- August 01, 2003, AWA Alexander Watson Assoc.
AWA Alexander Watson Assoc. explores the options and opportunities in security, brand protection, and product authentication with today's active packaging.
Packaging: A Multiple-Choice Question
Corey M. Reardon looks at the many options — and opportunities — available to end-users and their converters in packaging and labeling.
The world of packaging has never been so “active.” Today's packaging buyers have an ever-increasing array of choices. Glass bottles, flexible and rigid plastic containers, pouches, cartons, blister packs, cans, sachets — all these and many other options are in use today.
The fast-moving consumer goods manufacturers know their markets — they need to in order to retain their competitive advantage, especially on the supermarket shelves — and to present their products in a way that is most likely to attract buyers.
At the same time, they need to be aware of a number of other issues related to the life of their products: branding — the first consideration; product authentication and security from tampering; protection against retail theft; product tracking and inventory control; the needs of automated retail checkouts; and the increasing concern about countering terrorist-type acts on product containers and contents.
These are issues that transcend the capabilities of the actual packages themselves and introduce a second tier of activity for the packaging buyer: the need to decorate the container and identify the contents for all these different requirements.
Once again, the options today are extensive. Buyers can opt for intaglio or relief moulding on their containers — including even the brand name as a primary or supporting product identification option. The opportunities for direct print onto containers have expanded from traditional screen and thermal print processes to include direct-printed waxed cartons and flexible film pouches, which require no additional overprinting or labeling.
Then there's the entire spectrum of labeling options. Today's leading label technology — both for prime labels and for variable print information — is self-adhesive, but it faces strong competition.
Wet glue labeling, the “old man” of the industry, still retains a major market share. It is good for long runs of same-sized packages. The application machinery is robust and durable. It does not share the flexibility of self-adhesive labeling technology, but it is still very much the right answer for many day-to-day, high-volume product identification and branding tasks — especially where price is an issue.
That, however, is only the beginning of the story. Today, there are many other choices available to the packaging buyer. Stretch and wraparound sleeves are a good example — and a particularly popular choice on PET bottles.
In-mold labeling (IML) continues to grow — particularly in North America and now increasingly elsewhere — for medium-to-long-run applications on blow- or injection-molded containers. IML gives a smooth and durable end result.
Perhaps the most exciting of the newer options available to packaging buyers today is the shrink sleeve, which, from a standing start just five years ago, now commands a growing percentage of the product identification market. It can combine the esthetic qualities consumers admire with real, active, added functionality. By covering the container from top to bottom, it can act as a tamper-evident seal, and when applied to a glass container, also can provide shatter protection.
Mix and Match
But the packaging market today is not a choice between product decoration and identification technologies: It is often a mixture of them all. In my work as a consultant in the packaging and materials markets, I see packaging buyers increasingly choosing a variety of technologies — mixing and matching the packaging and decoration technologies they use to achieve the best possible cost/performance ratio across the product range.
No technology today is used in isolation. The same product in different variants may carry its product identification in different ways, according to what represents the most satisfactory total applied cost. Differently sized containers often get different treatments: In-mold is ideal for industrial sizes of chemicals, for example, where the household equivalents probably will carry a self-adhesive label or direct print.
But the difference need not be package size: It could be the location of a filling or packaging plant, volumes sold in particular regional markets, or a requirement for multiple languages rather than one long single-language run. With margins the critical factor for brand survival, packaging buyers are using every device at their disposal to achieve the optimal balance of price and performance.
This is good news for the converter — particularly where today's high-speed narrow web presses are involved. Mark Andy, Nilpeter, Gallus, and others offer presses that aren't just suited to the one basic substrate (which usually has been self-adhesive rollstock). The narrow specialism of self-adhesive label print now is actually a much, much broader field of opportunity. High-speed narrow web presses give superb results with self-adhesive label stock, but they also can give superb results on cartons, unsupported films, and sleeves — even on toothpaste tube laminate. Ink, plate, and die manufacturers, too, recognize that the increasingly broad portfolio of materials on which a narrow web converter prints makes it imperative that changeovers be managed swiftly, without trouble, and without too extensive an inventory of process ancillaries.
