Innovation in smart Packaging

SMART PACKAGING CASE STUDY ML00001-068/Published 08/2011

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MarketLine Case Study

Smart Packaging Case Study How packaging can communicate with the consumer in new ways



Overview Catalyst

A number of interesting opportunities are emerging in packaging that provides properties well beyond the basic requirement of containing and protecting the product. This case study analyzes the key drivers and inhibitors affecting the adoption of smart packaging programs and assesses future prospects for growth. It explores the notion that smart packaging initiatives are unlikely to achieve widespread success unless they are able to offer real consumer benefits using sustainable packaging solutions.

Summary This case study identifies the prospects for smart packaging in consumer packaged goods (CPG) markets. It outlines the key factors that impact on demand and assesses the extent to which smart packaging solutions are likely to be adopted in future, given consumer concerns over excessive packaging. Important contextual factors include the following:

• A number of inter-related factors drive demand for smart packaging – Concerns over safety and reducing wastage are important drivers of smart packaging within the food sector, while technological advances are enabling packaging to play a key role in facilitating greater consumer interaction with the brand.

• Consumer suspicion and cost factors inhibit acceptance – Consumer concerns over unnecessary packaging and the potential invasion of privacy are likely to limit demand for smart packaging, while additional costs represent both a consumer and manufacturing restraint.

• Smart packaging can improve consumer choice when purchasing fresh foods – Freshness is of paramount significance to consumers. However, packaging's role in protecting and preserving fresh food is often undervalued, and smart packaging techniques that offer an extended shelf-life are regularly viewed with suspicion.

• Smart packaging offers convenient solutions for on-the-go consumption – Although smart packaging solutions have had a measure of success in the advancement of self-heating/cooling products, these are likely to remain specialist applications rather than mainstream products.

• Smart packaging can enhance brand communication – The rapid rise in smartphone ownership and consumer desire for new experiences presents an opportunity for CPG companies to interact with customers in new ways through such applications as Quick Response (QR) codes and two-dimensional barcodes.

• Consumers can extend sensory brand experiences through smart packaging – Thermo-chromic inks have been used to offer new consumer benefits for brands, such as Coors Lite, and have been adopted for other drinks such as cider. However, other advanced ink techniques and technologies such as odor/flavor encapsulation remain mainly at the development stage.



• Concerns over food safety and wastage are growing – Health scares and the globalization of the food supply chain have increased the spotlight on the role that packaging plays in assuring food safety. Concerns over unnecessary food wastage and ambiguous labels have encouraged a number of smart packaging developments using sensors to track food conditions through the supply chain. However, unless such technology can be provided at little or no additional cost, it is unlikely to replace current labeling systems.

• Smarter use of traditional packaging can reap benefits – Consumers can also reduce wastage through the more effective use of traditional packaging and storage of fresh fruit, vegetables, and salads.

• Technological developments are encouraging, but hurdles remain – Smart packaging is constantly addressing new challenges, but full commercialization is restrained by the twin issues of affordability and integration into current manufacturing techniques. Radio-frequency identification (RFID) technology has the potential to offer intelligent consumer packaging holding a wealth of data within a digital format, while technologies such as nanotechnology, bioactive polymers, and printed electronics offer longer-term potential.



TABLE OF CONTENTS Overview ..................................................................................................................................................................................2

Catalyst .................................................................................................................................................................................2

Summary ..............................................................................................................................................................................2

Table of Contents .....................................................................................................................................................................4

Table of Figures .......................................................................................................................................................................6

Analysis ....................................................................................................................................................................................7

Introduction ...........................................................................................................................................................................7

The adoption of smart packaging techniques depends on a range of factors ....................................................................7

Smart packaging covers a number of functionalities .......................................................................................................9

Smart packaging provides consumers with greater choice when purchasing fresh foods .............................................. 10

Freshness matters to consumers .................................................................................................................................. 10

Packaging continues to be viewed with suspicion by consumers ................................................................................ 12

ripeSense labels improve consumers' choice of fruit .................................................................................................... 12

Del Monte's "Sealed for Freshness" bananas encounter widespread criticism ........................................................... 12

Consumer demand for convenience opens the door for smart solutions ......................................................................... 14

Convenience is becoming more important in emerging markets ................................................................................. 15

Self-heating systems are yet to reach mainstream markets ......................................................................................... 17

Susceptor wraps help food to brown and crisp in the microwave ................................................................................ 19

Smart packaging can enhance brand communication ..................................................................................................... 20

Smartphones enable marketers to interact with consumers ......................................................................................... 22

QR codes open new routes to target specific consumer groups .................................................................................. 22

Smart packaging provides easy access to information for discerning shoppers ......................................................... 24

The future success of QR codes depends on careful choice and appropriate guidance ............................................. 25

Smart packaging needs to work in tune with consumer ethics and sustainability trends ................................................ 26

Despite widespread consumer perceptions that grocery products are over-packed, packaging remains a secondary factor .............................................................................................................................................................................. 26

Packaging is a secondary concern for most consumers with a significant minority giving it greater priority, especially in alcohol ........................................................................................................................................................................ 28

Scavenging technology improves the shelf-life of wine in PET bottles ........................................................................ 30

Smart packaging can enhance sensory experiences for consumers ............................................................................... 32

Smart inks change color to denote ideal drinking temperature .................................................................................... 33

Changing ink colors help to promote cider as a refreshing summer drink ................................................................... 34



Summer cocktail chocolates keep cool in thermal packaging ...................................................................................... 35

Thermo-chromic inks are not restricted to alcoholic beverages ................................................................................... 36

New printing techniques enhance stand-out appeal in pubs and bars ......................................................................... 37

Demand for visual on-pack indicators to reduce wastage and increase food safety is growing ..................................... 40

Food safety concerns increase focus on smart packaging ........................................................................................... 40

Food safety legislation moving up the agenda in the US ............................................................................................. 41

Food wastage has come under intense criticism in recent years from social, political, and environmental quarters . 42

Labeling confusion contributes to unnecessary wastage ............................................................................................. 42

