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    Features

    The Opportunities for Smart Packaging

    Flexible and printed electronics are an ideal fit for smart packaging and labels.

    The Opportunities for Smart Packaging
    Kalevala Gin uses an NFC-enabled tag. (Photo courtesy of Northern Lights Spirits Ltd.)
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    David Savastano, Editor03.23.17
    Smart packaging is a rapidly growing market, and flexible and printed electronics are helping to drive that growth. Whether it is to draw the attention of consumers or provide authentication or additional information on the product, smart packaging brings many benefits.

    It is also a fast growing market. In its report, “Smart Packaging Market Analysis By Product (Active Packaging, Intelligent Packaging ) By Application (Food & Beverage, Healthcare, Personal Care, Automotive) And Segment Forecasts To 2024,” Grand View Research reports that the worldwide smart packaging revenue was $10.8 billion in 2015, and estimates that it may reach $26.7 billion by 2024. Grand View Research sees NFC as the fastest growing segment within intelligent packaging, anticipating a CAGR of more than 12% from 2016 to 2024.

    What is Smart Packaging?

    Packaging is designed for a variety of functions, from catching the consumer’s eye to protecting the goods inside. James Lee, director, technology and innovation at Jones Packaging, said that knowing the role of packaging opens the doors to the possibilities of intelligent packaging.

    “Packaging protects, it preserves and, in a lot of cases, it provides information,” Lee noted. “We are trying to get more out of what currently exists. By adding more technologies, we can add functionality to the packaging itself. We can add more features and capabilities.”

    IDTechEx CEO Raghu Das noted several driving forces behind smart packaging, including the desire to differentiate products.

    “Packaging has to do more to stand out to help sell the product versus the other items on the shelf,” said Das. “Brands need to differentiate against supermarkets’ own label products, which often are designed to look very similar to the original brand but are cheaper. Brands also want to provide more value and a better experience to the users of their products, which the competition cannot so easily copy. Consumers also want more information, like where the product came from, freshness, ingredients etc.”

    Roy Bjorlin, global commercial and strategic initiatives director, Electronics Materials, Sun Chemical, sees smart packaging as a way for brand owners and consumers to communicate, whether it is product information, coupons, games or other programs.

    “We are now more connected digitally across the globe than we have ever been before through social media, mobile devices, wearables and more,” said Bjorlin. “It is therefore not surprising to see a growing desire from our brand owner and converter partners to utilize smart packaging to connect with mobile devices.

    “Smart packaging can change the way retailers, brand owners and consumers interact with products by communicating, engaging customers, managing inventory systems and much more,” added Bjorlin. “Much of our focus in R&D is geared towards the development of advanced materials that can be processed at high speeds in the non-traditional converter space that supports consumer brands, This means there is a greater demand to develop materials that provide flexibility and can be processed at high speeds using non-traditional printing methods, such as flexographic printing.”

    Klaus Hecker, OE-A executive director, said that brand owners and packaging manufacturers are looking for new functionalities to distinguish, including recognition at the point of sales through packages that light up, customer interaction and brand protection through the use of NFC labels.

    “The benefits of printed electronics for smart packages is its properties such as thin, lightweight, flexible, robust and seamless integration,” Hecker said. “There is a huge need for advertising, brand protection and anti-counterfeit applications, and PE can help to serve these. Flexible batteries, sensors, logic and displays are the building blocks for making a package smart.”

    PAC, Packaging Consortium is a not-for-profit corporation that includes more than 2,100 members throughout the packaging value chain. Together with the Canadian Printable Electronics Industry Association (CPEIA), PAC formed intelliPACK to educate its members and develop smart packaging solutions. James Downham, president and CEO of PAC, said that the technology is the driving force behind smart packaging, as marketers see potential of the applications to sell more products. Security is a reason brand owners are looking into the technology.

    “There is the concept of track and trace,” Downham noted. “Security is such an important issue, as everyone wants to know where everything comes from, all the way back from the source. Fraudulent products are a similar concern.”

    Jason Marsh, NextFlex’s director of technology, noted that smart packaging is a huge piece of flexible hybrid electronics (FHE). He added that finding areas where FHE technology can save money is a good place to start.