This is a time of real activity in the packaging market — and it's good news for converters, good news for material and ancillary suppliers, and good news, as well, for the packaging buyers.
Dr. William Llewellyn, senior associate, AWA Alexander Watson Associates and an independent international business and technical consultant provides an overview of the current options.
Changes in consumer preferences lead to innovations and developments in new packaging technologies. The growth in sales of fresh foods and chilled ready meals has resulted in the development of many forms of active packaging — including the interest in anti-microbial packaging.
Anti-microbial packaging is a method of food preservation providing anti-microbial properties in addition to basic barrier packaging properties. Incorporating microbicidal or microbistatic agents achieves the same functionality in the packaging system, whether they are used in actively anti-microbial polymeric materials as coatings or incorporated into the extruded polymer.
Anti-microbial packaging systems are beneficial to the food industry as well as to consumers since they can extend product shelf life and maintain food safety by reducing the growth rate of microorganisms. The packaging system can both inhibit microbial growth on non-sterilized foods and maintain the sterility of pasteurized foods, thus preventing post-contamination.
In addition to the traditional pack considerations of barrier properties to gases and moisture and of mechanical strength for pack integrity, the anti-microbial pack also must consider:
Inhibition mechanism of the anti-microbial agents used;
Chemical nature of the anti-microbial agents;
Physical chemistry characteristics of foods;
Microflora of foods and physiology of target microorganism;
Migration mechanisms of anti-microbial agents into foods;
Film or container manufacturing processes and their influence on efficiency of anti-microbial additives;
Toxicity and regulatory issues;
Organoleptical property of the anti-microbial agents.
Machinability and processability of the anti-microbial packaging on the packaging line materials. Research and development trends in anti-microbial packaging systems may progress to achieving more effectiveness and better anti-microbial activity within a broader spectrum, utilizing natural extracts, and creating new applications for non-food uses.
There are generally two types of anti-microbial film — those in which the anti-microbial agent migrates from the film or coated film surface and those in which the agent remains within the film or coating. Due to the nature of food, films or coatings in which the agent does not migrate to the food surface will be of limited effect, though they may be of interest in other applications requiring anti-microbial properties such as medical gowns, pillows, and other items of hospital ware.
Among the most common anti-microbial materials are organic acids and their salts. Table I lists some common materials.
Typical applications include the use of potassium sorbate on low-density polyethylene (LDPE) for cheese packaging; calcium sorbate in CMC/paper constructions for bread wraps; benzoic acid anhydride in LDPE for fish packages; imazalil in LDPE for bell peppers and cheeses; and grapefruit seed extract in LDPE for lettuce and soy bean sprouts.
Salt, Acid, Anhydride
Lysozyme, Glucose Oxidase
EDTA, Citric Acid
Carbon Dioxide, Ozone, Chlorine Dioxide
Source: Prof. Paul Dawson, Clemson Univ.
The application of anti-microbial agents to food packages can take several forms. The agents may be added, for example, at the extruder when the film or coextrusion is produced. High temperatures and extruder shear can cause deterioration in the performance of the anti-microbial additives. Alternatively, the anti-microbial ingredient can be included in coatings applied to the film surface. The advantages of off-line coating are the controlled manner of application without the exposure to excessive heat, and the ability to apply coatings at a later date, minimizing risk of contamination. A third option is to include a sachet of anti-microbial agent within a pack that has, for example, been considered for the control of pathogens in meat trays.
Several studies have been published on the efficiency of various anti-microbial coatings. Clemson University remarked on the efficiency of nisin as an anti-microbial agent but found the cure rate and the high cost of coatings are commercial barriers; and Korean universities have investigated and commented on the migration methods related to several anti-microbial polymer coatings.
