India is set to ban the production, import, stocking, distribution, sales and use of a variety of single-use plastic products today. Included in the ban are single-use plastic straws, which will likely disrupt the sales of small packs of soft drinks that are very popular in the country.
GlobalData's market analysts reveal that the margins on small soft drink packs are relatively small but contributed to 35.1 percent of all overall soft drink sales in 2021. Small plastic straws are quintessential accessories for the packs and will drop sales until paper alternatives are available.
“Plastic straws are a part and parcel of the consumption experience of small cartons and pouches packs. Switching to bottles, cups, or pack formats with drinking spouts is a cost- and time-intensive proposition for soft drinks companies. In addition, the domestic manufacturing capacity for recyclable, biodegradable, and edible straws may prove insufficient in time for the ban. Moreover, the high import cost of such sustainable straws will drive up prices of the small packs at the cost of its mass-market appeal." Said Bobby Verghese, Consumer Analyst at GlobalData.
"While the change is painful, in the long-term, companies can gain consumer goodwill given that sustainable/environmentally friendly feature is an essential factor for 56% of Indian consumers while purchasing products, according to GlobalData’s 2022 consumer survey."