A number of smart packaging projects await full-scale commercialization .................................................................. 43

Visual indicators provide a positive sustainability message and align with the scratch cooking tendency ................. 45

Smarter use of traditional packaging can improve the life of produce and compete against smart packaging ........... 47

Technological developments will continue to encourage smart packaging but hurdles must still be overcome ............. 48

Developments in RFID present both opportunities and threats for consumers............................................................ 48

Nanotechnology offers exciting opportunities ............................................................................................................... 50

Bioactive polymers can enhance food content ............................................................................................................. 50

Interest in printed electronic and e-packaging is growing ............................................................................................. 50

Conclusions and implications ............................................................................................................................................ 51

Appendix ............................................................................................................................................................................... 52

Ask the analyst .................................................................................................................................................................. 52

About MarketLine .............................................................................................................................................................. 52

Disclaimer .......................................................................................................................................................................... 52



TABLE OF FIGURES Figure 1: It is important to understand the drivers and inhibitors of smart packaging from both the consumer and industry standpoint .................................................................................................................................................................................8

Figure 2: Smart packaging involves a range of inter-related functionalities ...........................................................................9

Figure 3: Freshness is a key influence on grocery demand across all countries ................................................................ 11

Figure 4: While smart packaging offers benefits to consumers, it also runs the risk of criticism on environmental grounds .............................................................................................................................................................................................. 13

Figure 5: Convenience is more likely to be perceived as a favorable consumer benefit in emerging markets .................. 16

Figure 6: Convenience is more likely to be perceived as a favorable consumer benefit in emerging markets .................. 17

Figure 7: Coca-Cola's Sprite Super Chilled created ice inside the bottle ............................................................................ 19

Figure 8: Microwave susceptor packaging provides a crispy finish upon cooking .............................................................. 20

Figure 9: Owning gadgets and personal technology items is an accepted part of life in the West ..................................... 21

Figure 10: QR codes are beginning to be included on packaging to engage with target consumers ................................. 23

Figure 11: Lion Nathan's Cellar Key program and Middle Sister wines use QR codes to provide extra information for consumers ............................................................................................................................................................................. 25

Figure 12: Western European economies tend to agree more that grocery products have too much packaging .............. 27

Figure 13: Despite consumer concerns over the environment, the amount of packaging has a relatively low impact on grocery product choice, especially in alcohol ....................................................................................................................... 29

Figure 14: Boisset Yellow Jersey and Wolf Blass Green Labels in PET bottles have a shelf-life of 12 months ................ 31

Figure 15: The Tucher Coolkeg taps provides a ready source of cool beer ........................................................................ 33

Figure 16: Ball Packaging's enhanced ink technology has developed from a simple white to blue change to multiple colors ..................................................................................................................................................................................... 34

Figure 17: Thermo-chromic inks help to promote cider as a summer drink for the Somersby and Press 81 brands ......... 35

Figure 18: Wiebold Confiserie's Summer Cocktail Chocolates are supplied in thermal packaging to protect them in hot temperatures ......................................................................................................................................................................... 36

Figure 19: Nescafé used thermo-chromic labels on coffee jar labels to tie in with a film launch ........................................ 37

Figure 20: New printing techniques enable beverages to stand out from the crowd ......................................................... 38

Figure 21: Heater Meals provide hot ready meals in minutes without the need for a stove or microwave ......................... 39

Figure 22: UWI Labels are triggered when the pack is opened to provide a ready indication of food age ......................... 44

Figure 23: Tough economic conditions are convincing many consumers to cook from scratch rather than consume ready meals or eat out .................................................................................................................................................................... 46



ANALYSIS Introduction

Smart packaging is a commonly used term for relatively new packaging features that go beyond simple changes of shape or color, graphics, barcodes, or better inactive protection. It comprises both active and intelligent packaging, which are distinct but related concepts.

• Active packaging involves the incorporation of an active system into a packaging film or container to maintain quality or extend shelf-life. It includes such techniques as oxygen and carbon dioxide scavenging, moisture, flavor, and odor absorbers.

• Intelligent packaging has the ability to detect and communicate information on the environmental conditions of the pack to the user. It can indicate whether the contents are warm enough or cold enough to maximize consumer enjoyment, and can record conditions through the supply chain, or facilitate greater interaction with the consumer through new communication media.

This case study explores the key drivers and inhibitors impacting on the adoption of smart packaging initiatives and assesses future prospects for growth. The report examines a variety of examples of active and intelligent packaging focusing mainly, but not exclusively, on the food and drinks sector. It attempts to determine the qualities and features that are most likely to succeed in today's marketplace.

The adoption of smart packaging techniques depends on a range of factors

Social and political concerns over food safety and food wastage, and restricting the use of preservatives and additives are encouraging food manufacturers and retailers to examine packaging solutions that provide greater control over shelf-life and improve traceability. At the same time, advances in mobile communication and ink technology ensure that brand owners are better equipped to engage and interact with consumers through their packaging. Retailers and manufacturers are also looking to adapt technologies originally developed for operational control, such as RFID, for use on consumer packaging in order to improve monitoring and traceability.

A number of factors impact on demand for smart packaging, including consumer trends, environmental awareness, technological developments, as well as the demands of retailers and CPG manufacturers. These are summarized in Figure 1 below.



