Known for jams made in the hill town of Panchgani, Maharashtra, Mapro Foods Pvt. Ltd recently had an unplanned expense—it had to send its purchase manager to China to buy glass bottles for its jams and sauces.
Entrepreneur Karen Anand’s company Karen’s Gourmet Kitchen (KGK) has had to shut down production a number of times recently because of a similar shortage of bottles. Anand writes a food column for Mint’s Lounge.
A sharp jump in the consumption of liquor and beer in India, along with expansion by large makers of jams, ketchup and other fast-moving processed food items, has left the smaller players in, well, a jam. Small and medium players, trying to fill large orders from retail players such as Reliance Retail and Aditya Birla Group’s ‘More’ chain, say they are being held back due to the shortage.
The closure of a few existing units, combined with little significant expansion in glass manufacturing, have added to the woes of small food processors. The Pondicherry and Nashik glass units of Hindustan National Glass (HNG) have been closed for many months. Mahalaxmi Glass in Mumbai, too, has shuttered after operational problems.
Processing industries blame liquor manufacturers for taking the bulk of existing glass bottle makers’ capacity.
“We have had to close the unit a number of times because of shortage in supply of glass bottles,” says Yadu Sankalia of KGK in Pune. The company currently requires 50,000- 60,000 bottles of various sizes every month. With supplies to Reliance Retail to commence soon, its requirement will jump to more than 100,000 bottles.
The problem is not confined just to jam and ketchup, but also extends to the pickle industry, says Pradeep Chordia, managing director of Chordia Food Products, a Pune-based ketchup and pickles firm with an annual turnover of Rs30 crore. The company needs 350,000 glass bottles every month. With bottles unavailable, it is packing pickles in laminated pouches.
“People want to see pickle before buying it, so I still need 50,000 bottles for this every month,” Chordia says. The company, which makes 15 tonnes of ketchup every day, recently shut down its ketchup factory for a few days after a promised delivery of bottles failed to turn up.
HNG, a unit of the Hindustan Sanitaryware & Industries Ltd (HSIL), is the largest domestic glass manufacturer with a capacity of 1,000 tonnes a day. The group also has another player in the segment, AGI Glasspac, which makes bottles for food and liquor units. The third large player, Gujarat Glass Industries, caters to the pharmaceutical and cosmetics industry.
A senior executive in HNG, who requested anonymity, said larger glass manufacturers are unable to take small orders because the glass-making machines need to produce a minimum number of bottles to make it commercially viable.
Arun Kumar, president of AGI Glasspac, cites a capacity constraint for the last four-five years. Besides, the liquor and beer industry has grown 25-30% in parts of the South and West. Kumar said the liquor industry consumes 540,000 tonnes of glass—almost half of the 1.2 million tonnes produced.
“It is easy to deal with one bulk buyer than too many smaller buyers,” he says.
The market leader in the jams and ketchup segment, Hindustan Unilever Ltd, says the company faces no bottle shortage, but declines to give details on its production, citing “competitive reasons”.
Pushed against the wall, food makers are exploring various options. Companies, such as KGK and Mapro, are now shifting some products such as mayonnaise and ketchups into transparent plastic bottles for want of a better solution—but not all products lend themselves to such packaging.
Jams, for instance, need to be hot-filled in order to prevent formation of a vacuum in the bottle (this leads to faster spoilage), ruling out plastic. Pickle manufacturers are trying to phase a portion of their production to clear or laminated plastic pouches. It must contend, though, with traditional Indian homes who fear corrosion or contamination from plastic, believing that the acidic, spicy nature of pickles does not go with plastic.
Mapro will make its first purchase of glass bottles from China this week. “The purchase will be large since we want to stock up to avoid disruption of our operations,” says Mayur Vora, managing director of the company.
Vora’s company has been transporting glass bottles from a factory in Kolkata. The cost of carrying, combined with losses due to breakages in transit, makes it more expensive than Chinese imports, he says. And local prices have increased 20% over last year. “Besides, Chinese manufacturers have larger number of designs and have no problems making new moulds at more affordable costs,” he said. “A design that stands out is very important given the clutter on retail shelves.”