Smart Packaging in Personal & Home Care Industry

Overview of Smart Packaging in Personal & Home Care Industry

Background

The industrial revolution has had an everlasting impact on the lives of every individual and continues to do so, as of now. Earlier, the production and consumption of goods and materials were comparatively lesser and were confined to a particular geography. Hence, the need for meticulous packaging was not much pronounced. However, with advancements in technology and globalization of markets, the need for materials has increased. With an increase in the gap between production and consumption, the need for safeguarding and protecting goods becomes mandatory. This can be achieved through proper packaging of goods. Technological advancements in the packaging sector have contributed to significant innovations in packaging materials over the last two decades.

Current Scenario

Packaging as an industry has evolved at a rapid pace over the last decade. Nowadays, the design as well as the packaging of every product decides consumer behavior, as it defines how much the product appeals to the consumer. Be it a chocolate box or a new mobile phone or a cosmetic product, packaging plays a vital role in impacting consumers’ perception and influences their buying pattern. In an era of lean and sustainable manufacturing, the packaging industry has taken a quantum leap towards implementing smart ways of packing to lure consumers. It also paves the way for reduction in wastes and tonnage, which enables cost-effectiveness for businesses. Smart or intelligent or interactive packaging, as it may be called, covers the entire ambit of the methodology of packaging, which shall bring about significant transformation in the ease of doing business, thereby impacting consumer behavior in a positive way.

Smart Packaging in Personal & Home Care Products

The concept of smart packaging is gaining acceptance in the cosmetics and personal care domain. Smart packaging primarily deals with devising innovative ways to package a product. There are mainly two types of smart packaging, namely, active packaging and intelligent packaging. The former is a kind of packaging wherein the packing interacts with the product in a manner suited to the use. For example, a cosmetic tube may be provided with a heating element inside, so as to suit the customer’s preferred way of usage. The latter type makes the packaging more interactive; packaging materials are embedded with communication devices, such as sensors. Sensors used in near field communication and radio frequency identification provide accurate information, such as inventory tracking and counterfeit prevention, as well as supplements product security for users. Smart packaging has another category of meaning when the package not only contains and protects the product but also functionally enhances the product, or aspects of product consumption, convenience, and security.

Listed below are some of the technologies extensively used in intelligent smart packaging:

1. Artificial Intelligence
2. Near Field Communication (NFC)
3. Radio Frequency Identification (RFID)

Artificial Intelligence:

The digital era is continually evolving and maturing day-by-day, thereby disrupting business models and project life cycles across the globe. Artificial intelligence (AI) is one such technology wherein human intelligence is simulated by machines, especially computers. The packaging industry has gradually shifted toward the adoption of AI. AI is mainly useful across various sectors, particularly the Fast Moving Consumer Goods (FMCG) sector.

¹PackagingInsights talks with industry experts on the potential of AI within the FMCG sector.

The internet is transforming the grocery trade, just as it has revolutionized so many other retail sectors. Technology is transforming both supply chains and the consumer’s relationship with shopping and products alike, and packaging has a key role to play in this.

– Alexandre Carvalho,  Marketing Services Director at Tetra Pak speaking with PackagingInsights about the benefits of AI

Min-Kin Mak, the Vice President Corporate Development and Digital Transformation at SIG, tells PackagingInsights that AI will impact packaging in three distinctive ways.

First, AI via the use of analytics and predictive tools will allow a better match between demand and supply by recognizing patterns and analyzing fluctuations on the consumer-demand side and allocating supply capacity along the value chain in time. Second, on a production level, AI tools can optimize technical parameters to drive higher output and improve reliability/technical availability of equipment (e.g., predictive/prescriptive maintenance). Third, AI will enhance the customer experience by personalizing the content associated with a specific pack.

Sustainability with AI: Artificial intelligence may pave the way for an improved administration of the whole packaging supply chain and can provide insights to manufacturers for streamlining entire processes.

¹AI will trigger and accelerate trends that positively impact sustainability, such as increasing system efficiency, thereby reducing environmental footprint. Additionally, predicting demand and consumption rate, based on weather data can help improve food supply efficiency by reducing avoidable food losses from field-to-fork.

– Mak – Vice President Corporate Development and Digital Transformation at SIG

Near Field Communication

Near Field Communication (NFC) is a wireless technology that allows a device to collect and interpret data from another closely located NFC device or tag. It also provides a suitable way to communicate information, which may be used for advertising or social media purposes.

