September 1, 2006
By PAULINE TINGAS
Intelligent packaging technologies are quickly commercializing. But if you don’t “get smart” on how they can benefit your brand, you risk getting left behind.
In Steven Spielberg’s Minority Report, set in the year 2054, Tom Cruise walks into a Gap store and a virtual salesperson emerges to ask how his “selection of tank tops worked out”. As he passes a mall corridor, billboards call out his name. Even at home, his cereal box “comes to life” with cartoon characters dancing and singing when he touches the carton.
If you think these are simply visions of a future time, you are wrong. Consider that, in 2003, Germany’s Metro Group launched the Future Store to test new retail technologies. In this grocery concept store, there are smart shelves alerting the staff to replenish supplies; always-up-to-date electronic shelf labels; 3-D displays targeting different customer groups with various ads at different times of the day; and shopping carts with mini computers that scan items, display a running tally of purchases and then allow consumers to check out without removing product from their carts.
“We are moving to a world where your children will think your age was the Flintstones’,” says Peter Harrop, PhD and chairman of IDTechEx, a smart packaging research and consulting firm in the UK. Dr. Harrop says smart technologies are likely to revolutionize society and touch every industry, particularly the packaging sector.
In fact, according to a new report from NanoMarkets, a market research firm in Virginia, the global smart packaging market is projected to reach $14.1 billion by 2013.
No consensus on what “smart” is
But what actually constitutes smart packaging? Some experts make distinctions between technologies and label them as “smart”, “active” or “intelligent” to describe different functionalities. But, the truth is, no one really agrees.
“Smart packaging is like Lewis Carroll’s Alice in Wonderland. The word means what people want it to mean,” says Dr. Harrop. “The way [IDTechEx approaches] it is the chemical, biological, mechanical, electrical and electronic technologies that make a package interact in some way.”
Suppliers in these fields are already touting the commercial packaging applications of their diverse technologies. Society is dictating it.
For instance, according to Dr. Harrop, smart packaging can help detect and treat illness—something of great importance as the world skews “violently toward the elderly”.
The competitive retail climate and the rise of private labels are also leading CPGs to consider new technologies as a way to differentiate. Even lawmakers are inadvertently pushing smart packaging penetration: a new regulation coming out of the EU will require cosmetics to have a “period after opening” symbol on packaging to indicate when it’s time to replace the product.
“There’s an opportunity for smart packaging to really enhance [that function], put some brains into it and provide a consumer benefit as well,” says Reuben Isbitsky, Joint-CEO of Timestrips, a smart label company in the UK.
All of these drivers are creating a surge of interest in smart packaging and bringing developments forward at a rapid clip. That’s why, experts say, it is so important for brand marketers to start thinking now about incorporating such technologies within their own product development cycles, or risk getting left behind.
“It’s rather bizarre that brands think up a slightly new color of pink and consider that an innovation. That’s the thinking of the last century,” says Dr. Harrop. “A brand manager should be working far harder to be the first to use this and put their brand head and shoulders above the rest.”
RFID in its infancy
RFID is probably what first comes to mind when smart packaging comes up. After all, much has been said and written about the technology, and heavy hitters like Wal-Mart and Tesco are mandating manufacturers and other suppliers get on board with it to track inventory.
But even with powerhouse retailers pushing it, RFID has only come so far. Some says that, for now, there is no business case for manufacturers to implement the technology: tags run from seven cents to 20 cents depending on quantities used and their reliability is still somewhat in question.
Others like Katherine Albrecht, founder of CASPIAN, a consumer privacy group, have strong concerns that item-level RFID—the tagging of each individual package—has the potential to comprise consumer privacy and security (see sidebar, page 6).
Though, suppliers are still pressing forward and developing technologies to be at-the-ready when (and if) item-level tagging comes to play. O-I, the glass manufacturing company, is developing a program within its plastics division to embed RFID chips directly into pharmaceutical vials. The process, O-I says, makes the technology more tamper-proof than label and closure RFID systems and offers enhanced anti-counterfeiting protection. Finnish paper company M-real is working on printing RFID patterns directly onto packaging, with no chips required at all.
Healthcare an exception
However, the pharmaceutical industry seems to be a big exception. Perhaps because the consumer value of RFID can much more easily be determined in healthcare.
Earlier this year, Pfizer was among the first to implement RFID on a broad basis, using passive tags on cases and retail packages of Viagra, which is widely counterfeited, to enable wholesalers and pharmacies to authenticate the drug.
Pharmacies serving the Department of Veteran Affairs are also using RFID, but as part of a ScripTalk system that makes prescription labels “talk” when visually impaired patients scan them with a reader. The system reduces the chances of mix-ups by letting patients know which drug they are holding, how much to take and how often.
In fact, compliance is a key objective for smart packaging across healthcare. Novartis recently performed a drug trial using RFID-based packaging developed by Cypak in Sweden. Patients in the study were given a disposable pill pack with a microchip that buzzed when it was time to take a dose. It also recorded when patients popped each pill out of the blister and featured an electronic touch pad, printed directly on the packaging, which let patients answer questions about their experience with the drug. Pharmacists were then able to transfer the usage data to a computer to determine the results of the study, which showed that compliance had indeed been significantly increased.
That news is important because, according to Dr. Harrop, patients are prescribed “last resort” drugs on the premise that other drugs aren’t working when, in fact, he say, they’re not being taken properly.