    “One example is food waste,” Marsh reported. “When we look at any new technology, we look at where the dollars are going to come from. If you see a potential billion-dollar industry, those dollars have to come from somewhere.

    “In this specific case, you have perishable commodities,” Marsh continued. “The data we have seen from the FAO (Food and Agriculture Organization of the United Nations) shows that there are huge waste percentages globally: 20% of dairy is lost to perishing, 45% of fruit and vegetables and tubers, 35% of fish and seafood, and 20% of meat. Using meat as an example, 263 million tons of meat are produced annually around the globe, and 20% of that boils down to something on the order of 75 million cows. If you look at what a cow costs, it comes out to a figure like $55 billion in annual waste just for the meat category. There are plenty of dollars out there to be redeployed to reduce waste.”

    “The driving force is for the packaging to play a more active role both in the purchasing decision and the use of the product itself, rather than just being ‘packaging’ to get it from the store to the home,” said Scott White, CEO of PragmatIC.

    Atlantic Packaging is a privately held Canadian company centered in Toronto, with affiliated companies across North America.

    Jeffrey Moore, general sales manager for Atlantic Packaging’s Retail Packaging & Displays Division, sees how smart packaging can provide benefits to brand owners, retailers and consumers alike.

    “The advantage of smart packaging is that it can get the customer engaged with the product through a retail display or the package itself, and reinforce the purchasing decision at the point of retail,” Moore observed.

    Consumers have changed the way they shop, and Lee sees intelligent packaging as a way of keeping customers engaged.

    “When it comes to intelligent packaging, it has more to do with the idea of how retail trends have changed, how shoppers have changed their behavior and how they utilize digital technology in the aisle,” Lee said.

    In its report, “Technology Device Ownership: 2015,” Pew Research reported that 68% of adult Americans have smartphones, up from 35% in 2011. Meanwhile, The Marketing Scope, a research firm, surveyed 1,500 American shoppers. Of the respondents, 83% reported they used their smartphone at brick-and-mortar stores. On the group, 42% used their phone to compare prices, and 31% check email promotions while in the store.

    Lee noted that if a brand owner can get the package to interact with a smartphone, they can potentially get a higher conversion rate of sales. He offered a use case a colleague related to him that shows the need for retailers to utilize technology.

    “If you walk into a big-box consumer electronics retailer, shoppers tend to pull out their smartphone to get a review,” Lee said.

    “The problem that occurs is that they might get reviews that are hosted by a leading e-commerce site, and the shopper will see that the model that they are looking at has a price that is a few bucks cheaper online. Right from the aisle, they might order from the e-commerce site. If we can create the connectivity where they can use NFC technology to learn more about the product, the retailer could curate the review data so that the shopper doesn’t see competitors’ prices.”

    Packaging for pharmaceuticals and medicines require a lot of information, which limits the amount of room for marketing. Lee sees an opportunity for intelligent packaging here.

    “In pharmaceuticals and healthcare packaging, we are facing regulatory concerns, and consumers look at the packaging box to see the regulatory facts,” Lee observed. “This leaves less room for the brand owner to deliver their marketing message. An intelligent package that is connected to your smartphone could pop open that drug fact table and let the brand have more space for marketing.

    “Packaging does a lot of the selling,” Lee added. “In that way, you can expand the physical real estate of the package.”

    There are examples of intelligent packaging being used for light-up style packaging, to catch the consumer’s attention.

    “You have to stand out on the shelf, and if you can draw the eye of the consumer and give them a reason to hold that package, you can convert that into a sale,” Lee pointed out.

    Protecting medications is another benefit of intelligent packaging.

    “There are a lot of great new medications available,” Lee said. “For example, there is a drug that treats rheumatoid arthritis, but it needs to be kept cold. If that drug leaves the cold chain for more than five minutes, that drug becomes inactive. By providing a smart tag on that package, the consumer can see if the drug ever left the cold chain and has become inactive.”

    Smart Packaging in the Market

    Smart packaging has already found a space in the market. Das said there are a number of examples of smart packaging that are already in the hands of end users.