NFC technology may be easily adopted in the personal care domain, as its implementation makes the whole supply chain process easily traceable. Major benefits of NFC packaging are enhanced consumer engagement and brand protection. Nowadays, several companies use NFC tags for packaging. NFC tags are small, flexible, and battery-free, and can be easily integrated into labels and packages. The main benefits of using the NFC technology are listed below:

• Better brand transparency and protection
• Enhanced consumer experience
• Improved insights into consumer behavior
• Better traceability

Radio Frequency Identification (RFID)

Radio Frequency Identification (RFID) is a technology wherein the data is encoded in RFID tags or smart labels and retrieved by radiofrequency waves. This technology is very much similar to barcoding; however, the RFID is much more advantageous when compared to barcoding. The most notable advantage being that the RFID tag can be read outside the line-of-sight, but barcodes must be aligned with the scanner.

The RFID technology has been used extensively in the packaging space, due to its easy adaptability. The adoption of the RFID technology for packaging provides greater inventory accuracy to fulfill the increasing demand for global shipping. The issue of shelf-life is a challenge for the cosmetics industry, which is not shared by the apparel market. RFID, however, seems ideally suited to the task of managing expiry dates, as tags can hold the information on an item-level, which means that the store staff receives real-time visibility on the shelf-life of every item in the store and would receive alerts warning them when items are close to or past their expiry date. This also enables products to be marked-down to ensure they are sold before expiration.

Major Players and Collaborations

With the rising demand for beauty and personal care products, managing their supply chain is becoming a difficult task. The whole process of the supply chain becomes traceable by adopting smart packaging in the personal and home care domain. This devises a way for accurate insights on the stocks and inventory. Additionally, consumer behavior towards products are becoming easily predictable, which might be advantageous for businesses. Some of the personal care companies have started to adopt smart packaging. ²A brief synopsis of some of the companies is given below.

Strategic Collaboration

³Apart from the above-mentioned firms adopting smart packaging, there are other renowned companies that partner with smart packaging firms. One such collaboration is between Henkel and Selinko. These two companies have partnered for improving the smart and interactive packaging solutions, primarily focusing on FMCG markets.

Innovative smart packaging applications allow consumers to interact digitally with consumer goods by using their mobile devices. This technology enables a unique product digital experience and creates a direct link between brands and consumers.

“We are pleased about the collaboration with an industry leader like Henkel who combines technology know-how and broad brand expertise,” as quoted by Patrick Eischen, Founder and Chief Executive Officer of Selinko. “Henkel is investigating NFC-based smart packaging solutions and printed electronics technologies that will bring a whole new range of cost-effective and exciting opportunities for brands. We believe that our partnership will improve smart packaging services and solutions and will help enable the Internet of consumer goods.”

Another example of companies using smart packaging solutions is Henkel that uses scrap or used plastics for laundry detergents packaging. This type of packaging uses the least amount of materials possible and paves the way for the use of recycled plastics.

Adoption of Smart Packaging Materials in Personal & Home Care Industry

Smart materials are designed materials with one or more properties that can be significantly changed by external stimuli, such as stress, moisture, electric, or magnetic fields. Nowadays, the personal & home care industry has started using smart materials for its packaging needs, as the use of such materials makes products more consumer-friendly and interactive. For example, a cosmetic product has two packaging units, namely, primary and secondary. The primary packaging unit contains the cosmetic product, whereas, the wrapping cover for the primary packaging forms the secondary packaging unit. The primary packaging unit is made up of smart materials, and thus, any change in the properties of the cosmetic product will be revealed by the packaging material due to the ability to change its physical property.

Universities Collaborating on Smart Packaging

Some of the world’s renowned universities are also interested in undertaking research in the field of smart packaging materials. A few of these universities are listed below.

Nottingham Trent University

⁶The Nottingham Trent University has a strong strategic focus on developing new materials with super-water-repellent and luminescent properties. The university staff is working on the intelligent design of new materials and high-tech products. Smart Materials and Design is a strategic proposal aimed at enhancing interactions between academics in Science & Technology, strongly supported by EPSRC funded research and the university staff in Art & Design who have significant industrial involvement. This proposal aims at creating a suite of joint feasibility projects, which undertake new developments in materials (super-liquid repellent surface, super-wicking surfaces, transparent, and flexible light-emitting materials) and focus on product design research for applications of these new materials in areas, such as technical textiles (e.g. electroactive/functional yarns/fabrics) and smart packaging.

