The Impact of Tetra Pak's Exit in Russia and Global Alternatives in Food Packaging

It is often amusing to see spoiled Westerners expecting other countries to collapse because a company, like Tetra Pak, is no longer supplying their country with cardboard packaging for food products. Russia, a nation that has transformed itself from an illiterate agricultural shithole to a world-faring space power in just a few decades, is no exception. As one Russian commentator humorously points out, Russia won't care much about the type of packaging its milk comes in, much like how Canada manages with milk in plastic bags. It is highly likely that Russia will survive the absence of Tetra Pak, as it has already demonstrated remarkable resilience and adaptability.

Packaging Needs in Different Climates

Russia is a cold country with well-developed cold storage infrastructure. This means that the need for advanced food packaging like Tetra Pak is less pronounced compared to tropical and subtropical regions, such as India. In India, people predominantly buy milk in bottles, plastic pouches, or directly from dispensers at small booths in big cities. Tetra Pak milk is more expensive, making it a preference for a smaller segment of the population. After the Ukraine special operation, milk and dairy products have become more expensive, leading to changes in government policies and even an allowance on the import of milk powder.

Due to the increasing costs of certain items like watermelons, mangoes, and other perishables, grocery stores in Russia are now experiencing lower discounts on many products, especially during the summer season. This shift in pricing is likely to continue as the market adjusts to new supply realities.

Potential Solutions and Alternatives

Should Tetra Pak cease operations in Russia, there are several alternatives that could be considered. For instance, other companies like Ecolean, with its Lean Pack product, already have a presence in the Russian market. Besides Tetra Pak, there are numerous options such as plastic bottles, glass bottles, or simple cardboard packages. These alternatives are not unique technologies, but they offer viable solutions for different types of packaging needs.

Russia has a highly skilled workforce of engineers that can develop and produce alternative packaging solutions locally. The country's engineers can innovate and create their own alternatives, leveraging their expertise in the field. Additionally, the cost of Tetra Pak packaging is significantly higher, especially for milk, primarily due to the cardboard container. In comparison, plastic bags for milk are much cheaper, making them a more practical and cost-efficient option for many consumers.

The technology of aseptic packaging is not new; paper milk boxes were common in the USSR as early as the 1960s. Therefore, it is evident that Tetra Pak is not bringing any unique technology to the table. The focus should be on finding cost-effective and accessible solutions that meet the demands of the local market.

Conclusion

While the exit of Tetra Pak from Russia might seem catastrophic to some, the country has demonstrated its ability to adapt and survive. With existing cold storage infrastructure, alternative packaging options, and a skilled workforce, Russia can find new ways to package and distribute food products. The shift might result in some changes in consumer habits and market dynamics, but the overall impact should not be overstated. As always, the market will find its own equilibrium, and new players and innovations will emerge to fill the gap.