Chlorine dioxide produced by the hydrolysis of an acid anhydride is showing considerable promise. It is likely the major application for this technology will be in the packaging of freshly harvested fruits and vegetables, with additional potential uses for cheeses and other foods, excepting meats. Anti-microbial compound based on chlorine dioxide technologies for direct use in extrusion processes is under active development and may be preferred to off-line coating on cost grounds.
An additional refinement to the anti-microbial pack can be the inclusion of a suitably treated label providing a sensor to warn of the presence of a variety of pathogens. Avery Dennison is developing labeling systems capable of identifying microbial activity in a range of foodstuffs including fresh meats, green vegetables, and a variety of prepared foods such as deli hams, hot dogs, chicken salads, etc.
Anti-microbial packaging is just one in a range of active packaging technologies currently addressing the safe packaging of fresh foods. Other approaches include gas flushing, modified and controlled atmosphere packaging, oxygen scavenging packaging, etc.
There are also the traditional food processing routes of steam and heat sterilization or radiation. However, consumer demand for freshness and taste will place increasing emphasis on the packaging technologies, and the use of anti-microbial packaging will help address this need.
RFID: Tomorrow's Active Packaging Technology
Dr. William Llewellyn, AWA Alexander Watson Associates senior associate, looks to the future.
RFID (radio frequency identification) technologies have been established for a number of years and, once fully commercialized, are set to enjoy substantial growth — estimated in the short term at around 10%, with medium-term growth predicted at a higher rate of 13%-15%/annum. Success so far has been mixed due, in the main, to potential users' concerns about high implementation costs and the possible problems associated with integrating read/write equipment within existing bar code hierarchies.
RFID labels are priced today from $1 down to about 15-35 cents/label if millions of units of the simplest designs are ordered, limiting current usage to higher-priced consumer goods and supply chain management applications. For fast-moving consumer goods (FMCG) applications, it is argued that a commercially realistic unit cost must approximate to around 5 cents/label for case or pallet level, and around 1 cent/label for individual product packages.
However, current costs have not prevented applications for RFID labels in a wide range of product security and tracking uses. Major retail outlets are using RFID technologies for tracking and traceability of clothing and designer goods; higher-priced technologies are used in reusable transport cards; airlines are experimenting with RFID tags for luggage traceability and management; and the US military is using RFID tags for logistics and supply management without the need to unload and without the risk of physical and mechanical damage to labels that often disrupts the movement of military goods.
Gillette claims a cost breakthrough that enables RFID technologies to be used with FMCG products. Thanks to the purchase of some 500 million RFID tags for application to razor prepacks, Gillette can track product sales through their chosen outlets — Wal-Mart in the US and its U.K. subsidiary ASDA and Tesco.
In another initiative, leading businesses — including Woolworth, Dell, and EMI (working with Wal-Mart/ASDA) are partnering with the U.K. government to control illicit trade in stolen and counterfeit goods by fitting anti-theft RFID tags to goods at risk — mainly laptop computers, CDs, and fashion clothing.
The sheer scope of this project is an indication of just what RFID can offer product manufacturers for the future. It can create extraordinary opportunities to acquire information on the movement of products and — in this era of squeezed margins and cost pressures — to streamline supply chain management as well as protect goods from the threat of theft. It is estimated the market for smart label systems could be $4 billion in 2005, increasing to $11 billion in 2010, with the highest growth rates in North America and Europe, followed closely by Asia.
“A Global Study of RFID Labeling Technologies—2003” will be published by AWA Alexander Watson Associates later this year. This major study will define markets by technology and geography and detail volumes and growth trends. For more information contact AWA; awa-bv.com.
An RFID label — often referred to as a “smart label” or an “electronic label” — is an identification label as thin as paper, with an integrated microchip and antennae for contact-free transfer of data.