Figure 1: It is important to understand the drivers and inhibitors of smart packaging from both the consumer and industry standpoint

• Consumer concern over food safety and traceability.• Demand for natural products with minimal preservatives and additives• Interest in products offering greater convenience• Greater consumer demand for information about their CPG• Concern over the amount of food waste is leading manufacturers to examine improvements in packaging •Increased ownership of smartphones and growth in social media are enabling new forms of communication•Greater demand for products offering enhanced shelf-life and/or improved quality will be major driver in sector growth

• CPG companies are looking for new ways to communicate with consumers on-pack •Developments in printing techniques and availability of smaller cheaper components enabling new processes•Lower costs for the technology

• Potential difficulties in recycling smart packaging• Possible development of a “hyper-sensitive” consumer prone to discard food if new color coded packaging indicates the food is no longer at its freshest • Potential privacy concerns with location aware smartphone technology revealing the actual location of consumers•Difficulty in promoting new packaging formats when consumer sentiment focus in western markets market is still on value

• Applicability of incorporating new technology into large scale production runs• Lack of industry willingness to incorporate smart applications when the industry dialogue on packaging is to cut costs

Consumer

Industry

Drivers of Smart Packaging

Inhibitors of Smart Packaging

SOURCE: MARKETLINE M A R K E T L I N E

While such factors are likely to drive demand for smart packaging, other trends serve to act as barriers to its adoption:

• Increased awareness of the environment and sustainability issues is leading consumers to examine packaging with an increasingly critical eye. As a result, solutions that appear to require unnecessary layers of extra packaging are likely to meet strong resistance.

• Although consumers increasingly recognize the benefits to be gained through greater connectivity and interaction via mobile technology, they remain suspicious that such technology also has the potential to threaten their privacy.

• Consumer suspicion also acts as a potential restraint to smart packaging usage within the food sector, particularly with respect to such concepts as aroma- and flavor-enhanced packs.

• Cost, whether viewed from the side of the consumer or the manufacturer, is a further restriction. As an uncertain economic climate and rising food and energy costs continue to squeeze consumer incomes, smart packaging initiatives that involve added cost will continue to meet consumer resistance unless significant benefits can be realized, or unless manufacturers can entice consumers to pay a premium.



• CPG manufacturers face a significant challenge in integrating smart packaging techniques into high volume production lines with minimal loss of efficiency and increase in cost.

Smart packaging covers a number of functionalities "Smartness" in packaging is a broad term that covers a range of functionalities, depending on the product being packaged. Some of these functions are mutually exclusive, while others work together to provide consumer benefits. For example, the scavenging function involves the collection and removal of unwanted gases or odors from a pack, but smart packaging techniques can also be used to release additional aromas into food to enhance freshness and flavor. On the other hand, sensors that identify changes to temperature and humidity can only provide consumer benefits if those changes are communicated effectively.

Smart packaging can also be used to communicate and/or interact with consumers through the use of technologies such as QR codes and two-dimensional barcodes, but can also have the ability to sense changes in the condition of the pack's contents and its environment, and transmit those changes through such media as smart labeling that utilizes color changes.

Figure 2: Smart packaging involves a range of inter-related functionalities

Applications

Sensing

Releasing

Scavenging

MaskingModifying

Communicating

Interacting




Smart packaging provides consumers with greater choice when purchasing fresh foods

Packaging already plays a significant role in protecting and preserving food and drink to ensure freshness. Smart packaging can extend this functionality to provide further benefits that improve consumer choice. However, in order to minimize the degree of conflict with consumer suspicions surrounding over-packaging, such moves should be approached with caution.

Freshness matters to consumers Consumers have undoubtedly become more interested in the idea of positive nutrition and the health benefits that arise from consuming fresh foods. Research clearly shows that freshness is paramount for consumers and is reflected both in terms of the types of products purchased and in shopper behavior.

The Datamonitor consumer survey of 2010 found that 77% of consumers across 20 countries felt that the claim of freshness was likely to provide a more favorable impression of a grocery product.

The importance of freshness to consumers is manifested in a number of ways:

• In the US and certain European countries such as Germany and the UK, which have a strong tradition in consuming processed foods, fresh foods are regarded as an important choice for dietary and health reasons.

• Freshness has positive associations with natural, unadulterated foods. This is particularly important in Asia Pacific regions where product safety scares have been associated with processed foods, such as the melamine milk scare in China.

• Freshness remains an integral part of the Asian diet and something on which consumers will not compromise. Although Western influences are beginning to have an effect, the region retains a strong preference and tradition for locally produced and purchased food.

• Freshness also assumes greater significance in those countries with a strong tradition in the production and growth of fresh produce, notably in South Africa, Spain, and Italy.

• In Russia and Brazil, the strong preference for freshness is related to an underdeveloped retail sector.



Figure 3: Freshness is a key influence on grocery demand across all countries

If you saw the following information or claim about a grocery product, what influence do you think it would have?

Fresh (% of consumers)




Packaging continues to be viewed with suspicion by consumers While packaging plays an important role in protecting and preserving fresh food, there are signs that this function is not fully appreciated by consumers. Datamonitor research in 2010 found that 47% of consumers across 20 countries agreed or strongly agreed with the statement "food and beverage products have too much packaging."

France and the UK had the most negative views toward the level of packaging, with 64% and 59% of respondents, respectively, agreeing with the above statement. In contrast, fewer than 35% of consumers in Russia and Japan believed that food and beverage packs had too much packaging.

While variations between countries are interesting, the overall global findings are of most significance for the future prospects of smart packaging. Consumers are likely to continue to scrutinize the amount of packaging used for food and other grocery products. As such, smart packaging concepts that involve extra materials are likely to be viewed with suspicion unless they provide clear benefits that are easy to comprehend.

ripeSense labels improve consumers' choice of fruit ripeSense labels were developed to provide consumers with the opportunity to make more informed decisions when selecting fruit in the supermarket. Developed by Jenkins Group, the labels enable consumers to select fruit produce at the desired level of ripeness without resorting to handling the product or relying on visual inspection alone. The ripeSense sensor changes color by reacting to the aroma released by fruit as it ripens. The sensor is initially red and graduates to orange and finally yellow. By matching the color of the sensor with their eating preferences, customers can accurately choose fruit as ripe as they like it.

ripeSense labels were developed in New Zealand and were named one of Time Magazine's 30 greatest innovations of 2004. However, despite initial positive consumer feedback, the product struggled to achieve retailer backing. An initial trial was carried out by Tesco in 2009, but retailers were unwilling to accept a price premium over traditional labels, highlighting the difficulty in encouraging consumers to pay a premium without them knowing about it.

