Eco-Friendly Packaging For FMCG Business 2024? Here Are The Facts

Starting a refill perfume business has great potential for high profits, thanks to the strong demand for fragrances. This demand is particularly strong among urban dwellers who lead busy lives and need to stay fresh in hot and sunny environments. It's no surprise that the demand for perfumes and fragrances continues to rise.

According to Statista, revenue in Indonesia’s fragrance market is expected to reach USD 56.02 million in 2024. The market is projected to grow at an annual rate (CAGR 2024-2029) of 4.97%, resulting in an estimated market volume of USD 71.38 million by 2029.

Contrary to popular belief, starting a refill perfume business doesn’t always require a large investment. With an estimated capital in the tens of millions of rupiah, you can start your refill perfume business.

Initial Inventory Costs

Here’s a breakdown of the initial inventory costs:

• Perfume Syringes (10 pcs): Rp 25,000
• Permanent Perfume Syringes (2 pcs): Rp 20,000
• Measuring Cups (10, 25, 50, 100 ml): Rp 75,000
• Display Cabinets (3 cabinets for a 3×4 m shop): Rp 4,500,000
• Cashier Table: Rp 500,000
• Wall Display Racks (1×2 m, 4 pcs): Rp 6,000,000
• Banners, Signs, Lights, Fit-Out: Rp 1,000,000

The estimated total cost for these items is Rp 12,120,000.

Initial Raw Material Costs

For the initial raw materials, you can start with approximately 150 bottles of perfume, each containing 100 ml of perfume oil. Here’s a list of the necessary materials and their estimated costs:

• Perfume Oil (150 pcs, 100 ml each): ± Rp 13,000,000
• Aluminum Bottles (150 pcs): Rp 1,500,000
• Prima Absolute Solvent / Ethanol (2 liters): Rp 110,000
• Absolute Cleaner (1 liter): Rp 20,000
• DPG / Solvent (1 liter): Rp 57,000
• Distilled Water (5 liters): Rp 32,500
• Plastic Spray Bottles (20 & 40 ml, 4 dozen): Rp 120,000
• Roll-On Bottles (6 & 10 ml, 10 dozen): Rp 150,000
• Glass Spray Bottles (15 ml, 2 dozen): Rp 110,000
• Glass Spray Bottles (20 ml, 2 dozen): Rp 120,000
• Glass Spray Bottles (30 ml, 2 dozen): Rp 120,000
• Glass Spray Bottles (35 ml, 2 dozen): Rp 120,000
• Glass Spray Bottles (50 ml, 2 dozen): Rp 144,000
• Glass Spray Bottles (60 ml, 2 dozen): Rp 144,000
• Glass Spray Bottles (100 ml, 1 dozen): Rp 96,000
• Waterproof Stickers (150 pcs): Rp 600,000

These materials bring the estimated raw material costs to ± Rp 16,313,500.

In total, your estimated initial investment for inventory and raw materials would be around Rp 28,433,500. This amount can set you up to start a promising refill perfume business with a wide range of products.

Thinking About Starting a Perfume Oil Business? Here’s How!

Perfume has become a staple for many people. A pleasant fragrance can boost confidence, making perfume a daily necessity for some. Both nationally and globally, people view perfume as an essential part of life.

According to a study by Kantar and Stanpa on Spanish citizens, 94.6% of people use perfume regularly, 61% consider perfume very important, and 54.7% use it daily. This research highlights the significance of perfume in people's lives. Additionally, Grand View Research reported that the global perfume market was valued at USD 50.85 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 5.9% from 2023 to 2030.

However, nowadays, you don’t need to shop at stores selling branded perfumes to get a great fragrance. Instead, you can simply buy the perfume oils.

If you've visited a perfume shop in a mall or a roadside store selling unbranded perfumes in glass bottles, chances are it's a perfume oil business. Perfume oil is the pure essence or extract of various fragrances. It remains in its original form, without any added ingredients, including alcohol. For example, if you want a fruity scent, you would distill the extract from fruits.

Starting a perfume oil business can also be profitable because it’s affordable, the products are unbranded, the customers are typically from the middle to lower income brackets, the scents are diverse, and the buying frequency is high, although the profit margins are smaller.

Here are some tips to help you start a perfume oil business:

Prepare Business Capital

The first step is to prepare the capital for your perfume oil business. As mentioned, the initial investment isn’t too large, and you can benefit from a wide range of suppliers.

Research and Register as a Supplier of Perfume Oils

Find potential suppliers for your perfume oils. Make a list of potential suppliers and establish relationships with multiple vendors.

Prepare the Location

Set up a place or store to sell your perfume oils. You can start with a 4x4 meter space and design it as attractively as possible.

Promotion

To attract customers, promote your perfume oil business, possibly by offering discounts on the oils.

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Running a business in the livestock sector is promising and a smart choice. This industry offers significant opportunities and requires relatively affordable capital, making it highly appealing. Additionally, the use of a corn husking machine simplifies the production process from raw corn materials.

The Central Statistics Agency (BPS) reports that chicken meat and egg consumption in Indonesia continues to rise each year. This indicates a growing demand for chicken as a source of animal protein. One of the primary raw materials for the chicken feed business is corn, which can also be diversified into corn rice, corn flour, corn starch, and other products. To produce quality chicken feed, several factors must be considered, including nutritional value, nutrient content, moisture content, and texture.

To start and develop a chicken feed business, initial capital is needed to purchase equipment, raw materials, and business premises. Operational capital covers production, distribution, and promotion costs, while additional capital is required for machine maintenance, product development, and other expenses.

Estimated costs for each component are as follows:

• Equipment: IDR 10 million – IDR 20 million
• Raw materials: IDR 5 million – IDR 10 million
• Business premises: IDR 5 million – IDR 15 million

Operational capital:

• Production costs: IDR 3 million – IDR 5 million per month
• Distribution costs: IDR 2 million – IDR 4 million per month
• Promotion costs: IDR 1 million – IDR 3 million per month

Additional capital:

• Machine maintenance: IDR 500 thousand – IDR 1 million per month
• Product development: IDR 1 million – IDR 2 million per month

Based on these estimates, if you plan to start a business with a production capacity of 1 ton of feed per month, the total capital required would be approximately IDR 20 million for equipment, IDR 6 million for operational capital per month, and IDR 1.5 million for additional capital per month. Thus, the total initial capital needed would be around IDR 27.5 million.

The discourse on reintroducing plastic taxes has resurfaced and is predicted to be implemented in 2024. This simultaneously opens the potential for increased prices of fast-moving consumer goods (FMCG) products, some of which use plastic packaging.

FMCG refers to consumer products that sell quickly and are frequently purchased by consumers over a short period of time, such as personal care items (soap, shampoo, toothpaste), food and beverages (nuggets, instant noodles, bottled water), and household cleaning products (detergent, floor cleaner, dish soap).

To address this, various innovations are being pursued, including the use of more environmentally friendly FMCG packaging. According to the Ellen MacArthur Foundation report, by 2050, there could be more plastic than fish in the oceans.

As a result, the FMCG industry is moving quickly to take significant steps to ensure plastic does not pollute the earth. One approach involves conversion actors, manufacturers, and retailers actively seeking ways to create environmentally friendly products and increasingly sustainable supply chains.

By doing so, the FMCG industry helps to realize a circular economy: an economic system aimed at eliminating waste and encouraging the sustainable use of resources.

Through a commitment to developing increasingly sustainable packaging solutions for consumer products and connecting circular supply chains, FMCG companies of all sizes can meet demand while keeping harmful materials away from the environment.