Building Value through Innovation
At one time, packages were simple in their role; they provided protection and were used to display logos of brands. Things are changing. With the use of sensors, printed electronics, scannable codes, and freshness indicators, boxes, bottles, and pouches have become sources of information. The industry realized this and put Smart Packaging Innovation at the core of its strategies.
There are two categories of intelligent packaging in use. In active packaging systems, there is an alteration of the internal environment of the package, including the absorption of oxygen and release of antimicrobial agents that enhance the shelf life of the product. There are also intelligent packaging systems, which include time-temperature indicators, gas sensors, and smart labels communicating with mobile devices.
Why Brands Are Investing
Three aspects affect the decision regarding investments into innovative packaging: firstly, it is food waste, which is quite expensive for manufacturers and retailers each year; secondly, better control of freshness will help customers and retailers to avoid waste. Counterfeiting is the second aspect, which allows consumers to check the legitimacy of products using digital identities. The consumer demand is the third aspect because consumers want to know the origin of goods, ingredients, and how they should recycle them.
Businessmen who are ready to invest in innovations of smart packaging can get in touch directly with consumers via smart packaging: after scanning a barcode on a bottle or packaging, one will establish communication without any retail programs or ads. Marketing departments use first party data, such as timing and place of scanning, in order to improve campaigns and product development.
A Real-World Test: Johnnie Walker
Three factors influence the investment: food waste is first, as it is extremely costly for manufacturers and retailers annually; improved freshness management assists both consumers and retailers in avoiding waste. Counterfeit is the second factor, as special digital identities allow consumers to instantly check the authenticity of the goods. Consumer demands are the third factor, as buyers need to know about origins, composition, and recycling instructions of their purchases.
Entrepreneurs who wish to introduce smart packaging technology can use it as a means of communicating with the customers through it: simply by scanning the barcode on the packaging of the bottle, a direct communication channel is opened without being reliant on any retail loyalty programs or even any advertisements. The marketing team collects first-hand information about when and where the code was scanned.
The Sustainability Question
Sustainability presents challenges. Electronic sensors pose a problem when it comes to the recycling process, while legislation is becoming stricter in terms of packaging. Thus, designers should be ready for an uneasy choice – each new sensor should pay off in environmental terms. Easy methods, including printed coding with paper and plastic recyclable materials, provide most benefits in return for minimum amount of additional garbage. Ignoring this ratio means attracting consumers’ disapproval and facing legal consequences.
There are more issues related to expenses and privacy. Even though printed sensors cost more than a regular label, they are used only in case of valuable or hazardous products, including pharmaceuticals and fresh produce. Privacy is also important: any brand using scanning should disclose collected information, ask for permission where needed, and guarantee safety of stored data. Those who use smart packaging innovation just for marketing reasons won’t find it easy.
What Comes Next
The following trends will characterize the future phase. Printed electronics will become cheaper due to economies of scale. Increased traceability requirements will compel brands to add verifiable information to their products. Finally, artificial intelligence will help firms assess scanning trends and demand. Overall, this combination of factors will take Smart Packaging Innovation from a trial to standard supply chain operations.
Business people deciding whether to invest in such technology need to identify the problem first. An example of a firm that loses money because of counterfeit goods will need authentication technology. In addition, if a grocer discards a lot of food, it needs freshness tracking technology. A pharmaceutical company that needs to guarantee the cold chain will require temperature tracking technology. Each of the cases requires different technology and deserves a pilot with clear objectives.
The Bottom Line
Packaging aisles are becoming data layers. The companies that will be able to leverage Smart Packaging Innovation in a systematic manner will eliminate waste, battle fraud, and understand consumer demands through the packaging they are already using. The others that will chase innovation for the sake of it will only add costs and unnecessary complexity. The successful ones will focus on the right problem, respect privacy, and design for recyclability right from the start.
This time frame will put the claim to the test. The retailers will want more data, consumers will ask tougher questions, and governments will tighten regulations. Smart packaging innovation will not substitute quality products and marketing but will offer an additional incentive for those companies that see packaging as part of the overall product experience. The pioneers of today will set the standard for tomorrow.