Del Monte's "Sealed for Freshness" bananas encounter widespread criticism In 2009, Del Monte introduced its "Sealed for Freshness" bananas in the US. The products promoted as “Natural Energy Snacks on the Go” and sold as single finger units. They were individually wrapped in plastic to form part of a new range of vending machine fruit and vegetable packs to be sold in non-conventional channels such as petrol stations, convenience stores, leisure centers, and gyms.

When launching the product into the UK in 2011, however, Del Monte was met by a media storm, with national newspapers and green lobbyists posting a number of critical comments. The criticisms centered on unnecessary packaging, with the suggestion that the company was simply looking to charge a higher price for a product with an unnecessary layer of wrapping when the banana itself had successfully evolved its own biodegradable solution.

The Del Monte product featured "Controlled Ripening Technology," which extends the shelf-life of the banana for up to six days, and is also claimed to enhance sweetness and prevent damage in transit. The banana is placed in the plastic bag when green, and the bag slows respiration by keeping out moisture and oxygen, enabling the banana to ripen more slowly than if it had been left in the open air. Despite Del Monte's defense that the product provided carbon footprint savings by reducing the frequency of deliveries and the amount of waste going to landfill, and that the packaging was also recyclable, consumers remained largely unconvinced.



Figure 4: While smart packaging offers benefits to consumers, it also runs the risk of criticism on environmental grounds

ripeSense® labels enable consumers to choose fruit at

required ripeness without handling

Del Monte’s wrapped bananas encountered

criticism in the UK


The ripeSense and Del Monte examples demonstrate the fine line that smart packaging needs to tread to provide enhanced consumer benefits. While there is undoubtedly a key role for packaging to play in assuring freshness and extending shelf-life, the way this is communicated to the user is crucial. Consumers generally regard packaging as a villain with respect to sustainability issues, and remain suspicious of perceived over-packaging.

Smart packaging solutions that involve extra layers of packaging are always liable to come under scrutiny, even if consumer benefits can be demonstrated:

"Retailers and manufacturers need to cut back on packaging, not create more."

Gary Porter, of the Environment Board of the UK Local Government Association



Consumer demand for convenience opens the door for smart solutions

The convenience mega-trend reflects the everyday time pressures, stresses, and work-life balance problems that modern consumers experience. Societal shifts such as irregular working hours, longer times spent in transit, and fragmented mealtimes are driving consumers to feel more time-pressured and stressed. As a consequence, consumers are increasingly seeking products that enable them to multi-task and maximize their leisure time. This in turn drives on-the-go food and drink occasions, which are accounting for an increasing number of overall eating and drinking occasions.

More fluid lifestyle patterns are disrupting the natural rhythm of the day and are continuing to drive on-the-go food and drink consumption:

• A shift from blue-collar manual labor to white-collar jobs is encouraging a switch from the canteen lunch to eating at the desk.

• The daily commute has become an important part of many consumers' lives. While improvements in transport links have shortened journey times, they have also encouraged travelers to begin commuting from longer distances, increasing demand for on-the-go breakfast foods and snacks.

• The increased popularity of leisure pursuits such as going to the gym is increasing the quantity and variety of food and drink outside the home.

Advances in smart packaging techniques have facilitated the development of a number of niche products designed to provide new solutions for on-the-go consumption that meet consumers' emerging needs.



Convenience is becoming more important in emerging markets According to Datamonitor research in 2010, more than half of all consumers surveyed believed that convenience claims provided a more favorable perception of a grocery product. It is interesting to note that convenience ranks as more important in emerging nations such Brazil, China, India, and South Korea, than in more developed economies.

In part, this reflects the fact that convenience grocery products have been a feature of Western consumer markets for a much longer period. As a result, consumers have begun to accept such features as the norm rather than additional benefits. However, it also reflects the following broader consumer trends associated with convenience:

• Brazilians are more likely to miss dinner – The concept of dinner as a regular family event is far less significant in Brazil, with consumers taking a much more fragmented approach than elsewhere.

• Urban economic development in China is fueling demand for convenience products – In 2009, the Ministry of Commerce introduced the breakfast scheme to improve quality standards and hygiene standards within the breakfast vending sector, to meet the needs of the rapidly growing city working population.

• Indian consumers are more likely to miss meals throughout the day – The booming outsourcing industry, including call centers and IT services, has served to disrupt the routine and change the lifestyle and work patterns of many Indians living in urban areas. This is causing meals to be missed or eating times altered to suit work schedules, often with lifestyles and work routines re-aligned to synchronize with other time zones. It is also prompting more Indian consumers to snack or eat lighter meals outside of regular meal times.



Figure 5: Convenience is more likely to be perceived as a favorable consumer benefit in emerging markets

If you saw the following information or claim about a grocery product, what influence do you think it would have?

Convenient (% of consumers)




Self-heating systems are yet to reach mainstream markets Convenience manifests itself in many ways in packaging, such as microwaveable packaging and self-heating technology. Self-heating has achieved some consumer acceptance, although the main focus has been in specialist areas rather than mainstream sectors. The main successes have been seen in such areas as ready-to-drink (RTD) hot drinks where consumers are willing to accept extra costs in return for greater convenience.

Self-heating cans consist of dual chambers. The inner chamber holds the food or drink, while the outer chamber contains chemicals that react when combined to generate heat. The reaction is triggered by pulling a ring on the can to break the barrier separating the chemicals in the outer chamber. It generally takes around 15 minutes for the energy created by the reaction to be absorbed by the food or drink.

Spanish company Fast Drinks initially introduced the 2GO self-heating can concept in 2005. The company's initial product was a coffee beverage, but a number of new products and range extensions have been developed, including soup, hotchocolate, and lemon tea. The 2GO range is sold at petrol stations in Spain, and through a range of trade agreements in France, the UK, Scandinavia, Japan, and the US.

Hot-Can Sdn Bhd was set up in Malaysia in 2002 to develop and manufacture self-heating smart packaging for the global beverage market. The Hot-Can range features four main products: Hot Choc, Caffe Latte, Hot Tea, and Hot Mocha.

