The Future of Active and Intelligent Packaging to 2023
Analysis within its report The Future of Active and Intelligent Packaging to 2023 shows that the active packaging market is the larger market – valued at $4.62 billion in 2018. This includes a range of components used to enhance the preservation of goods within the packaging – such as, gas scavengers and emitters, moisture scavengers/emitters, microwave susceptors, antibacterial, antioxidants, self-venting films, flavour/odour absorbers and temperature control components.
Moderate growth is forecast for this segment through to 2023 at an average rate of 4.0%, as packaged food penetrates underdeveloped consumer markets in areas like Asia; but remains more stable in more developed economies.
In contrast the intelligent packaging component market will pass $1 billion in value for the first time in 2018. This covers a raft of components – including printed coding and markings, chemical sensor/output devices, electronic environmental sensors, logic circuitry, and antennas – designed for the communicate dynamic communication of information within the supply chain, or, increasingly, direct to the consumer.
As the segment where technology has not penetrated as far, and given that there are multiple new solutions coming to market the global intelligent packaging market’s forecast growth is much higher, over 12.5% year-on-year for 2018-2023.
The evolving nature of active and intelligent packaging can present challenges and market opportunities for the print industry. This is especially true for intelligent packaging where printed codes and marks already represent 60% of overall value globally.
Smithers analysis identifies the following four key drivers and opportunities for print businesses as the intelligent packaging segment expands.
Concern over counterfeit drugs and medical devices has prompted the development of new laws on both sides of the Atlantic. The US Drug Supply Chain Security Act, and the EU’s Falsified Medicines Directive 2011/62/EU mandate that individual for such products packs must in future carry 2D data matrix codes with standardised information, and to allow them to be tracked individually through supply chains.
This is already create a boom in demand for digital (inkjet and toner) print systems that can quickly impart the unique identifiers to labels or folding carton packs in existing converting lines. With estimates that 10% of drugs in supply chains worldwide are counterfeit and the continuing success of global e-commerce trade means this is increasingly an international problem. This makes it is likely that such mandates will expand at both national and supranational level across 2018-2023; meaning expansion of printed coding for medical and pharma will by more than double that for any other application examined in the Smithers study.
It not only regulators who want more information about products, a new generation of socially aware, health-conscious consumers are keen to have more information on the goods they buy, especially food.
In the US this has led to the creation the SmartLabel transparency initiative, set up by the Grocery Manufacturers Association and the Food Marketing Institute. The platform provides a medium to deliver information on factors, including ingredients, place of origin, certifications. This can be done digitally with a level of detail not possible on a physically printed label; with a QR code the most commonly chosen format
As of March 2017, more than 5,600 products of 205 brands from 26 companies were using SmartLabel. These include major food and consumer products manufacturers such as Unilever, Mondelez, Hershey, Coca-Cola, General Mills, L’Oréal and Land O’Lakes.
Once a company has the processes established for these brands they are rapidly expanding across the portfolio. It may take six months to work out the processes for the initial one or two brands, which is then followed by rapid expansion across other brands.
Recognising that artwork changes are expensive, the organisations recommend that brands get started by building the landing pages and leveraging consumer accessibility via search, then follow up with QR code inclusion linked to some other packaging artwork change. In the future, for food and beverage products sold in the US that will be using SmartLabel’s digital disclosure to comply with the federal genetically modified organism (GMO) disclosure law, a “digital link” will be required.
Smartphones scanning QR codes are now used for product verification with an overt or covert QR code linking to a secure brand or third party database. New systems for problem sectors are reaching the market with the markings combined with different security elements, like the BevSeal platform from Tesa Scribos targeting the wine and premium spirits area.
As consumers are empowered to identify counterfeit products at point of sale, pressure is applied backwards through the distribution chain to ensure counterfeit products do not enter the supply chain in the first place. Companies are no longer alone in pushing to solve the problem with expensive inspection and detection resources, as they can rely on the pull from a global enforcement team of concerned smartphone-equipped customers.
Once this connection is made brands can also use the information for follow-on marketing opportunities, forging a closer connection to the customer, with surveys and promotional coupons.
For all their current popularity QR codes do pose some problems. The level of data that can be encoded is limited, their blocky monochrome format can disfigure carefully designed brand graphics, and they can prove hard and time-consuming to read. The fastest developing alternative is to create an electronic link using a low intensity radio signal. The existing RFID dedicated spectrum has recently been expanded by the Near Field Communication (NFC) protocol.
The pairing of smartphones and other types of mobile engagement tools to primary packaging and to point-of-sale displays is a natural evolution of branding, retailing and consumer engagement. The opportunity for print firms comes in being able to print the electronics themselves – both the antennas and increasingly logic circuitry and sensor equipment.
Printed electronics is one of the core products of the intelligent packaging revolution and has the potential to be the breakthrough technology for reducing costs and expanding functionality of intelligent packaging solutions. This potential is now seeing alliances between specialist technology providers and leading companies in the packaging and print sectors.
This includes Xerox which has allied with Finland-based Thinfilm Electronics to create a commercial print line for printing five billion NFC-enabled OpenSense and NFC SpeedTap tags per year – which the company says will generate $680 million in annual revenue.
In the UK, flexible electronics developer PragmatIC, secured £18 million ($26 million) of funding in November 2016, including a strategic investment from Avery Dennison. This has helped pay for the installation of its first FlexLogIC system capable of producing billions of flexible integrated circuits. The system will be located alongside the company’s existing pilot production in County Durham. Commissioned in 2017, it is forecast to be ready for volume production in early 2018.
The Future of Active and Intelligent Packaging to 2023 offers in-depth profiling of the components, applications and systems for active and intelligent packaging across 2013-2023. Download the brochure.