Smart Packaging is one of the hot new trends that both excite and confuse owners. The more you understand about this emerging industry, the more you’ll see how it fits into your current - and future - packaging strategy.
Is it something you need to consider for your operation today, or is it a passing fad that may not even come to fruition? Understanding how - and if - this innovative approach to packaging fits into your business is challenging.
Tapping Into Smart Packaging Experts
When I get excited about a new trend, the first thing I do is learn as much as I can. Knowledge is power, so let’s help you make power-packed decisions by giving you a comprehensive overview of Smart Packaging.
I reached out to Jackie Marolda of AWA Alexander Watson Associates for some deeper insights. Check out her expert interview here - you’ll find her comments throughout the post. She’s provided us with many of the definitions you’ll see here.
I’ll also be reaching out to Andrew Manly, Communications Director of the Active and Intelligent Packaging Industry Association (AIPIA) for additional background.
Note: You may see references to Smart Packaging and Active and Intelligent Packaging (A&IP) -- they are one in the same.
What is Smart Packaging?
Smart Packaging enhances packaging functionality through two methods: Active Packaging and Intelligent Packaging. Active Packaging enhances functionality, while Intelligent Packaging can communicate the packaged content’s status, or communicate other messaging. It involves a combination of specialized materials, science and technology.
Here’s a video that provides a good overview of Smart Packaging - also referred to as Active & Intelligent Packaging:
Let’s break out Active Packaging and Intelligent Packaging a little bit more, courtesy of these two definitions from Jackie Marolda:
What is Active Packaging?
Active Packaging involves the ‘sensing’ and/or ‘manipulation’ of the packaging environment, primarily to better retain the microbiological quality of the contents. It includes barriers, absorbers, scavengers and other controllers of active variables.
What is Intelligent Packaging?
Intelligent Packaging involves ‘sensing changes’ in the packaging environment and ‘communicating’ or ‘signaling’ information about the change. The packaging can communicate:
- Supply chain management & control
- Gas concentrations within the packaging
- Microorganism or pathology growth
- Marketing and branding messages
What is the Size of the Smart Packaging Industry?
Estimates vary on the size of the Smart Packaging industry. Ernst and Young reports that the Global Consumer Packaging Market is valued at $400 billion (US) - $500 billion if industrial end products are included. The Smart Packaging segment is estimated to reach nearly $40 billion by 2020.
Andrew Manly of AIPIA said a recent Smithers Pira report put the number for Active and Intelligent Packaging at $10.5 billion by 2021, but believes that number could be on the low side.
“If you add all the anti-counterfeit, security and tamper evident features (holograms, QR codes, etc.) then it gets huge,” Manly said, with some estimates as high as $15 billion just for pharma alone by 2020.
The industry is expected to grow at an annual rate of 5 to 8% annually through 2020. Marolda notes that those estimates do not include a breakout between Active and Intelligent Packaging.
How Does Smart Packaging Design Work?
This graphic explains how this enhanced functionality all works together. Packaging has four basic functions: Protection, Communication, Containment and Convenience. Active and Intelligent Packaging enhance the protection and communication functions, respectively.
Source: AWA Alexander Watson Associates
In the case of Active Packaging, the packaging itself has been enhanced to improve functionality. Marolda talked about a milk producer that has used a special liner on its cartons to extend the shelf life of the milk.
In the case of Intelligent Packaging, a meat producer may use Smart Packaging to provide a special message that the contents are past the expiration date. The packaging label may change color to alert the consumer.
“The Intelligent Packaging side is emerging faster,” Marolda said, as new technologies are being developed to enhance communication with consumers.
What’s Driving Smart Packaging?
Smart Packaging is much more than just new bells and whistles - the implications are enormous in terms of the potential savings to companies and consumers. Consider the key driving forces behind Smart Packaging:
Safety. For the food and pharmaceutical sector, safety drives decisions. As Marolda notes, “The hazards for these industries are expensive, dangerous and can kill a brand.” For these companies, Smart Packaging is like an added insurance policy.
Brand protection. Increasingly important to companies suffering hits on the grey and black market, Smart Packaging can help verify the authenticity of products.
Shelf life. Besides the safety issue, food spoilage is a huge issue. If Smart Packaging can extend the shelf life of a product by just a day, the cost savings are enormous. Check out the video demo of how shelf life can be extended.
Legislation. More stringent regulations on food and pharmaceuticals are motivating the industry to innovative and find effective ways to help products stay in compliance.
What’s Hindering the Growth of Smart Packaging?