Figure 6: Convenience is more likely to be perceived as a favorable consumer benefit in emerging markets




Self-heating cans offer benefits for specialist uses such as camping and hiking, and have begun to appear in the travel market. However, broader market acceptance is largely dependent upon ensuring that the products are priced more competitively against traditional drinks, and that technical problems, such as inconsistency in thoroughly heating the contents, are addressed.

Progress has been slow in self-cooled drinks

The challenge of providing consumers with access to a cold refreshing drink on a hot day without the need for refrigeration has led a number of companies to investigate self-cooling drinks containers, albeit with limited success to date.

• Instant Cool Cans prove costly – In 2000, Crown Holdings pioneered the development of a self-chilling beverage can with US-owned Tempra Technologies. Instant Cool Can (ICCan) technology used the latent heat of evaporating water to produce the cooling effect which was able to cool a 300ml beverage by 16.7 degrees centigrade in three minutes. The water is bound in a gel layer coating in a separate container within the beverage can, and is in close thermal contact with the beverage. The consumer twists the base of the can to open a valve, exposing the water to a desiccant held in a separate evacuated external chamber. This initiates evaporation of the water at room temperature. The product was tested by the Miller Brewing company in 2007 but failed to progress to market, largely on cost grounds.

• High deposits and logistical problems hit Foster's CoolKeg trial – The Foster's CoolKeg was test-marketed in the UK through off-trade retailers Thresher and Majestic in the Brighton area in 2003–04, but technical and logistical issues caused a halt. Although the initial price of £49.95 for a 35-pint keg was a competitive £1.43 per pint, consumers were required to pay an additional refundable deposit of £30 for each keg. The significant up-front charge together with difficulties associated with manual handling and the tracking and retrieving of empty kegs forced the abandonment of the project.

• Sprite Super Chilled encountered technical and environmental problems – In 2007, Coca-Cola tested new technology to launch a “super cold” variant of Sprite. The product incorporated "revolutionary new packaging" that would create ice inside the bottle when opened. The drink was available from specially-built vending machines that kept the drink at a certain temperature. Once purchased, the consumer twisted the bottle to trigger a mechanism inside that created ice made from the drink, without diluting the contents. The product was withdrawn after the trial found the refrigeration system to be less cost-effective and less environmentally friendly than traditional systems.



Figure 7: Coca-Cola's Sprite Super Chilled created ice inside the bottle


Susceptor wraps help food to brown and crisp in the microwave Although microwave ovens provide a convenient quick method for defrosting, re-heating, or cooking foods from scratch, they have a disadvantage in that they are unable to brown, crisp, or grill products. Several products have been launched with packaging that addresses the problem through the use of susceptor wraps.

These are generally based on metalized polyester where a thin layer of aluminum is deposited on the film to give it a grayish appearance. The aluminum absorbs part of the microwave energy creating currents in the metal. Since the thickness is low and the resulting resistivity is high, the currents are limited so they do not cause any arcing or sparking, as would normally be observed with metallic articles in the microwave. The currents are, however, high enough to heat the susceptor to a temperature of about 120 degrees centigrade, enabling the food to become crispy on the outside.

In 2010, Kepak Convenience Foods launched Ugo's Deli Café Hot and Crispy Panini, featuring an inner susceptor wrap based on metalized single-faced corrugated paper. The inner liner of the pack provides a crisp finish while the outer fluting offers heat insulation for easier handling.



Figure 8: Microwave susceptor packaging provides a crispy finish upon cooking


Smart packaging offers a range of innovative techniques for consumers looking for convenient solutions eating away from home or looking for a quick and tasty microwave snack at home. However, although such developments are interesting, they are unlikely to become mainstream product offerings and are likely to continue to satisfy small specialist areas of the market.

Smart packaging can enhance brand communication Technology is a fundamental enabler of the major trend toward greater connectivity. Consumers embrace technology that can improve their lives in some way. Often, this benefit will manifest itself in the form of making something easier or by making processes faster. Technology is also progressively improving connectivity, both in terms of connecting consumers to more forms of entertainment or to each other. Smart packaging has an important and growing role to play in enabling brand marketers to explore interesting new ways to communicate with their customers.

The accessibility and convenience of contemporary connective technology is highly appealing for time-poor, gadget-conscious consumers globally. The internet provides a wealth of information at their fingertips, while accessories such as smartphones offer multiple features in a portable device that further facilitate the on-the-go lifestyles of convenience-oriented consumers.



Datamonitor research identifies quite a spread of opinion over the importance of personal technology within consumers' lives. At a global level, 41% of consumers agreed that owning gadgets or personal technology items was important to them, but the issue was far more significant to consumers in emerging nations and in the Middle East than in Western economies. This partly reflects the fact that Western consumers have had access to such equipment for a longer period, but also acknowledges that many of the greatest developments in emerging mobile technology are being witnessed in the Middle East. There is a huge demand for online services such as high definition video, interactive gaming, internet TV, and other high-bandwidth applications that can only be realized on a high-capacity network, and the Middle East region is leading in the developments of 4G networks (Your Communication News, May 2011). In addition, brand consumption tends to hold a higher level of emotional meaning in the emerging markets, and as a result, ownership of the latest brands is more important.

In contrast, the rapid growth and economic development in such markets as Brazil, China, and India is creating a new breed of consumers with a higher level of disposable income. Access to such technological items is viewed as an important indicator of the increasingly influential role that these regions and their consumers have to play in the global economy.

Figure 9: Owning gadgets and personal technology items is an accepted part of life in the West

How important are the following to you?

Owning gadgets or personal technology items that are up-to-date (% of consumers)




Smartphones enable marketers to interact with consumers According to the International Telecommunications Union, global mobile phone subscriptions had reached 5.3 billion by the end of 2010, up from 4.6 billion in 2009. This equates to 77% of the total population, while 90% of the global population now lives in a place with access to a mobile network. Growth is now being driven by the emerging markets, with China and India together adding 300 million new mobile subscriptions in 2010, more than the total number of subscribers in the US. Smartphones are by far the most dynamic sector of the market and are becoming more prevalent as unit prices fall and as consumers trade up. This is good news for marketers as smartphone users tend to use their phone more than non-smartphone users, and are a great way for marketers to interact directly with consumers via mobile web browsing, mobile apps, and mobile social media. According to a publication released by mobile marketing company Comscore, the UK led all reportable markets, with smartphone penetration at 44% of mobile users, followed by Spain (40%) and Italy (38%). Canada's smartphone penetration reached 33% of all mobile users in March 2011, slightly higher than that of the US at 32% (Comscore, June 2011).