The University of Liverpool and The University of Northumbria

⁷Both these universities have jointly conducted research focusing on smart packaging, exploring smart materials. The research outlines various parameters that may affect the use of smart materials in the packaging industry. Some of them are listed below:

• Anti-microbial packaging
• Active materials
• Nanotechnology
• Cost-effectiveness

Drivers for Smart Packaging

Smart packaging for goods is packaging that goes beyond the basic function of passively containing and protecting the product by adding useful functionality with real benefits for the consumer. The demand for smart packaging has been increasing over the years, as it provides ease of maintaining the entire supply chain and can offer different benefits to the brand, retailer, and consumer. There are five main market drivers that impact smart packaging trends. These are listed below:

• Emerging markets
• Holistic design
• Sustainability
• Laws & regulations
• Consumer drivers

Emerging Markets

Nowadays, packaging production is more product-oriented; but, the future aims at packaging being more consumer-oriented. The prevalence of emerging markets is considered to be one of the main drivers for smart packaging. Fast-growing economies include BRIC countries, along with Bangladesh, Egypt, Iran, Pakistan, Mexico, Nigeria, the Philippines, Turkey, South Korea, Vietnam, and Indonesia.⁸ As quoted by Jocelyne Ehret, Director of Packaging Consulting Services for PTIS in Europe, the middle-class consumer base for smart packaging is expected to grow to two billion by 2050, which, in turn, impacts the changing market trends.

Holistic Design

Packaging design involves several considerations, ranging from protecting package contents to articulating and communicating desired brand impressions. Design elements are combined into more complex (cognitive) components or factors of design, which are then aggregated during perception and convey particular characteristics (i.e., of a brand) to consumers. The fast-changing consumer attitude towards the packaging design affects the smart packaging market, which propels manufacturers to be proactive to meet the change in demands.

Sustainability

Presently, sustainability has become the buzzword for packaging. Smart packaging technology specialists are not limiting their foresight to advancements in digitization but are looking to align it with eco-friendly solutions. With changes in stringent environment regulations, the ways to adopt sustainable smart packaging is becoming inevitable. Several government bodies provide tax exemptions to packaging companies devising innovative and sustainable ways to reduce the ecological footprint.

Laws & Regulations

One of the most important drivers for the smart packaging industry is governing bodies that regulate the use of packaging materials. Regulations and laws governing the use of packaging materials are very much stringent, and their effect on the packaging trends seems to be prominent. This, in turn, has propelled the demand for reusable and eco-friendly packaging solutions.

Consumer Drivers

Consumers’ motivation for purchasing is derived from four overreaching drivers, namely:

• Safety/peace of mind
• Wellness
• Gratification
• Convenience

For each driver, there are a number of dimensions. For example, under wellness, dimensions include basic nutrition, nurturing, prevention, cosmetic, and performance, among others. It becomes important to understand where the new packaging materials fit among all these dimensions.

Future Prospects

The future of smart packaging appears to be promising, owing to the increasingly complex supply chain models that propel companies to explore packaging solutions that will keep products fresh and protected, while being transported from the warehouse to the consumer’s doorstep.

⁹In 2019, packages, products, or shelf tags, embedded with NFC chips will begin to become more common, driven by the growing consumer familiarity with contactless payment systems. As with NFC’s close cousin e-labelling, it offers manufacturers several opportunities.

The global market for smart labels is:

• Valued approx. USD 5 billion in 2017
• Predicted growth of 18% CAGR between 2018 and 2024
• Predicted USD 16.30 billion by the end of 2024

40% of 300 million metric tons of plastics produced annually is used for packaging. Much of these end up in landfills or the environment. 2019 will witness the demand for new bio-plastics made up of renewable raw materials, such as starch, vegetable oils, and cellulose.

References

1. https://www.packaginginsights.com/news/ai-in-packaging-how-artificial-intelligence-is-driving-the-packaging-industry-forward.html
2. https://blog.nxp.com/near-field-communication/beauty-products-get-a-makeover-with-interactive-secure-nfc-tags
3. https://selinko.com/press/selinko-and-henkel-to-partner-for-smart-packaging-solutions/
4. https://bizongo.com/blog/innovative-cosmetics-packaging/
5. https://www.invest-in-saxony-anhalt.com/smart-materials-multi-talented-films
6. https://gtr.ukri.org/projects?ref=EP%2FI016414%2F1
7. https://livrepository.liverpool.ac.uk/3023106/
8. https://www.packworld.com/article/package-design/strategy/eight-drivers-todays-packaging-trends
9. https://www.manufacturing.net/article/2019/02/process-manufacturing-predictions-everyone-wins-really