    “There are many, including Duracell battery testers – the highest volume smart packaging printed electronics device – light up labels on bottles and bottle packaging e.g. Bombay Sapphire, light up packaging in multi-carton cigarette boxes in Japan, and RFID on whisky bottles in Korea to show which bottles are genuine,” Das said.

    “AB-Inbev debuted an illuminated smart label on their Oculto brand, supplied by Inland Packaging and based on PragmatIC’s technology,” White said. “Also there are many high volume roll-outs of smart packaging based on conventional/hybrid electronics, in particular RFID and NFC from companies such as Avery Dennison and Smartrac.”

    At LOPEC, the OE-A will release 10,000 copies of its new brochure with a NFC label integrated in the cover page that connects via smart phone to the Internet. “This is a clear example of printed electronics already being produced en masse,” Hecker said.

    “The demonstrator illustrates the versatility that organic and printed electronics can offer in terms of scalability, miniaturization, adaptability, manufacturability, integration, complexity and high technical yield. Tapping the integrated NFC tag with your smart device automatically takes you to the OE-A website.”

    “Some current clients using our NFC solutions that have products in market include Barbadillo, the Spanish winery; Northern Lights Spirits, a company that integrates our SpeedTap tags in bottles of its Kalevala Gin; Il Cavallino, a Tuscan olive oil brand, and Sarine Technologies, a solutions company in the diamond and precious gem industry,” said Bill Cummings, Thin Film Electronics’ SVP of corporate communications.

    “Interstate Battery is working with Seeonics on a smart shelving project that has been implemented in the retail environment where an auto-replenishment indicator will wirelessly connect to let you know that inventory needs to be re-stocked,” Marsh noted.

    “Boeing came up with a mechanism that measures the temperature history of adhesives and sealants, which can have implications in manufacturing logistics and productivity.”

    Moritz Wüstenberg, managing director of Northern Lights Spirits Ltd., discussed the opportunities that using NFC offers its Kalevala Gin brand to communicate with their customers.

    “By being able to individualize the content, our customers will have access when scanning our ‘smart’ bottles (tags), and we can tailor this according to orders and places of purchase,” Wüstenberg said. “We are looking into offering as much individual content as possible. At the moment it is still early days and we will continue to work on this. I think the technology behind this is great, so I am looking forward to see what the future brings.”

    Interest in brand authentication drove iOlive’s Pietro Barachini, founder of iOlive and a professional olive oil taster, to use NFC technology.

    “Initially, I owned a small nursery plant of olive trees,” Barachini noted. “Today, we produce 250,000 certified plants. All of our olive trees are produced from mother plants in the nursery. Italy’s olive oil industry has had many fraud scandals, including many top brands passing off inferior oil as extra virgin. The damage caused by the deceit has been significant, not only to the industry and brands, but to consumer trust. Using NFC technology, in conjunction with the iOlive app, has helped to authenticate the Tuscany region’s legitimately produced olive oil.”

    Outlook for Smart Packaging

    Industry leaders see excellent opportunities for smart packaging.

    “We see many trials of many different types of products abed on printed electronics, starting most usually with high value products which can afford higher priced solutions,” Das said. “As the cost comes down, the technology will proliferate to lower priced items.”

    “At Sun Chemical, we believe that the drive towards consumers at the item level, particularly when it comes to smart packaging and smart labels , will become increasingly evident over the coming years,” Bjorlin said

    “Over the next decade, the OE-A roadmap expects fully printed NFC and RFID labels, ambient intelligence, complex fully printed and integrated packages including power source and storage, display, logic and sensors,” Hecker said. “It is expected that smart packages and smart objects are a key element of the Internet of Things and Industry 4.0. We expect that flexible and printed electronics are an important solution provider for this.”

    Lee believes that intelligent packaging will ultimately be everywhere. “I do believe as these technology enablers become more ubiquitous, people will start interacting with these packages,” Lee noted. “In a lot of countries around the world, NFC communication is becoming part of their psyche.

    “We can see where intelligent packaging will grow,” added Lee. “You can print conductive traces so you can maybe print a sensor. We have all different use cases, including brand protection, marketing and dialogue, and connecting to social media. The possibilities for flexible and printed electronics are quite endless. It depends on how creative you want to be.”
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