The multitude of features available on smartphones means that they are a mainstay of contemporary culture, providing accessible, convenient connective technology for time-poor consumers. At the same time, marketers can harness smartphone technology to provide consumers with access to new and exciting experiences and opportunities. The age of YouTube, and reality TV has created an appetite for originality and a climate of content discovery. While smartphones offer the technology to facilitate such interaction, smart packaging offers a readily available media through which to engage the consumer.

QR codes open new routes to target specific consumer groups QR codes represent one recent development that is assuming greater importance in the consumer field. The technology is not particularly new, having been introduced in the Japanese automobile components sector in the 1990s. However, it has recently gained greater traction as CPG marketers look for new ways to interact with consumers. The codes are two-dimensional matrix barcodes that can be read by dedicated readers or camera phones. They consist of black modules arranged in a square pattern on a white background, and enable users to link directly to dedicated websites when on the move.

The majority of consumer applications for QR codes to date have been in press and poster advertising, and direct mail. There have also been more outlandish uses on buildings and clothing and the codes are now beginning to find their way onto packaging.

Coca-Cola QR codes enable greater interaction with consumers In 2011, Coca-Cola added a QR code to its can packs in Germany. This formed part of its "Coke Sound Up" campaign, which included access to exclusive music shows in German cities. Drawing on the experience of social-media-inspired spontaneous events, the company was looking to attract the attention of younger consumers by providing a new form of interaction. Coca-Cola worked with packaging suppliers Ball Packaging Europe to include the QR code on its 25cl sleek can. Upon scanning the code with a smartphone camera, users were taken straight to an online Coke Music Portal, which provided details of exclusive live music events, revealing them at the very last minute.



"The cans appeal to consumers through multiple senses at the same time – taste, hearing, and sight – for an interactive multimedia fresh-up."

Gerlof Toenhake, director of marketing at Ball Packaging Europe

Sun-Maid Raisins ties in with movie launch to attract families Sun-Maid Raisins used QR codes for a local targeted promotion to tie in with the launch of Dreamworks' animated movie Kung Fu Panda 2 in May 2011. The company included the code on its canisters and six-packs of raisins to provide consumers with a link to a mobile website where they could enter a contest to win a VIP trip for four to Zoo Atlanta, as well as entering a sweepstake for related free gifts. The QR code was also included on Sun-Maid's Facebook page to extend coverage.

Targeting such a tight demographic using QR technology could perhaps be seen as something of a gamble, but the company was hopeful that simplicity would suffice:

"By keeping the promotion entry simply and easily accessible by mobile devices, we anticipate a lot of entries and overall site activity."

Rick Bruno, VP of brand management, Sun-Maid, speaking with Marketing Daily, May 2011

Figure 10: QR codes are beginning to be included on packaging to engage with target consumers

Coca –Cola introduced QR codes on to 25cl cans in

Germany to promote its Coke Sound Up campaign

Sun-Maid Raisins 6 packs incorporated a QR code to link to a website for a promotion

arranged with the launch of the movie KungFu Panda 2




Smart packaging provides easy access to information for discerning shoppers Although packaging has a key role to play in attracting shoppers as they progress through the store, there is evidence that consumers are also seeking access to more information about products at the shelf edge. Concerns over healthy eating have ensured that consumers are seeking more guidance on nutrition and dietary information, and interest in such areas as provenance and natural ingredients also increase demand for data. At the same time, non-food sectors such as wine and garden products are relatively "information hungry," with consumers interested in accessing data to assist their overall consumption experience.

“Wine is high-spend, information-rich, and heavy wine is suited to an online environment.”

Dan Jago, category director of beers, wines and spirits, LIWF

Such demand for information presents a challenge for CPG manufacturers to provide effective pack designs that are able to balance the need for on-shelf appeal with the requirement to include sufficient product information. This presents an opportunity for smart packaging to provide consumers with ready access to further information via a mobile optimized web-based platform. The breadth and depth of information available online would be impossible to provide on packaging or point of sale, and can assist consumers in making a more informed product choice.

QR codes enable users to access a wealth of information on wine In 2010, US fine wine business Lion Nathan Wine Group launched a new QR-code-based proprietary marketing program called Cellar Key. The Cellar Key program includes five wine brands (Argyle, St. Hallett, Wither Hills, Argento, and Petaluma) and more than 20 wines, and consists of a variety of marketing material for promoting the wines geared toward the use of QR codes.

On the Cellar Key website, a wine retailer can go to the Trade and Media page to download and print files of the QR code image, the bottle image, the label image, the brand logo, a bumper card, and a shelf talker card. Upon scanning the QR code label in the store, the consumer gains access to a mobile website containing information on wine color, wine aromas, wine flavors, and wine production statistics, together with other support material such as videos and suggested food pairings for individual wines.

The Lion Nathan program demonstrates the potential for QR codes to provide access to a variety of information for both the retailer and end consumer. The depth of data provided is highly suited to a sector such as wine, but content can be adapted for other industries.

QR codes help to promote Canopy Management Wines' individual brands Californian wine suppliers Canopy Management Wine, which markets the Middle Sister range of wines, added a QR code to the back label of its latest wine, Sweet and Sassy Moscato. The company targets female drinkers by creating a unique name and personality behind each of its wine brands. Consumers can access a factsheet containing detailed information including technical data on grape content and complementary food suggestions. The company's strategy is to make wines with an original story to tell. It actively encourages interaction with customers on social network sites. The inclusion of QR codes on the packaging is a natural extension to this approach.