The label or tag may be “active,” as it is partly or completely battery powered, or “passive,” in which case it does not contain any internal power source but is powered by signals from an external source. It is further classified as “Read Only” when the information is written on the chip during manufacture and can be read only by remote readers and never changed; or it can be classified as “Read/Write,” when new data can be written into the label at various stages within a supply chain.
The simplest forms of RFID systems are the Electronic Article Security (EAS) tags used as anti-theft devices. They contain no information and respond only to a signal sent out from a transmitter/receiver, indicating the presence of a tag or label that has not been deactivated.
RFID at its most sophisticated is similarly system-based but active. Each RFID label consists of four major components:
Base material & adhesive
Depending upon the size and type of microchip, significant information can be stored, added, and subtracted during the labeled product's life cycle. Scanning can be up to 2.5 m away and can penetrate even through shipping and packaging materials. Each RFID tag has its own unique identity, and each RFID transmitter can be programmed to a specific frequency and range.
Once this information is coded onto a chip, it remains there and stores a record of each step through which the product passes — very helpful in the case of theft or diversion, as it makes it very difficult for the product to pass undetected into a distribution channel other than that intended.
Growth Opportunities in Product Authentication and Brand Security
The product authentication and brand security market is being researched in depth by AWA Alexander Watson Associates for a forthcoming study in its series of concise, focused AWAreness Reports, which provide timely “executive summaries” on a variety of topics relating to the packaging and converting industries. Initial research findings show exciting trends and growth opportunities.
Materials that provide anti-tamper, anti-counterfeit, anti-theft, and brand security are in greater demand than ever before. Counterfeiting and product tampering are increasing at an alarming rate, and digital technology has made it easier to duplicate product packaging and labeling.
Globally, nearly $250 billion is reported lost annually to counterfeiting. In the US, the motion picture industry estimates counterfeited videotapes cost them approximately $750 million a year. CD counterfeiting is estimated at hundreds of millions of dollars of lost revenue. The automobile industry reports estimated sales of counterfeit and imitation replacement parts to be more than $1 billion annually. Clothing, cigarettes, handbags, watches, sunglasses, perfumes, liquor and wine, and, increasingly, pharmaceuticals, often are counterfeited.
These numbers are just the value of the goods in lost sales to the manufacturer or rightful “brand owner.” Governments also lose tax revenue in the counterfeit game. Less tangible or measurable consequences of counterfeiting appear in the form of consumer dissatisfaction with the inferior quality of counterfeit goods, which are passed off as the real thing.
In our “branded” society, where Nike, Ralph Lauren, and Reebok are not just manufacturers' names but image and status symbols, it is essential to ensure you're getting (and paying for) the real thing.
Counterfeit products also can be harmful: counterfeit or imitation airplane or automotive parts, baby formulae, and pharmaceuticals can create significant threats to consumer safety.
Some solutions to such security issues have existed for many years, but new technologies in the converting industries have emerged — giving us RFID, holograms, security papers and inks, and tamper-evident labels.
The retail market long has been a user of anti-theft devices: Electronic Article Surveillance (EAS) has been a particularly strong performer. Used overtly on packaging and covertly in source tagging, EAS labels and tags commonly are used on apparel, drugs, gifts, hardware, sporting goods, and even books and magazines. Overt EAS labels are a warning to would-be thieves that security measures exist to thwart their efforts.
Anti-counterfeit measures can play a part at all levels of manufacturing and distribution. Holograms, which first came into play for documents and credit cards, now are being used in brand labeling. Because they are difficult to duplicate and are unique images, they provide manufacturer, retailer, and consumer alike with the peace of mind of authenticity.
Although its benefits are greater for inventory control, RFID also helps brand manufacturers retain control of their products throughout the distribution channel, reducing theft.
