A 2020 Mordor Intelligence market report published estimates growth of the global smart packaging sector at an annual average rate of 4.5%, which would cause it to reach a whopping international value of USD 48.72 billion by 2026.
And, that is because technology has been able to elevate basic packaging as we understand it today to a vital tool for smarter manufacturing, increased sustainability, boosted customer trust, streamlined supply chain, and data-driven results.
With so much potential still undiscovered, intelligent packaging is still at its initial stages but set to take the manufacturing industry by storm over the next few years. Learn all you need to know about what smart packaging is and the competitive edge it can give to your company in this guide offered by Authena.
Smart packaging is not a single type of packaging, but rather a technology-enhanced category of packaging solutions that aim to provide a far more active service than just passively containing consumer goods.
The world of smart packaging has been gaining increased attention over the years also thanks to the undiscovered potential it has to increase consumer and business utility, tracking and traceability, quality control, waste reduction, and authentication.
This is possible especially thanks to emerging technologies such as product authentication software, NFC labels, and blockchain-based solutions.
The “extras” added to packaging via emerging solutions can tell the consumer a lot about how the product they are buying was manufactured, circulated, and handled. Oppositely, the same technology can be used by the business to gather data about their target markets and consumers, so that they can create more personalized, engaging, and accessible experiences for their customers.
As we have seen above, smart packaging refers to a type of packaging enhanced by technology, and it is often a combination of active and intelligent packaging. Ultimately, smart packaging has two essential features:
Embedded sensor technology and smart labels allow smart packaging to deliver data regarding the product’s quality condition, authenticity, and storage. There are two types of smart packaging:
The core principle of smart packaging is that technological solutions implemented in the connected packaging can be scanned to obtain information about the product’s quality, freshness, manufacturing details, movements, and authenticity.
While this principle remains at the core of smart packaging in various industries – including food, pharmaceuticals, and cosmetic goods – the industry is in its early days and can be challenging to foresee the application of future technologies.
In the 2020 “Beyond COVID-19: The next normal for packaging design” report by McKinsey, a “Speedier digitalization of the value chain” is considered to be one of the megatrends that will characterize the packaging industry in the post-Covid-19 era. In this video you can learn more about the other trends that are shaping tomorrow’s packaging industry.
While this change is partly driven by the consumers’ needs for authenticity and trust, it is also fuelled by an increasingly more data-driven society. Here are just a few of the benefits of considering smart packaging for your company.
Smart packaging has been quickly adopted by a range of industries, including the cosmetic, pharmaceutical, and food-and-beverage sectors. And, it is in these industries that smart packaging can yield the greatest benefits. In fact, through technologies such as QR codes, RFID (Radio Frequency Identification), and NFC (Near-field communication) solutions, intelligent packaging can provide quick and affordable data about the product and its environmental conditions.
In particular, in the food industry – in which waste level is as high as 30% – smart packaging can yield the following benefits:
It is undeniable that the transport and logistics sectors have had to adapt quickly to survive the restrictions and changes that have happened since Covid-19 hit. However, during the months of lockdown, the volume of delivery and shipping orders has boomed, thus fuelling a substantial growth of the logistics sector.
Nonetheless, companies had to undergo a digitalization process to meet the skyrocketing demand and streamline internal operations. Thanks to QR codes, NFC tags, and RFID solutions, packages are today much easier to process and track throughout the supply chain.
Over 3.3% of the world’s trade is made of fake and counterfeit goods. The circulation of lower-price fake goods can take away a significant portion of your company’s profits and harm your brand’s reputation. In the worst-case scenario, counterfeit goods can also represent a hazard for the health and wellbeing of consumers, such as in the case of fake Covid-19 vaccines.
Through smart packaging solutions, businesses can ensure the authenticity of the products sold and consumers can be more in control of their buying choices.
Smart packaging solutions can be a real game-changer for the majority of companies, especially when trying to achieve data-driven results. The pandemic prompted a fast digitalization process across all industries, and most firms that implemented digital tools in their manufacturing process realized they could squeeze far more data from their products than they thought.
Thanks to this data, companies can better understand their audiences and how they engage with the product and your brand. When leveraging this kind of information, manufacturers can create products that are more relevant for their consumers and experiences that are far more engaging.
As we have seen above, there are endless benefits associated with introducing smart packaging into your firm. And, as the technology evolves, more and greater opportunities are bound to reveal themselves.
Nonetheless, as shown by a Deloitte report, no application of smart packaging has yet reached maturity. This means that this technology is still in its early stages and developing quickly, thus facing challenges related to legislation issues, cost and accessibility, and compatibility with today’s logistics sector. Here are some of the challenges that come with this product packaging.
As we have learned above, smart packaging comes in two forms: active packaging and intelligent packaging solutions. While intelligent packaging focuses on implementing technologies that facilitate the logistics, recognition, and tracking of the goods, the goal of active packaging is to enhance the performance of the good itself.