Figure 11: Lion Nathan's Cellar Key program and Middle Sister wines use QR codes to provide extra information for consumers


Barcodes can provide shoppers with extra information via their phone Non-food superstores in the US are now providing customers with the facility to obtain immediate information to assist in their buying decisions. By adding barcodes to certain products, the stores are able to provide customers with on-the-spot access to product reviews and ratings, how-to guides, and videos to help consumers choose.

Retailers such as Home Depot and Lowe’s have added barcodes on plants and garden furniture to enable customers with smartphone scanners to check out the appropriate growing conditions, or provide links to supporting videos and commercials. The strategy recognizes that consumers often undertake a significant amount of research before purchasing large ticket items and providing ready access to supporting data at the point of purchase, which can provide significant benefits for consumers.

The future success of QR codes depends on careful choice and appropriate guidance

On the face of it, adding QR codes on packaging offers a number of advantages to CPG manufacturers:

• They are an attractive means of communicating to specific consumer groups through targeted promotions or other offers.

• They provide an opportunity to enhance brand experience through facilitating greater interaction and strengthening emotional and intellectual connections with the consumer.



• They offer an efficient means of providing deeper experiences to consumers through providing additional product information such as nutritional data, user instructions, and recipe details to interested consumers without taking up precious space on the pack.

• They are readily able to be tracked and can provide marketers with valuable, accurate data on geographical location and promotional take up.

Nevertheless, progress to date outside of Japan remains patchy. Indeed, some commentators have questioned whether QR codes will be seen as simply a passing fad and will quickly be overtaken by other technology such as near field communication (NFC), which may offer greater interface. According to Forrester Research conducted in early 2010, only 5% of total smartphone owners in the US had scanned a QR, but this was expected to change rapidly, with 25% of Android phone users reportedly trying them in the second quarter of 2010. One of the main constraints on usage was consumer ignorance, with even some younger technically savvy consumers being uncertain of their potential value.

Clearly, if CPG companies wish to get the most out of this potentially valuable communication tool, they need to provide more guidance on usage to ensure that the information/deals they provide offer real and tangible benefits to selected target markets. A simple link to the standard company website is unlikely to suffice. It is also essential that CPG manufacturers and retailers do not simply sit back and expect the consumer to do all of the work:

“A lot of marketers look at barcode technology as a silver bullet to engage customers. They are not giving enough information about what barcodes are, and not integrating the technology into their marketing strategies. If the user doesn’t have a worthwhile experience, then they aren’t going to scan codes, and the technology will die on the vine.”

Roger Marquis, two-dimensional barcode expert and blogger, quoted in New York Times, May 2011

Smart packaging needs to work in tune with consumer ethics and sustainability trends

This section examines the extent to which smart packaging developments are in tune with emerging consumer trends on ethics and the environment.

Citizens worldwide are placing increasing importance on preserving the environment and “doing the right thing” and have strong feelings about the level of urgency required for action. Globally, consumers have moved into a more reflective and concerned phase of consumption, while industry players have acknowledged that environmentalism is now a key battleground in the fight to win the hearts and minds of consumers. Ethicality has also emerged as a relevant topic. Consumers are no longer satisfied with how a product looks and works; they also want to be assured that it was manufactured in a healthy, safe, fair, and legal working environment.

Despite widespread consumer perceptions that grocery products are over-packed, packaging remains a secondary factor

Datamonitor has been tracking consumer attitudes to the amount of packaging used on grocery products for a number of years. Although concerns surrounding over-packaging are diminishing, more than 60% of consumers across 20 countries in 2010 continued to agree with the statement "grocery products today have too much packaging."



Figure 12: Western European economies tend to agree more that grocery products have too much packaging

To what extent do you agree or disagree with the following statements? Please record one answer on the rating scale.

Grocery products today have too much packaging (% of consumers)




The issue of over-packaging is of particular significance to some countries. In France and the UK, for example, more than 70% of consumers believe that grocery products have too much packaging, reflecting the food-oriented culture in France and the strong backlash against excessive packaging in the UK. However, the issue is of less significance in the UAE and Saudi Arabia, where freshness has already been identified as being vitally important. Similarly in Japan, packaging is a vitally important element of the product proposition. Packaging design is often regarded as more of a work of art and, what would be defined as excessive packaging in many Western markets, is regarded as the norm in Japan.

Manufacturers have made conscious efforts to reduce the environmental impact of packaging in recent years, but the research suggests much still needs to be done to convince consumers. Research also suggests that the packaging industry has some way to go in educating consumers about the broader merits of packaging functionality:

“Despite the important role it plays, packaging is, in the view of many consumers, a waste of resources, which ends up as an environmental burden. Such views arise because the functions that packaging has to perform are either unknown or not fully considered and appreciated by the consumer.”

Poças et al., British Food Journal, 2010

“The [packaging] industry has historically been in a reactive mode and hasn’t done enough to highlight the benefits of packaging and the complexity inherent in defining what sustainable packaging should be.”

PricewaterhouseCoopers' Sustainable packaging: threat or opportunity? report, 2010

Packaging is a secondary concern for most consumers with a significant minority giving it greater priority, especially in alcohol

However, such negative views over packaging should not be overplayed. Although consumers express concerns on over-packaging, such concerns are not necessarily translated into significant action. Consumer research for the Datamonitor green survey of 2010 found that a third of consumers of food, and household and personal care products believed that the amount of packaging has a low or very low influence on their choice of grocery product. This exceeded the proportion who agreed that packaging has a high or very high impact by around five percentage points. An even greater discrepancy was noted for alcoholic beverages, where 44% of consumers believed that the amount of packaging had a low or very low impact on product choice, compared to 21% of those who took the quantity of packaging into significant account. Hedonism is a key motivation behind the consumption of alcohol and, as such, the amount of packaging tends to have a much lower influence over choice of alcoholic beverage.



