, in a completely different industry. The overall impact of the rising competition in the foodtech space will only help the industry grow in the next few years. Ventures in the foodtech space need to explore models that offer multiple monetisation channels.

Indian food is gaining global appeal – Marks & Spenser sells ready-to-serve chicken tikka masala in the UK! At the same time, our habits are changing, and we are more accepting a global palate – parathas and lassi at a breakfast are being replaced with muesli and a smoothie!

How food delivery service is revolutionizing food packaging industry?

With these trends, the food industry is evolving like never before both in India and globally. Exponential growth is evident across markets of varying income levels and stages of maturity, and also in various categories of foodservice; in fact, every global category saw an increase in the percent of sales attributed to delivery from 2009-2014, ranging from a 0.1% increase in cafés/bars and self-service cafeterias to a nearly 8% increase in home delivery/takeaway.

This means that many restaurants who may never have offered delivery service before are now doing so for the first time. Those that do already offer delivery are having to do it much more often—and on a much larger scale. This has caused many to begin thinking about packaging in new ways.

Trends in food packaging vary depending on the food product category. Also, if the packaging is for foodservice (delis, takeout etc).

The overall trend in food packaging encompasses two goals: reduce impact to the environment while still differentiating a brand and food purchasing experience through packaging innovation.

Food packaging

Here are few changes seen in the way packaging is perceived in the food industry:

1. Desire for convenience:

More people are eating on the go. Packaging needs to be easy to open food and then reseal them, without the food getting all over the place or going bad. More single-sized versions of candies and other snacks are visible for this reason. Pouches that do not reseal are old school. Bags that rip apart upon opening are also an experience which we might forgive due to their low prices. That would be less desirable for higher price point foods.

Companies are making efforts to be able to maintain shelf life and protect the contents while using as little packaging as possible. You’ll see more single-serve drinkable foods, soups etc. In aseptic packaging (those cartons), also for people on the go, for lunch or people who just need smaller sizes.

2. Appreciation of design:

Between the vintage design trend and clean design popularized by Apple (as well as the “hassle free packaging” trend), consumers notice design and trust brands that have an elegant experience evaluating the brand, opening the packaging, re-sealing the packaging and disposing of packaging.

One of the best examples of the brands using design connect with consumer is Paperboat. It cleverly plays on the nostalgic psychology of the consumer with its beautiful packaging. The design on the packaging successfully echoes the theme of scorching sun, summer holidays and a loving mother, using bright colors, graphics, unconventional bold fonts and mischievous content. The sleek, pear-shaped pouch is hard to miss, among similar looking bottles.

Paperboat food packaging

3. Desire to do good:

Companies are differentiating themselves by carefully sourcing packaging that supports environmental goals. Food brands are also making an effort to minimize packaging, which also can reduce production cost.

4. Consumers appreciate this to a limit:

Recyclable coffee mugs

Recycled cartons that food seeps through are not a good customer experience. Also the case with recycled coffee cups that also require a sleeve. Or they would otherwise collapse!

5. Certification mania:

With more brands being certified as organic, whole grain, Non-GMO Project Verified, gluten free etc. There is noticeably more space on packaging dedicated to stories and labels.

6. Cans and bottles over plastic:

Look at the drink aisles and you will see more energy and natural beverages in bottles and cans rather than plastic. These types of packaging have a more solid, pleasing, pure consuming experience than plastic. Of which we have been warned may or may not harm us.

Moving forward, delivery as a category is expected to grow more popular. But also more competitive, with an increasing number of players involved in the space in varying capacities.

In extreme cases, services like UberEats remove the bond between restaurant and diner almost entirely. They instead allow the diner to order from pre-selected dishes with no interaction with the restaurant at all. This means that packaging will continue to be a differentiator in the space. Also, many operators will soon be seeking out newer, better, and more functional packaging systems.

Growth in delivery as both a service and a lifestyle.

It also means that consumer expectations of the delivery experience are changing. Delivery is no longer just about cheap, quick, convenience. It’s about the luxury of choosing a dining experience, on demand, to enjoy at home.

Operators should consider the at-home delivery experience they provide to be every bit as important as what they might provide in the restaurant. Packaging is a very important tool in creating that experience. The food packaging should be equally refined to provide customers with the culinary experience the chef intended. After all, we eat with our eyes first. The presentation is everything!

If you are willing to know more about recyclable bags you can checkout “Switch from Plastic to Recyclable Eco-Friendly Kraft Paper Bags”

1 Comment

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