But such systems are not cheap. Cypak’s packages are estimated to cost $15 each. Harrop says he is optimistic, though. “We have the road map. All sorts of elements are coming together to get costs down with these packs,” he says.
That’s nice if you’re a pharma company. But what if you’re a food, beverage or personal care brand? What can smart packaging do for you?
“Smarter” product attributes
It can enhance your product’s attributes, for one. In the late 1980s, Guinness began offering its frothy beer in cans after it developed a widget, a plastic nitrogen-filled ball that releases its contents when the can is opened. The effect of nitrogen on the beer helped to replicate the creamy, long-lasting head of Guinness poured from a tap and gave the brand new distribution opportunities.
Mortein insecticide, sold by UK-based Reckitt Benckiser, realized improved effectiveness from a higher-tech approach. Pressing the actuator on the packaging causes a crystal inside the can to generate static electricity and lightly charge particles as they are dispensed. The charged droplets essentially “chase” the flies, seeking out and covering insects more effectively than ordinary aerosols.
“Smarter” information for consumers
Smart packaging, specifically smart labels, can also help brands arm consumers with valuable information. Food and beverage manufacturers, for instance, can benefit by providing customers details about freshness, nutrition and shelf life.
Producers of pears are using Ripesense, a sensor label fitted onto a clamshell that limits consumers from handling the fruit and, instead, indicates how ripe the pears are with a color change that is set off by their changing aroma.
Other, more common, forms of smart labels include time temperature indicators, or TTIs, that map out the time and temperature correlation between products and their degradation. UK-based Timestrips are one example. But rather than monitor conditions within the cold chain, as most TTIs do, Timestrips are designed to help consumers monitor perishables in their own homes.
Nestlé’s UK unit began testing the labels last year in September on its Maggi brand of ready-to-use cooking sauces, and the company has since adopted the technology—which features built-in temperature sensitivities—as standard packaging on the product range.
Timestrip’s Joint CEO doesn’t want to divulge costs for the project. But, to give you an equivalent, he says U.S. consumers can purchase his labels directly for 16 cents apiece. “You can guess that when manufacturers buy in the millions, you’re looking at pennies,” he says.
Indeed, the food industry is ripe for smart packaging applications. You don’t have to look any further to see that than with the recent E. coli outbreak in bagged spinach. Such instances will likely become obsolete in the near future as packaging materials that alert consumers to the presence of pathogens begin to commercialize.
“Smarter” makes things easier
Of course, all of these technologies add costs to the already incredibly cost-sensitive packaging function. But justification can be easier when there are clear instances of adding value for the consumer. Convenience is obviously a big one.
Hamilton Beach, for instance, incorporated Timestrips into primary packaging for its Febreze TrueAir Odor Eliminator to help consumers monitor when it is time to change the filter on the product. When you consider how many other products and appliances in the home require replenishment—from water filters to HVAC air filters—you find that the case for such smart features—no matter how simple—quickly firms up.
Convenient food and beverage options are also the object of many smart packaging developments. In the United States last year, we saw the introduction of Wolfgang Puck self-heating lattes that were designed to offer portable, coffee house-quality lattes on demand.
Though, less than a year after the launch, it became obvious that there were technical issues with the product. Consumers were reportedly complaining about everything from the product’s failure to heat up properly, to it overheating, to it leaking from the can.
Truly, there is much to reflect on in smart packaging. And while some applications might still be years off, and others might seem trivial (like thermochromic inks that reveal a hula girl on a can); it’s clear that smart packaging has the potential to revolutionize the experience consumers have with your brand. The only caveat? Use it wisely.
“[Marketers] have now woken up, and they see they really need to differentiate their product with real innovations in packaging,” says Isbitsky. “But technology for the sake of technology doesn’t do anything. Ultimately it has to bring value to consumers.”
The author, Pauline Tingas, is the Senior Editor of BRANDPACKAGING.
Where to go for more information...
• Smart packaging research and consulting. At IDTechEx, contact Dr. Peter Harrop at +44 1256 862163 or www.idtechex.com.
• Smart labels. At Timestrips, contact Reuben Isbitsky at +44 7768 172789or email@example.com
• Consumer privacy. At CASPIAN, contact Elizabeth Albrecht at 877.287.5854 or firstname.lastname@example.org.
The dark side of smart packaging?
How can a simple RFID tag cause so much trouble? Certain applications of RFID are prone to abuse, says Katherine Albrecht, a consumer privacy advocate, specifically with item-level RFID:
• Unique IDs: Unlike a barcode where “my” can of Coke and “your” can of Coke have the same number, item-level RFID tags give each can a unique ID number. “If the tags are left live after the consumer leaves the store, which retailers are pushing for because they want to use the data to validate returns, it makes it possible for anyone to scan that unique ID and figure out who the person is,” says Albrecht.
•Stealthy scans: Barcodes require a line of sight scan—you have to hold up a package for someone to scan it. Because they are based on radio waves, RFID tags don’t. So, you give someone else the ability to do what Albrecht calls a “silent surreptitious scan” to conduct an inventory of your shopping bag, your RFID-embedded clothing or, in the case of smart cards, an inventory of your purse.
•Radio waves: A third, less-talked about, aspect of RFID is the impact of RFID radio waves on product quality and, even, human health. Some pharmaceutical products have already been found to be rendered unstable by exposure to electromagnetic radiation, Albrecht says. “In the U.S., people are reluctant to discuss [that aspect of RFID].”
For an in-depth look at this topic, please visit www.brandpackaging.com.