How to Move Toward the Smarter Packaging Solutions Customers Want

Today, you can buy almost anything online. You can order your groceries online and have them sent to your house. Clothing can be purchased from your favorite retailers with just a few clicks. Even pet food can be shipped directly to your home. With the increased reliance on e-commerce and the shipping industry, packaging companies have started introducing solutions to monitor and preserve sensitive products over great distances. Collectively, this technology is called smart packaging.

According to Modor Intelligence, the smart sensor industry was valued at $35.33 billion in 2018 and is expected to reach $44.39 billion by 2024. While research companies vary in predictions of what the market value will be, it is agreed that the industry is experiencing rapid growth. This upshoot of growth makes smart sensor technology more widely accessible for businesses of all sizes, leading to new packaging solutions. If your company is considering implementing smart sensors into packaging, this article is the place to start.  

Use Cases

There are many ways that smart sensors can be incorporated into packaging to solve a variety of problems industries face today. Here are a few examples…

The food industry is one industry benefiting from smart packaging technology. It’s implementing new packaging solutions that allow grocers to alleviate, among other issues, the proliferation of food waste. According to Deloitte, food retailers estimate that 31% of all food products are thrown out because of spoilage. Within the food and beverage industry, these losses result in $146 billion in lost revenue each year. Retailers and customers alike often don’t realize that products are edging closer to their expiration date until it’s too late and the food has perished. With smart packaging, retailers can monitor product freshness and quality by receiving notifications when food is close to spoiling. These insights can be used for more than increasing the visibility of food expiration. Data from smart sensors can reveal with certainty which products are closest to spoiling and need a price reduction or a more optimal store placement to lower the chance of spoiled inventory. This leads to increased profit margins, improved company sustainability, and increased protection against post-processing contamination. Companies that ship food products can also use smart sensors to monitor temperature during shipping to make sure that merchandise maintains its quality.

Smart packaging enables improved quality assurance by alerting when products may have been tampered with. Diageo, a brewery and distillery, uses flexible, near field communication (NFC) tags on bottles to alert suppliers if a seal has been broken. NFC tags are devices that supply their own power through electromagnetic induction and are awakened when an active device comes into range, usually no more than a few inches away. The tags respond to the small magnetic field generated by compatible technology, like smartphones and tablets. They do no processing of their own but simply convey information they are programmed with to nearby devices. A retailer can use these NFC tags to check the merchandise, verify whether the seal has been compromised, and determine if the product needs to be removed from the shelves. The tags used by Diaego also benefit customers by linking with their smartphones to provide them with cocktail recipes and promotional offers for similar products.

Smart sensor technology not only aids businesses but has practical applications for customers. Pillsy, a connected medication company, developed a smart cap for prescription medication containers and a connected platform to accompany it. The mobile app alerts customers when it is time to take medication and tracks when they last took the particular dosage. The cap has a battery life that lasts approximately one year and fits all standard-sized medication bottles.

By adding smart sensors to packaging products, packaging companies solve a number of problems for their customers and supply them with unique solutions.

Four Important Things to Know

The world of smart sensors in the packaging industry is dynamic and exciting! New changes are constantly made to improve packaging solutions and adapt to meet the needs of sensitive goods. Before integrating smart sensors into your packaging product offerings, here are four key insights about the industry.

1. Types of Smart Packaging

When considering whether or not to add a line of smart packaging to your company’s  products, it’s essential to know which type will best suit your industry niche.. There are two categories of smart packaging: active and intelligent. Active packaging seeks to sustain the shelf life or quality of a product. Supply Chain Quarterly explains further: 

“Active packaging responds to a triggering event (such as exposure to ultraviolet light or a decrease in pressure) by releasing or absorbing substances from or into the packaged product or its surrounding environment. Typically, this involves different components, such as moisture or gas scavengers or antimicrobial films, being embedded into the packaging itself.”

Intelligent packaging, on the other hand, is primarily used to monitor the condition of a packaged item during transportation and storage. Unlike active packaging, intelligent packaging does not alter the components of the packaging or contents. The information it gathers informs retailers/grocers about any changes that occur in the product. Intelligent packaging usually includes hardware components like temperature sensors, ripening indicators, or a radio frequency identification (RFID) system. RFID tags are a type of tracking system that utilizes radio frequency technology. The tags often come in the form of a smart barcode and transmit data from the tag to the reader to the RFID computer program. In the smart packaging industry, these tags are primarily used for the tracking of merchandise, shipping containers, and counterfeit prevention.

Often, a combination of active and intelligent packaging sensors are employed. Each packaged product is unique and requires a different solution (often composed of more than one sensor type). 

2. Choosing the Right Sensors Takes Time

When adding a line of smart sensors into packaging products, it’s important to remember that it may take time to find a sensor that suits the industry and merchandise needs of your customers. With many types of sensors on the market, there is a trial and error process in order to find the best sensor to fit the client specifications. There is no single sensor that will work for every product.

When choosing which smart packaging products to add to your inventory, keep the intended customer and common industry problems in mind. For example, if a company primarily sells packaging products to customers in the pharmaceutical industry, there is most likely demand for a packaging solution with the capability to monitor the temperature and regulate oxygen levels of particularly sensitive medication. This solution will likely require a combination of different types of sensors that can not only monitor oxygen and temperature levels but also adjust the oxygen levels should they get too high or low. This type of request would require distinct technology to fit customer specifications but is worth the satisfied customers.

3. Ensuring Proper Sensor Disposal

Determine what regulations exist for disposing of these sensors before adding smart sensors to packaging solutions and products. Traditional trash and recycling methods may not be suitable due to the materials within the sensors. Regulations may differ from location to location so it is important to look at how to dispose of them and potential costs that may come with it. 

By ensuring proper disposal, both your company and your clients operate ethically, reduce the strain of improper waste disposal on the environment, and attract environmentally-conscious organizations and customers. Managing packaging material waste is a large endeavor in itself, however, it’s important to find a workable solution for disposing of the smart sensors in packaging materials. 

4. The Industry is Still Growing

The world of smart packaging is still relatively new. Although it has made great strides in enhancing supply chain efficiency, improving customer satisfaction, and helping promote product quality, the industry still faces several challenges.

A big challenge the smart packaging industry faces is additional cost. The cost of developing and manufacturing smart sensors adds up quickly due to production time, labor, and materials. Supply Chain Quarterly discusses this issue further, pointing out that the main factors driving production cost are a lack of mass manufacturing and high cost of component materials, making packaging products with smart sensors a more expensive option. Deloitte observed that the cost of sensorization and the connectivity of smart sensors in 2004 averaged an additional $1.30 per package. They note that the cost has dropped significantly since then and predict that by 2020, the cost will average an extra $0.38 per package. As the industry continues to advance and manufacturers improve their processes, more cost-effective smart packaging solutions will become available.

Despite higher costs, more packaging companies are offering smart packaging solutions, allowing the industry to continue to grow and develop new, affordable solutions. It’s a dynamic and creative industry that is constantly adapting to the needs of customers. 

The Bottom Line

The world of smart packaging is an exciting one to be a part of. It is only going to play a larger role in the packaging industry as time progresses. Smart packaging provides unique solutions for a variety of products and customer needs. Not sure how to fit a new packaging line into production? Check out our blog on analytics for tips about optimizing line production, process improvement, and productivity!

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