Tetra Pak : packaging itself for the customer
By Usha Somayaji | 21 Jul 2001
There are many who mouth the slogan, customer is king, but few who actually bring it into practice. Tetra Pak India, the liquid food packaging solutions company, can be said to be one of these.
Working with customers is not new for Tetra Pak, whose entire marketing effort has been centered on helping the customer promote their products. The company is already well known for its joint sponsoring of events, exhibitions and promotional campaigns that help customers'' grow their businesses. The focus, always, is on safety, freshness, naturalness, longer shelf life and convenience of the customer''s products, albeit assured by Tetra Pak packaging.
It has suitably fine-tuned its product offerings, in line with market demands, addressing market compulsions. Now it has gone one step further -- to the extent of restructuring its own organisation to make it more customer-centric.
"We can only grow as fast as the customer," believes the new managing director at Tetra Pak India, Igor Akimov, as did Lars Nygren, the managing director before him, and Lila Poonawalla, before Nygren, underlining the new initiatives taken to put this credo into action.
The company, which began operations in India as a 100 per cent subsidiary of Tetra Pak International, a Tetra Laval company, in 1997, first came up with only one packaging solution in India : the Tetra Brik Aseptic cartons. Fruit juice and edible oil were the two applications that found wide usage, and to a lesser degree, milk, despite Tetra Pak''s efforts at extolling the virtues of UHT (ultra heat treated) milk packed in Tetra Brik- assured quality of milk in tamper proof packaging, and longer shelf life in non-refrigerated conditions.
Despite much effort by Tetra Pak, it did not find many takers in the milk industry -- convinced, though they were, of the benefits, cost was a constraint. It made milk that much more expensive. Convenience or not, the Indian milk consumer simply didn''t bite. The product had failed to meet Tetra Pak''s own founder, Ruben Rausing''s thumb-rule : "a package should save more than it costs."
Yet milk had to be addressed, India being the largest milk producer in the world, with an annual production of 81 billion litres, only 14 per cent of which was processed. Milk was too large a market to be ignored.
Thus the offering of a cheaper alternative, Tetra Fino Aseptic, a lower cost solution, but with the advantages intact -- made up of the same six layer packaging that prevents the penetration of light and air into milk, thus preserving it for longer periods of time, un-refrigerated. Only, this time it wasn''t the stand up carton, but in pouch form, thinner, using less paper grammage (no paper board), using less expensive machinery, and hence was, on the whole, a more affordable proposition.
"In India, most of the milk operators are regional players, and do not need the higher shelf life offered by the thicker Tetra Brik cartons, " says Jaydeep Gokhale, manager, promotions and communications. "For the regional operator, the less expensive Tetra Fino Aseptic is a more viable option."
Within a year of the launch, Tetra Fino offtake reached 400 million per year , of a total of 750 million packages produced, although much of the production of Tetra Fino has found its way into exports for China, which seems to have an inexhaustible demand. So much so, Tetra Pak will be setting up two Tetra Fino plants in China, investing 15 million dollars, to cater to the demand.
The Tetra Fino project in Takwe near Pune, was conceived as one that would cater to the global market, and all development on the Tetra Fino product has come from out of there.
In India, Tetra Fino has found quick acceptance among the likes of the Andhra Pradesh Dairy Development Corporation and the Karnataka Milk Federation, who find the solution more "affordable," as compared to the Tetra Brik, and have witnessed a resultant increase in the milk offtake , after opting for this packaging.
This year, Tetra Pak India will come out with a third packaging solution, the Tetra Wedge Aseptic, which is again a low cost solution similar to the Tetra Fino, but will address the non-milk segment. Slated to be positioned as a ''new age'' packaging for youthful end users, the Tetra Wedge Aseptic will be used for packing new and trendy drinks like iced tea, fruit juices, energy drinks and other beverages.
Simultaneously, the company has set about restructuring its own working to make itself even more customer focused.
Key accounts have been identified, and account managers assigned for each of these key customers. It is the responsibility of each of these key account managers to study the customer''s business, his market, the market forces, needs, difficulties, so as to understand the compulsions, offer suitable solutions and participate in them. -- the idea being, if the customer is helped to grow, the company will also grow.
"Unlike a salesperson, the key account manager goes beyond mere sales. He holds responsibility for helping the customer grow his business, not just pushing his company''s products. So he must understand the business, and the market of the customer. His attitude has to be, ''I am your partner in growth,''" says a company official.
Teams have been built around these key account managers, drawn from different functions across the organisation. Accordingly, every person in the organisation is geared to be more customer-aligned, so that the whole team will act in tandem to meet the needs of the customers, thereby assisting in providing speedy service and solutions.
Tetra Pak even proposes to help finance customers'' investment needs in adopting Tetra Pak packaging, or to upgrade their equipment. "We can use the financial muscle of the parent company to help our customers," says Akimov. "We are prepared to help with the technology, with marketing , even with finance." As one company official put it, "The objective is to make it difficult for the customer to say ''no'' to our products."
