Bengaluru: Consumers have started judging products by their packaging. So, India’s new-age food and home care companies are responding by spending significantly more on packaging as demand for preservative-free and low-chemical products moves into the mainstream.
Anicut Capital-backed spices startup Khetika has increased its packaging-related R&D investment by almost 50% over the past two to three years.
Dairy company Akshayakalpa Organic has moved to paperboard packaging, a material that, when layered with a thin polymer or aluminium coating, offers strong moisture resistance, structural rigidity during transit and adequate oxygen-barrier properties to keep milk fresh.
Large packaging manufacturers including Alternicq (formerly Manjushree Technopack) are exploring newer formats such as multi-layer barrier films and mono-material recyclable laminates to meet their requirements, according to managing director Thimmaiah Napanda.
Companies that don’t use preservatives in their products are turning to packaging to keep their products fresh and intact through India's long and often difficult supply chains. This also comes as demand for healthier products accelerates sharply.
Farmley’s Healthy Snacking Report 2026 found that 55% of consumers actively seek preservative-free snacks, while better-for-you products now account for over 30% of consumer spending in the packaged food and nutrition category. Value-added products account for almost 90% of oats and millet sales on Flipkart, about 85% of cereal bars and 80% of honey.
“Attributes such as no preservatives, no added sugar, and clean-label formulations have become strong indicators of quality and trust, increasingly influencing purchase decisions across the category,” said Nishant Dalal, vice-president (consumables, FMCG and healthcare) at Flipkart.
Globally, the healthy snacking market is valued at $107.3 billion and projected to reach $200.5 billion by 2035. India is expected to outpace that average, growing at an almost 10% CAGR, driven by rising incomes, health awareness and the rapid growth of digital commerce, according to Farmley’s report.
Material shift
The technical shift inside these packs is substantive.
Conventional food packaging—typically single-layer plastic film at about 20-30 microns—relied on preservatives in the product to compensate for its limited ability to block oxygen and moisture. Companies removing those preservatives are switching to multi-layer laminate packaging combining materials like metalized BOPP, PET and CPP, which create a far more effective barrier against the elements that degrade food, according to executives.
Khetika and Akshayakalpa are also adding nitrogen flushing—replacing oxygen inside the pack with inert nitrogen—to extend shelf life without any chemical additive. These upgrades can push packaging costs 30-60% higher per unit than conventional alternatives.
Khetika has introduced easy-pour nozzle packs for its batter range—a format change that simultaneously minimizes transit damage and reduces mess for consumers.
Packaging typically accounts for 10-40% of an FMCG product's total cost—and it can be as high as 45-50% in dairy and beverages.
“For preservative-free brands, the pack isn’t just protection. It’s the difference between a product being viable on shelf or not,” Akshayakalpa’s founder and chief executive officer (CEO) Shashi Kumar told Mint.
According to Devangshu Dutta, founder and chief executive officer of consultancy Third Eyesight, most consumers don't look at the technical differences between a metallized laminate and a basic pouch but recognize what feels sturdier and looks cleaner.
“Packaging design affects performance by providing longer shelf-stability, leakproof and tamperproof seals, better pack integrity during transportation and aesthetically standout designs, all of which certainly impact customer perception and actual sales positively,” Dutta said. “In modern trade all of these factors also improve the retailers' willingness to stock the product and give it prominence.”
ITC's strategy
At ITC Ltd, which owns legacy food brands and recent acquisitions like protein-nutrition brand Yoga Bar and premium chocolate line Fabelle, the approach varies by product. Yoga Bar’s protein shakes achieve their shelf life through hot-fill and aseptic processing technologies — the same methods used for ITC’s Sunfeast smoothies and B Natural range —rather than through preservatives alone.
“Both the packaging material and the packaging process contribute to product stability,” said Biswarup Chakrabarty, VP and head of packaging development (foods division) at ITC.
For Fabelle, packaging costs are meaningfully higher, but for a different reason.
“In the luxury segment, packaging is not merely protective, it is an integral part of the overall brand experience,” Chakrabarty said.
“Practically speaking, premium packaging must be supported by a healthy topline—as a ballpark estimate, say, ₹200 crore or more—for it to not be a margin drag,” said Dutta.
ITC also draws on its in-house paperboards and packaging business to develop and test innovations before engaging external suppliers, giving it a structural advantage that most new-age companies cannot replicate, the executive noted.
Shelf appeal
Beyond functionality, aesthetics are being overhauled. Matte finishes, clean typography and minimalist design have replaced the loud, busy packaging of legacy snack products, functioning as a visual shorthand for ingredient transparency, according to Dutta.
Premium rusk commands almost double the demand of standard alternatives on Flipkart, premium namkeen about 1.8 times and well-packaged dry fruit assortments approximately 1.5 times.
For popular brands, premium rusk would be ₹40-60 more expansive than regular rusk. The difference on account of packaging changes depends on factors including ingredients, pack sizes and packaging investments.
“Packaging plays an important role in shaping consumer demand, particularly in online commerce, where it is often the first interaction a consumer has with a product,” said Dalal of Flipkart.
For newer brands like Yoga Bar, design choices such as vibrant colours, modern typography, clean visual layouts are equally deliberate.
“The objective is to create a strong shelf impact while remaining consistent with the brand world,” said ITC’s Chakrabarty.