Documentation long has benefited from papers and labels enhanced with security features. Temperature-sensitive, light-sensitive, and moisture-sensitive inks and coatings have been used for security purposes for everything from name badges to time-temperature indicators. New developments in taggants and DNA fingerprinting will enhance the portfolio of options and will find new market opportunities in product authentication, tracking, warranty and liability issues, and even the positive identification of evidential material in law enforcement.
Creating tamper-proof products is often a challenge to product package designers.
With environmental pressure to avoid excess packaging, designers rely on converted products, such as frangible labels, to deliver tamper-proof benefits, rather than adding an extra layer of packaging material. Although food and pharmaceuticals remain the top products of concern, any product can be susceptible. Earlier this year, an instance of counterfeit shampoo was reported in Canada — the shampoo contained bacteria that could cause infection.
Converters looking for opportunities in security label and product authentication, however, have hurdles to jump. Regulation standards are somewhat nonexistent, although groups are forming to drive standardization. Additionally, many new covert devices require coordination with readers and software. New technologies also can require huge capital investments.
Although technology has become significantly more sophisticated, determined counterfeiters are not deterred easily. In the long run, no one device will prevent counterfeiting, and today many companies are looking at partnering and combining security technologies for enhanced security.
For more information on AWA Alexander Watson Associates AWAreness Reports contact AWA; awa-bv.com.
Market Focus: North America
“Labeling Markets: North American Sourcebook 2003” — to be published by AWA Alexander Watson Associates later this year — looks at the North American market from an industry perspective and reassesses the changing competitive and trading environment. Here are some preliminary findings from the report.
The North American market remains a significant consumer of labels of all formats, second only to Europe (see figure).
It's estimated North American consumption of labels in 2002 was approximately 8,100 million sq m. Pressure-sensitive is the dominant label technology, with an estimated demand in 2002 of 4,600 million sq m. Glue-applied technology comes in a poor second with an estimated usage of approximately 2,100 million sq m.
Across all label formats, the North American label market has not been buoyant. Overall growth in 2001-2002 was static, and the growth in individual technologies showed a dramatic slowdown from historical levels. Pressure-sensitive labels, which enjoyed double-digit growth throughout the 1990s, only grew at 2%-3% in 2001-2002. The glue-applied sector showed negligible growth in the same period, and even the fast-rising technologies such as in-mold slowed to growth rates of about 4% compared to the >8% rates reported in previous years.
In a global context, growth in North America has been the lowest for all geographical regions. European demand has been buoyed by the increased use of labels in eastern European markets, with total European pressure-sensitive consumption at around 5% ahead of regional economic growth. Latin America and Asia also are showing higher demand potential because of low per capita consumption of label materials and the increasing demand for labeled consumer products.
Paper Rules, But Film Growing Fast
Paper is the major label material used in North America, with an estimated 80%-85% of volume by weight, and is used in a variety of grades in all label formats with the exception of shrink sleeving.
In addition to standard paper grades, other papers used in labeling applications include more than 500 million sq m of metallized papers — the vast majority of which are for wet glue labels — and paper laminate structures using aluminum foil and a range of plastic films.
The popularity of “no-label look” transparent film labels has led to higher-than-average growth rates in pressure-sensitive and in-mold applications, particularly for personal care products and beverages. There is particularly rapid growth in polypropylene (PP) film labels, where more than 50% of the films used for in-mold labels are oriented PP — the majority cavitated PP grades.
The challenges facing the North American label market are many. The slowdown in growth has further pressurized margins and profitability in all product groups. While consolidation is occurring throughout the value chain — most significantly at the extreme ends of the chain, in material supply and end use, with market dynamics dictated by the power of the end-user purchasers — the platform of label printers remains more fragmented. This remains an issue in terms of realizing improved margins, profitability, and longer-term opportunity despite the recent acquisitions and mergers in this sector.
For more information on “Labeling Markets: North American Sourcebook 2003” contact AWA Alexander Watson Associates; awa-bv.com.