Paper bags offer great opportunity to replace single-use plastic bags

Started in 2019, Adeera Packaging is one of India’s largest manufacturers of sustainable packaging. The company replaces around 20 plastic bags per second with environment-friendly packaging and save 17,000 trees per month from being chopped by using recycled and agro-waste-based paper to make bags. Sushant Gaur, Founder and CEO at Adeera Packaging in an exclusive interview with Bizz Buzz, says, “We provide daily deliveries, fast turnaround times of 5-25 days, and solutions through the customization of bags to our customers. Adeera Packaging was formed as a manufacturing company, but over the years we have realized that our value lies in the service that we provide our buyers. We deliver our product to over 30,000 pin codes in India.” Adeera Packaging has set up five factories in Greater Noida, and a warehouse in Delhi, and aims to scale up manufacturing by setting up a unit in the US by 2024. The company currently sell five crore paper bags a month

Can you share more details on how these paper bags are made using agri waste? Where do they collect the waste?

Agro-waste-based paper has been made for a long time in India because of the lack of hardwood and long fiber trees. However, historically these papers have been made for the corrugated box sector where high-quality paper is usually not required. We have incubated the development of these papers in Low-GSM, High-BF, and supple paper which can be used to make high-quality paper bags at a low cost with minimum impact on the environment. Since our industry is minuscule in front of the corrugated box market no paper mill was interested to take up this mandate without motivated buyers like us. Agro-waste like wheat husk, paddy straw, paddy crop roots, etc. collected door to door from farms along with wild grass. Fibers are separated in boilers that use paryali as fuel.

Who came up with this idea? Also, if the founders have an interesting background story on why they started it?

Sushant Gaur - Started this company after being inspired as a 10-year-old in school by the say no to plastic campaigns organized by the environment club. A 23-year-old when I realized with the oncoming ban on SUPs, this can be a profitable business I jumped the gun and switched from a potential career as a professional drummer for a famous rock band to manufacturing. The business has grown 100 per cent year-on-year since then to be on track for a turnover of Rs 60 crore this year. To achieve carbon neutrality in their bags made from recycled paper, Adeera Packaging is opening a manufacturing unit in the US. Recycled Paper's raw material (paper waste) comes mostly from the USA, it is then recycled and shipped back as finished products to the USA causing tremendous carbon consumption that can be avoided by starting local factories close to where bags are being consumed.

What is the story behind Urja packaging? And how did you get into the paper bag manufacturing business?

I had gone to the Ministry of Environment to seek permission to purchase technology for a renewable energy generator. There, I came to know that single-use plastic was going to be banned soon, with this insight in mind I shifted to paper bag manufacturing. According to research, the global plastic market is at $250 billion, while the global paper bag market is $6 billion right now though it was at $3.5 billion when we started. I believe paper bags have a great opportunity to replace single-use plastic bags.

In 2012, just after completing my MBA, I started my own business in Noida. I invested Rs 15 lakh to start Urja Packaging, which manufactured paper bags. I envisioned strong growth as demand for paper bags was emerging alongside rising awareness of the negative impact of single-use plastic. I started Urja Packaging with two machines and 10 employees. Our products are made with recycled paper and paper made from agro waste that is procured from third parties.

What makes Adeera different from other paper bag manufacturers?

At Adeera, we consider ourselves as service providers and not manufacturers. Our value to our customers is not in the manufacturing of the bag but in the on-time delivery of the bag without a single exception, always. We are a professionally run company with a core value system in place. As a long-term plan, we think five years ahead and are currently planning sales offices in the USA. Quality, Service and Relationships (QSR) are the main tenets of Adeera Packaging. The company has diversified its product range from conventional paper bags to handle-carry bags and square bottoms, enabling its entry into the food and pharma industries

How do you see the company and the industry in the future ahead? Any short-term and long-term goals?

The paper packaging industry needs to grow at 35 per cent CAGR if it is to be able to take over plastic bags. FMCG packaging is much larger than takeaway packaging and that industry is very mature in India. We see adoption happen later in FMCG, but will happen in a very organized manner. If I talk about the long term, we hope to have a large market share in FMCG packaging and co-packing. In the short term, we have our eyes set on the US market where we want to enter with a physical sales office and a manufacturing unit. For Adeera Packaging, sky's the limit.

What are the different strategies you use for marketing? Tell us about any growth hack which you pulled off.

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 at us 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 two years even though the market loved it as it removed any chance of skiving on quantities or paper grammage.

How do you plan to expand the customer, product, and team base in the future?

We have started hiring from top-B schools in India and want to build the best team in the world for the 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 per cent, 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 sales force for expansion and are growing capacities to feed this growth.

What have been some of your failures, and what have you learned from them?

We could not predict our fast-paced growth when we started Adeera Packaging so instead of being in 1 large 70,000 sq ft factory we are in 6 different locations in Delhi NCR, hence increasing our overhead costs. We haven’t learned anything from this as we continue to make this mistake.

How has your business evolved over the years?

We have grown at 100 per cent CAGR since inception and as the business has grown we have expanded our managerial bandwidth by inviting co-founders into the company. We are now looking at global markets with aggression rather than uncertainty and are moving to quicken our pace of growth. We have also implemented systems to handle our growth, although truth be told, those systems need constant updating.

Your success mantra of becoming an entrepreneur?

Unwavering hard work, 18-hour days are meaningless if done once in a while. Consistency and focus are the building blocks of an entrepreneur, but constant learning is what builds the floors on top.