Smart Packaging: What is it and Why it is the Future for Your Business

Exciting developments are happening in the world of packaging. It's a convergence of factors like changing consumer behavior, new regulations, advancing technology, and improved data management that's giving active, intelligent, and connected packaging, also known as "smart packaging," its moment to shine.

Smart packaging encompasses various technologies that might seem unrelated at first glance. However, when we look at its practical applications in industries like consumer packaged goods, fast-moving consumer goods, food and beverages, and pharmaceuticals, a common thread emerges. Smart packaging leverages the package itself to connect, record, communicate, and add value throughout the entire supply chain, going beyond its primary function of delivering a product to consumers.

 

Let's take a look at some real-world examples of smart packaging. Think of on-carton sensors that change color to signal milk spoilage or antimicrobial packaging from companies like Aptar, extending the shelf life of produce. In the pharmaceutical sector, smart packaging ensures that temperature-sensitive medicines, like biologics, remain within the required temperature range during transport to maintain their effectiveness.

 

Now, when it comes to connected packaging, products equipped with RFID or NFC radio transmitters can directly interact with consumers through smartphones. It's no longer a one-way communication street; brands can collect valuable data from consumer interactions to gain insights into behavior and adjust their offerings accordingly. Even the humble QR code, after a rocky start, is making a comeback, thanks to standardization efforts by organizations like GS1. These 2D datamatrix codes provide a wealth of data and offer versatile utility for consumers.

 

One exciting development in Europe, known as HolyGrail 2.0, involves digital watermarks discreetly printed on packaging, carrying a digital passport containing information about the product and package composition. Material recovery facilities can scan these digital watermarks to instantly identify the materials used in discarded packaging, improving sorting and recycling efficiency.

 

Clearly, the world of smart packaging is diverse and dynamic, with endless possibilities for enhancing consumer experiences and supply chain efficiency.

 

 

The Main Challenges: Data Management and Consumer Education. 
 

At the forefront of discussions in the smart packaging landscape are two significant hurdles: educating consumers on how to utilize smart packaging and helping brands and retailers effectively manage and leverage the data they gather from it. These challenges have been a focus of attention in recent times, and they are crucial for the industry's growth.

 

Consumer education is a top priority. Many consumers are still unfamiliar with how to make the most of smart packaging. Brands and retailers must bridge this knowledge gap to ensure that consumers can fully utilize the benefits. This educational effort is essential to unlock the potential of smart packaging fully.

On the other hand, brands and retailers are grappling with the vast amounts of data generated by smart packaging. Often, they find themselves overwhelmed by the sheer volume of data, unsure of how to put it to good use. It's a situation we could describe as "data paralysis." Instead of a shortage of data, they face an excess that can be challenging to manage and share effectively.

 

However, the expertise needed to tackle these challenges already exists. Companies like Appetite Creative, with their focus on enhancing consumer experiences through connected packaging, are making strides. They collect extensive data on consumer behavior through package interactions and establish feedback loops with brands. While it's true that brands may not yet fully utilize this data, there's a positive trend towards improvement.

 

Jenny Stanly from Appetite Creative believes that the pressure to use this data is increasing, partly due to legislative requirements and a changing corporate culture that emphasizes data and its management. Breaking down data silos and fostering easier data sharing within organizations will be the most challenging aspect.

 

It's important to note that Europe is ahead of the United States when it comes to legislative pressures related to packaging data use and ownership. For example, the Drug Supply Chain Security Act (DSCSA) in the U.S. has faced delays in its compliance milestones, with an extension to 2024 for full enforcement. In contrast, Europe has been more proactive in regulating these aspects.

 

In summary, the challenges of data management and consumer education are central to the advancement of smart packaging. While these hurdles are significant, there is a growing awareness of their importance and a positive shift towards addressing them effectively.