What You Should Know About Smart Packaging

Thursday, August 25th, 2022

Active and intelligent packaging, or smart packaging, not only protects food and extends its shelf life. It can also provide information about the product or packaging. We explore the functions and potential of this promising technology with Andrew Manly, Communications Director at Active & Intelligent Packaging Industry Association (AIPIA).

How have the trends evolved for active and intelligent packaging since a few years back, when the pandemic started?

The pandemic brought several issues into sharp focus for smart packaging providers and users. The major issues were food safety and security as more people chose “at home” dining options so the logistics of food became very important. Tracking food through the supply chain became, and still is, very important. Not only does smart packaging provide sensor technology to ensure the food is delivered in a timely period, it also ensures perishables — whether meat proteins, produce or fish — are kept in the best possible conditions. Usually, this means storing them at the right temperature.

In some parts of the world, home delivery of fresh food saw a big jump and brought a new dimension to the “e-commerce” space. While home delivery of prepared foods such as pizzas and other takeaways also increased dramatically, it was the delivery of food for the larder which presented more of a challenge.

Smart Packaging providers have been saying for years that “sell by”, “use by” and “best before” date labels lead to tonnes of food being thrown away every year. The condition monitors now available offer a much more accurate picture of whether the food inside is still safe to eat. This is gradually being realised, if not by retailers then certainly by food safety authorities and those pushing the sustainability agenda. Indeed, a recent study by Cornell University in the USA found that consumers are more willing to use QR codes to find out if a carton of milk is still drinkable, leading to substantially lesser agricultural and food waste.

While consumers could go “in-store” shopping less often, they are much more interested in the provenance of their food and its route to their larder or refrigerator. Provenance refers to the validated history of origin of a specific product, such as a lot, a batch, or a serial number. So things like blockchain (simply put, a shared database) have grown steadily to ensure traceability for all kinds of food products. It is particularly popular with retailers as it puts the responsibility of proof firmly on the suppliers and logistics companies. So, we expect to see the use of blockchain increasing for both provenance and authentication. Some foods, such as Sicilian Oranges or Italian Parmesan cheese, have a protected status and therefore carry a premium price. Such products are widely counterfeited, so proof of the supply chain journey of the product is very important.

The food sector was not the only industry that benefitted from the huge increase in e-commerce traffic. The apparel industry, in particular, has benefitted greatly from their ability to track and control inventory both in the warehouse and in the store. This means they can be much more agile in finding the right product quickly. To push this back to a food context, this kind of stock control is easily beneficial for non-perishable foods. Indeed, Walmart now mandates that its suppliers have to use RFID tags across a wide range of its product line. This, we hope, is the start of another exciting trend.

What would you advise food and beverage manufacturers who are afraid of incurring extra costs (time, money, labour, etc) to implement active and intelligent packaging?

Many brands still see this technology as a cost instead of something that adds value. Yet, there are plenty of cases out there that prove the value of active and intelligent packaging. This can be as straightforward as better inventory management, campaigns that increase consumer engagement and therefore sales for food and beverages, as well as offering clear routes to food safety.

Additionally, the cost of smart packaging components has reduced dramatically. An RFID tag, even a simple one, would have cost USD 25 cents or more a decade ago. Today, even the sophisticated UHF versions can be as little as USD 3 cents and it could soon be just 1 cent. Likewise, advances in digital printing technology means that QR codes can contain huge amounts of information and interactive features. As most packs contain a code these days, you are not really adding anything to the landscape. Even if that is still an issue, there are now invisible codes which can be included in existing artwork.

One problem was clearly identified in the Accenture/AIPIA report published last month: Cross-departmental communication in big companies, particularly consumer packaged goods (CPG), is poor and sometimes non-existent. There are also many tiers of management to get through to anything approved. So if one department head sees this new tech as a cost and the other as a value, it tends to get stuck in the decision-making system.

Smart packaging can produce data that can unlock this system of “silos” as the information captured, either in the supply chain or at the transactional stage with the consumer, can provide excellent insights into the workings of both. Sharing data between production, design, logistics and marketing would seem to be a logical thing to do. But even today, packaging designers regularly come up with a new package format for either an NPD (new product development) project or as a rebrand, which is impossible to produce at scale, or is too expensive to be practical.

We live in a brave new digital world where such communication exchanges are much easier to perform. The smart packaging sector is well aware that collecting valuable data is one thing, what you do with it is quite another. But these terms, Internet of Things (IoT), Internet of Packaging, Digital Twins, Blockchain and Big Data are not just meaningless gobbledegook. They can offer routes to understanding almost every aspect of a product’s life.

For the brand owners, smart packaging offers a clear and unequivocal path to building a closer relationship with its customers. They really do want to know if what they are buying is authentic, what ingredients have been used, if it’s still safe to consume, or what benefits can be derived from being loyal to a particular brand.

On many levels, such as food safety, medical compliance, tracking & tracing, or even if one was simply entertained and inspired by a product, smart packaging adds real value. Even information on how to recycle the pack can be included.

What is the forecast for the future of smart packaging in the next one to two years? For example, the role that smart packaging will play in food and beverage packaging, will it become an expected norm in order to meet food safety standards?

A recent comment from an executive of a major brand owner in the snack food sector was very encouraging. He said he expects, in less than a decade, that products on supermarket shelves will be “screaming for attention” via our smartphones from intelligent features on the pack.

If we take that as a good indicator, then the next five years of growth for smart packaging providers is very promising. Both legislative “push” and consumer “pull” would show strong and persuasive reasons why these technologies will become more ubiquitous. As most of these components are not in direct contact with food, or are produced using the same materials or inks as before (think QR codes and antimicrobial additives to plastics masterbatches) then the problem of, or compliance with, food safety standards is not really relevant.

The packaging sector, particularly for food and beverages, has become obsessed with sustainability and recycling issues. While these are very important and necessary, the consequence is that much of the other necessary innovation that deserve attention has slipped down the agenda and budget allocation list, and smart packaging is one of them.

Smart packaging can actually add a lot to the sustainability equation. Saving food from waste is just as, and probably more, important than tackling plastics waste. So helping to extend shelf life, monitor condition or making supply chains more efficient and transparent, are all critical. Take for example connected packaging, which refers to packaging that includes features for consumers to access information about the product. The direct-to-consumer messages from connected packaging can deliver information about recycling, so this makes the case for incorporating this technology even stronger.

In Europe today, there are several pilots using digital watermarks to help sort the different plastics to increase the volumes collected. As ever, the technology seems to be developing ahead of the ability to collect and produce enough of these materials to make it a viable economic proposition.

Finally, we must never forget that forging relationships with the consumer is more important than ever. Connected packaging, accessed via a smartphone, can not only provide both valuable information about the product and its ingredients, but also promote the brand story and entertain consumers, particularly the Generation Z, who use their smartphones for just about everything.

The value of smart packaging as a marketing tool has been widely recognised by brands both big and small. Indeed, the smaller, more agile brands have been quick to build up followings on social media via connected packaging. As a result, they have taken some market share off the bigger brand owners — one of the reasons the latter is showing such interest in wider adoption of the technologies and looking at scalability rather than campaign-led implementation.

There are still barriers to wider adoption for smart packaging. But since certain tipping points have been reached, such as Walmart’s implementation of RFID tags, the outlook is very positive. After all, why would food producers and retailers not want to acquire technology that cuts food waste, aids recycling, and connects them directly with consumer requirements? It also offers authentication, traceability and provenance with just one tap or scan. It opens up a route to establishing a much stronger link between brand and consumer. This seems to be the smart way to go.

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