StartupTalky presents Recap'22. This is a series of interviews in which we conduct in-depth discussions with founders & industry leaders to understand their growth in 2022 and their predictions for the future.
Paper bags are bags made from paper or paperboard, which is a type of thin cardboard. They are commonly used for carrying groceries, food items, and other small items, and are a popular alternative to plastic bags due to their environmental benefits.
Paper bags are often preferred over plastic bags due to their environmental benefits. They are made from renewable resources and can be recycled, whereas plastic bags are made from non-renewable resources and can take hundreds of years to break down in the environment. In addition, paper bags have a lower carbon footprint than plastic bags, as they require less energy to produce and transport.
There are also a number of government initiatives in place in India to promote the use of paper bags and other sustainable packaging solutions. For example, the government has implemented a ban on single-use plastic bags in many states and has implemented other policies to encourage the use of alternatives such as paper bags. These initiatives may also contribute to the growth of the paper bag industry in India.
The compound annual growth rate (CAGR) of the sustainable packaging market varies depending on the source and the specific segment of the market. However, according to a report by MarketsandMarkets, the global sustainable packaging market is expected to grow at a CAGR of 8.2% during the forecast period of 2020-2025.
This growth is driven by increasing consumer awareness about the environmental impact of packaging, government regulations promoting the use of sustainable packaging, and growing demand for eco-friendly products.
For this Interview, we invited Mr. Sushant Gaur, Founder & CEO of Adeera Packaging, and we talked about the growth, challenges, insights, and future opportunities in the Packaging industry.
StartupTalky: Sushant, What is Adeera Packaging all about? What was the vision with which you started the company?
Sushant: Started in 2019, Adeera Packaging is one of India’s largest manufacturers of sustainable packaging. We replace around 20 plastic bags per second with environment-friendly packaging and save 17,000 trees per month from being chopped by using recycled or agro-waste-based paper to make bags.
Adeera Packaging’s purpose is to make the planet a better place for future generations which we want to achieve by creating a global presence to democratize supplies of environment-friendly packaging.
StartupTalky: What are the major USPs of your packaging paper?
Sushant: At Adeera Packaging, we use odor-free, food safe and high-strength paper made from sustainable sources tracked by the forest stewardship council. We are a BRCGS grade A facility for manufacturing of food safe products along with having many other certifications. However, we consider our always-on-time & just-in-time service to be our USP. As a provider of take-away packaging, we know our value is in consistently timely delivery across the world.
StartupTalky: How has the paper bag industry changed in recent years and how has your company adapted to these changes?
Sushant: The paper packaging industry has become extremely price-sensitive over the last 3 years due to frequent fluctuations of raw material prices. Due to our relationships with suppliers, we have always remained informed of the short-term price trend and have been able to hedge our customers to give them price stability. Keeping track of macros was irrelevant to our industry for the longest time but now we have started to see paper behave more as a commodity than ever before.
StartupTalky: How do you stay up-to-date on the latest trends and developments in the paper bag industry?
Sushant: We have strong relationships with industry leaders in India and across countries like USA, Indonesia, China & Czech Republic summation of whom are able to give us a clear picture of the macros. We track industry publications for innovations and global indices for current price trends and also track all available imex data for competitor analysis apart from having eyes on the ground through our sales and procurement leaders.
StartupTalky: What key metrics do you track to check company's growth and performance?
Sushant: We track our production efficiencies uniquely, we optimize for keeping 15-20% of our capacity free for any sudden spike in demands, delays in RM or new product development. Mostly this remains unutilized for 80% of any given year but we cannot promise the customer no delays unless we keep this capacity as spare.
StartupTalky: What were the most significant challenges Adeera faced in the past year and how did you overcome them?
Sushant: We faced a challenge when 90% of our production team went back to their home-town during the start of the first lockdown. As a culture we always want to be there for our team members as much as we can so we paid full salaries even to the people who were back home. Not only did we get our people back as soon as it was physically possible for them to come but we never faced a challenge in technical hiring as news of what we did percolated to the larger technical community in our industry.
StartupTalky: What are different strategies you use for marketing? Tell us about any growth hack which you pulled off?
Sushant: Back when we started we used colloquial terms for search engine optimization despite all consultants advising us against it. Some of the larger advertising channels laughed us off when we asked to be listed in the “Paper Lifafa” category.
So we did not list ourselves on any platform but used 25-30 free classified post websites to market ourselves. We knew our customers think in their mother tongue and will search for paper lifafa or paper thonga and we were the only ones present on the web for these keywords. Since we did not list on any large platform we had to further innovate. We started India or probably the world’s first youtube channel for sales of paper bags that is still running strong.
Apart from this, we introduced selling by weight instead of pieces which was a pseudo-viral move for us as a change of unit of sale is a drastic change no one in the market was able to copy us for 2 years even though the market loved it as it removed any chance of skiving on quantities or paper grammage.
StartupTalky: What opportunities do you see for future growth in paper bag industry in India and the world? What kind of difference in market behavior have you seen within states in India?
Sushant: The usage of Paper Packaging in FMCG goods is rising and will soon grow to become the highest segment in the paper bag industry in India and around the world.
In states with higher literacy levels, the market sentiment is against the use of single-use plastic even if the law is not strictly implemented. This change is very positive for our country as SUPs are being looked at as an environmental hazard which they are.
StartupTalky: What lessons did your team learn in the past year and how will these inform your future plans and strategies?
Sushant: We have been researching the US market for the last one year and observing a trend of growing use of recycled paper. We believe our future is in becoming a truly global organization by diversifying into different geographies across the world starting with the USA as a sales & a manufacturing hub.
StartupTalky: How do you plan to expand the Customers, Product and Team base in the future?
Sushant: We have started hiring from the top-B schools in India and want to build the best team in the world for industry. To do this, we have also started to work actively to attract talent. Our culture has always been attractive to young minds to grow and be independent.
We are diversifying our products by adding new production lines every year, next year we plan to grow our capacity by 50%, most of it will come from new products. We have the capacity to make 1 billion bags per year as of now and will be taking it to 1.5 billion.
One of our core tenets is long-term relationship building backed by quality and great service. We are perennially hiring in our salesforce for expansion and are growing capacities to feed this growth.
StartupTalky: One tip that you would like to share with people reading this article who want to get into entrepreneurship?
Sushant: I would recommend studying great entrepreneurs, how they built their businesses, and especially how they behave when given tough problems. Books (printed & audio), blogs, podcasts & Youtube channels are great sources for study material. I dedicate at least 2 hours every day, sometimes more, for the last many years towards this.
We thank Mr. Sushant for spending his valuable time and sharing his learnings with all of us.