“Smart Packaging is in its infancy,” Marolda notes. The industry will continue to grow, as noted above, but there are a few barriers to rapid expansion:
Money. For many of these products, the packaging is simply too expensive. The technology and science has been there for years -- it’s just not economically feasible.
Legislation. Legislation may also be a barrier for some packaging.
Sustainability. Many of these technologies simply don’t fit into the recyclable world. Without some degree of sustainability, the potential for implementation in a climate (no pun intended) of increasing environmental awareness won’t be possible.
Too early. Smart Packaging is the new kid on the block, and there are not a lot of examples of proven successes. Without solid evidence that this is a commercial success, the only players will be early adopters at this stage.
“It takes money to invest and time to take off,” Marolda said.
What are Some of the Verticals Using Smart Packaging?
According to Manly, “Drink segments in particular are using A&IP to improve brand security (anti-counterfeiting).”
He notes that Pharma is seeing advantages for traceability as well as patient compliance, and that the Food industry is a bit slow because of retail price wars. However, with an eye on food waste, A&IP is looking to eliminate “Best Before” or “Sell By” labels and replace them with A&IP condition monitoring devices.
What will prompt more rapid acceptance?
Manly believes “retailers” will be the key to mass acceptance, as well as consumers using their phones to interact with A&IP. Ultimately, it’s up to the A&IP sector to “work with packaging makers and designers to provide long-term benefits, not just one-off promotions or gimmicks.”
Smart Packaging Solutions
Take a look at these examples of Active and Intelligent Packaging, and you can see the tremendous promise and opportunity the industry offers:
Nanocellulose-Zeolite Composite Films for Odor Elimination
Odor removing zeolite–cellulose nanofibril films could enable improved transport and storage of fruits and vegetables rich in odors, for example, onion and the tasty but foul-smelling South-East Asian Durian fruit.
Antimicrobial Packaging - Sanocoat
Mondi Consumer Coatings offers an innovative anti-microbial packaging solution called Sanocoat. Benefits include:
- Prevention of germ growth
- Inhibition of mould (Candida albicans)
- Hygiene maintenance and significant bacteria reduction (E.coli, S.aureus)
- Odour control
- Increase in shelf life and product freshness
DueDrop is a visual indicator that clearly signals the end of the product’s secondary shelf life, encouraging consumers to use the product at it’s best, and designed to stimulate re-purchase when the product is determined to have expired.
MaXQ is a powerful coding system that allows generation and printing of unique, serialised codes that can be scanned and read with a smart phone or sent via SMS.
The codes are printed directly on the packaging, and provide fully customizable interactions between brands and their consumers. Uses for the dynamic codes can include anti-counterfeiting, consumer engagement activities and feedback.
The REMEDIES Project
The REMEDIES project is using Smart Packaging to help reconfigure medicine’s end-to-end supply chain.
Where is Smart Packaging Heading - Key Takeaways
1. It’s More Pragmatic Than a Technology Like 3D Printing
Initially when I learned about Smart Packaging, my first thought went to 3D printing: A cool technology, but does it have application?
As you’ve seen by some of the examples we’ve shared, and by what’s driving Smart Packaging, this exciting new technology has some real-world applications. Unlike 3D printing, which hasn’t presented itself with a lot of commercial, scalable applications, Smart Packaging has not only a realistic future - it has a present.
2. It’s at its Best When it Blends Active and Intelligent Functionality
While we categorized some of the examples into Active and Intelligent functionality, Jackie Marolda explains that Smart Packaging becomes an intrinsic part of the distribution stream, working on a variety of levels.
“When you combine brand protection, safety, convenience, and conveying product information, it becomes a much bigger tool for supply chain management,” she said.
3. It’s Not for Everyone - But it Has Amazing Niche Potential
For small and mid-sized businesses, the catalyst for double-digit multiples in the sale of your business is to niche in a high margin, innovative area. Smart Packaging offers that opportunity for the forward thinker.
Don’t think of it as something you’d need to develop on your own. As Marolda points out, Smart Packaging involves three specific disciplines:
If you develop a specific piece of technology, you can partner with companies like Mondi or Avery, who bring the other parts of Smart Packaging to the table.
Smart Packaging is a wide-open field that seems to be growing right before our eyes. It will be the right combination of innovators and established players with capital who will really make it work.
“We see ‘critical mass’ as being just around the corner,” Manly noted, pointing to brand owners using A&IP more, and consumers using their smartphones to interact with products. “We see a very exciting 12-18 months ahead,” he said.