Active packaging is also an important tool in goods lifecycle management and waste reduction. Some challenges that come with active packaging are the limited research around antimicrobial packaging and the use of active compounds.
Another challenging area of smart packaging is the research into thin-film electronics, which are essential to embedding the necessary technology into smart packages. Smart chips, NCF labels, and RFID solutions still have a high unexplored potential to be exploited in a variety of sectors. So far, these technologies have been poorly adopted across the entire value chain, reaching the final customer.
The advent of smart packaging has fueled the digitization and digital transformation of the logistics industry and supply chain. Nonetheless, this process is still in its initial phases and may still be inaccessible for the great majority of firms – especially those that aren’t outsourcing, operating locally, or working with a small budget.
While emerging technologies have unlocked endless possibilities for a more streamlined and automated logistics industry, the sector has not yet evolved enough to support smart packaging technologies. This means that technologies such as RFID chips and NFC tags might not be compatible with the systems employed today by the supply chain.
Smart packaging technologies often require ad hoc, tailored software to visualize and organize the data collected. For example, when using QR codes as part of a labeling strategy, the user will be able to receive the product’s information via a dedicated interface.
This means that, when introducing smart packaging in your company, you will also have to integrate the right software to collect, understand, and utilize the information gathered by your connected packaging solution.
Another concern that comes with collecting and using product and customer data is the ability to do so in all security. Not all real-time monitoring and tracking systems protect the security and data privacy of consumers and your business.
In particular, intelligent packaging solutions can gather data such as behavior, location, preferences, and identity of your users, which is considered nonpublic information that needs to be protected against theft.
Some of the emerging solutions to these issues include cryptography systems and blockchain.
Smart packaging and the technologies associated with it are growing at a vertiginous rate. So, it is not difficult to find examples of firms that have begun to integrate smart solutions to tackle their business’s challenges.
But if you wish to get a glimpse of how Authena’s smart packaging solutions can transform your business, check out the three examples below.
Just under 50% of all smart packaging applications happen within the food and beverage sector – and the fast-moving consumer goods (FMCG) is the one driving innovation in the smart packaging niche.
Wine bottles are only one of the goods that can benefit from NFC encrypted tamper-proof blockchain and IoT (Internet of Things) solutions. Authena’ Smart Wine Bottle provides consumers with the peace of mind that comes from knowing every detail of the production, distribution, and handling process.
Thanks to this kind of solution, buyers can immediately identify the product and have all the necessary information about its authenticity at their fingertips. While QR codes represent a less-than-perfect attempt to restore customer trust, NFC systems are what provide the always-updated, secure, and detailed information today’s customers are seeking.
Authena’s technology has been successfully used to disrupt illegal markets and fight counterfeit – especially in those instances where these can be harmful to human health. In the field of pharmaceuticals, smart packaging can divert illegal drugs, stop fraudsters, resolve traceability issues, and improve transparency.
By implementing a blockchain encrypted product seal, Authena’s packaging for pharmaceutical products can be tagged, traced, and instantaneously authenticated.
New statistics show that counterfeited goods could make up to 10% of all personal care and cosmetic products in circulation. Aside from not offering the right value to the consumer, counterfeited goods can subtract a significant portion of a company’s sales and affect brand image. In the case of illegal and unregulated fragrances, skincare, and makeup products, these fake cosmetic goods can also be harmful.
Leveraging anti-peeling NFC tags and blockchain technology, Authena’s secure platform ensures that all cosmetic products are now trackable, tamper-proof, and easy to authenticate.
Only a few industries have changed as much as the logistics sector during the Covid-19 pandemic. During the months of lockdown and social distancing measures, firms reported a spike in online orders, shipping requests, and delivery services – also fuelled by the eCommerce sector’s overnight growth.
Throughout the pandemic, companies have used smart packaging and manufacturing technology to:
According to a McKinsey report, during the pandemic, the manufacturing industry has hit the tipping point, and the events that have happened over the past months might have changed it forever. Therefore, all companies wishing to thrive in future years should look at smart packaging as an essential competitive edge.
Today, over 42% of consumers report mistrusting brands, and up to 70% of buyers distrust advertising. Smart packaging is an important tool that brands can use to provide accountability, traceability, and transparency so that the consumer can have all the decisive information at their fingertips.
Indeed, studies show that consumer perceptions of goods can be improved when information such as production methods, links to the manufacturer’s website, certification labels, transport tracking, and origins of ingredients are provided.
For all companies in the food and beverage, pharmaceutical, and cosmetic sector, smart packaging represents an important competitive edge to remain current for consumers and match the increasing market demand.
However, each company is unique, and your smart packaging solution is unique to your project.
At Authena, we are proud to be leading the research and integration of NFC labels, IoT (Internet of Things) sensors, and blockchain solutions. Partnering with us means finding industry-leading insights and cutting-edge technologies to apply to your unique case. We also personalize our solutions to suit the product packaging designs. Get in touch today to discover a personalized solution for your firm.