Figure 13: Despite consumer concerns over the environment, the amount of packaging has a relatively low impact on grocery product choice, especially in alcohol

of consumers across 15 markets report that

the amount of packaging has a low or very low amount of influence in choice of

packaged food products

34%of consumers across 15 markets report that the amount of packaging has a low or very low amount of influence in choice of household

cleaning/laundry products

35%

of consumers across 15 markets report that

the amount of packaging has a low or very low amount of influence in choice of personal care/beauty

products

34%of consumers across 15 markets report that the amount of packaging has a low or very low

amount of influence on choice of alcoholic

beverages

44%




Scavenging technology improves the shelf-life of wine in PET bottles Polyethylene terephthalate (PET) bottles are an ideal solution for certain drinking occasions where their lighter weight and shatterproof characteristics make them an attractive proposition for summer picnics, fairs, and festivals. Furthermore, the fact that PET is significantly lighter than glass provides potential consumer benefits on sustainability which, as Figure 13 notes, is lagging in alcohol. The main hurdle to overcome, however, is customer acceptance, and glass remains by far the most popular packaging type used for wine, as it tends to confer premium connotations. Although plastic wine bottles have been on the market for a number of years, early market entrants were not too successful. They were largely poorer quality wines supplied in non-standard sizes such as 25cl and 1.5l. There were also concerns over the shelf-life of the product, as diffusion of oxygen is known to occur through the use of plastic bottles.

With the lighter weight of PET bottles providing potential benefits in sustainability there was scope for plastic bottles to increase share, as long as the issue of shelf-life could be addressed.

Boisset Yellow Jersey used PET for high quality wine One of the first companies to address the problem was Boisset Wines, which launched Yellow Jersey French Wine in standard 75cl bottles in 2007. Using a high quality wine from the Pays d'Oc region, the company introduced oxygen scavenging technology developed by US PET bottle manufacturer Constar. Here, a layer of Oxbar scavenging material is incorporated into the center layer of the multi-layer packaging to absorb oxygen and reduce loss of carbon dioxide.

Wolf Blass Green Label provides environmental benefits and a longer shelf-life In 2009, Australian producers Wolf Blass introduced Green Label in a PET wine bottle, which was claimed to reduce greenhouse gas emissions by 29% compared with traditional glass bottles. Wolf Blass Green Label utilized Constar's next-generation scavenging technology, DiamondClear, which provided five times greater oxygen absorption capacity than competing technologies. Active monolayer materials absorb oxygen to restrict ingress into the bottle, and assist in removing oxygen from the head space, to ensure that the wine delivers the same quality, taste, and fresh fruit flavor within a best-before date of 12 months.

"Green Label is an ideal solution for a more sustainable alternative packaging choice presenting a lower greenhouse footprint. The packaging is in response to market demand and a clear consumer insight suggesting that 96% of consumers today claim they’d like brands to show them how they are helping climate change and the environment."

Oliver Horn, global brand director at Wolf Blass, in Packaging Gateway, July 2009



Figure 14: Boisset Yellow Jersey and Wolf Blass Green Labels in PET bottles have a shelf-life of 12 months




Smart packaging can enhance sensory experiences for consumers

This section discusses the extent to which smart packaging can satisfy consumers' growing interest in new experiences, as defined by the sensory mega-trend.

Consumers are looking to branch out from their normal routines and daily repertoires and are increasingly looking for novelty in their consumption behaviors. In part, such a desire for differentiation is to enable consumers to stand out from their peers. However, it also reflects a more inquisitive and experimental mindset where openness to unfamiliar ideas, cultures, and objects is becoming increasingly necessary in the so-called "global village."

Such trends offer greater opportunities for industry players to "think outside the box" and seek to tap into consumers’ appeal for novelty rather than play it safe and risk fading interest. Smart packaging is well placed to tap into this trend by elevating consumption experiences for consumers through providing extra sensory benefits.

Tucher Coolkeg offers cool beer at the press of a button

Self-cooling products were discussed in an earlier section focused around the role that smart packaging plays in providing greater convenience for consumers. While the majority of product developments floundered due to technical issues,

consumer interest was also limited. However, one of the more successful self-cooling products in recent years has been the Tucher Coolkeg from the German brewer Tucher Braue GmbH.

This is a self-cooling beer keg available in two varieties: Bright and Wheat Yeast Bright. Both products are supplied in 10 or 20 liter kegs that can be transformed to a refreshing drinking temperature within 45 minutes at the push of a button. The process requires no electricity and is claimed to retain the beer at a constant temperature for up to 12 hours, making the product ideal for events such as outdoor parties, barbecues, and picnics.

Although the Coolkeg offers some benefits in convenience, the main key to its success has been the ability to offer an enhanced consumption experience, in the form of ice cold beer for outdoor summer occasions. Datamonitor research identifies that two thirds of German consumers in 2010 preferred to drink beer when having a barbecue, and providing ready access to cold beer without refrigeration proved to be a highly attractive benefit.



Figure 15: The Tucher Coolkeg taps provides a ready source of cool beer

of drinkers in Germany prefer to drink beer when

having a barbecue

66%


Smart inks change color to denote ideal drinking temperature Although earlier entrants exist, such as Bawls Guaran Soda launched in 2006, the most successful example of a thermo-chromic ink product to date has been Molson Coors Brewing Company's Coors Light. The technology was first introduced on Coors Light bottles in 2007 and added to cans in 2009. The cans were manufactured by Ball Packaging Europe and were printed with temperature-sensitive ink, which enabled the Rocky Mountains logo to change color from white to blue upon reaching the ideal drinking temperature. Coors Light is synonymous with the cold beer occasion; Coors Light is prominent in the cold beer space and has become linked with consumer preferences for a cold beer. It uses its packaging,

which includes cold-activated thermo-chromic ink that changes color when the optimal drinking temperature is reached, to reinforce this association. Thermo-chromic ink technology can add value to the overall consumption experience. Although these developments can be perceived as gimmicky, alcohol drinking occasions are unquestionably the most appropriate setting for these technologies, as hedonism tends to be a key motivator.

While earlier technology was based on a single color change, Ball further developed the concept in 2011. The company introduced new inks with the ability to perform multiple color changes as the temperature decreases, with the move aimed at broadening the appeal to other drinks categories, such as energy drinks.



Figure 16: Ball Packaging's enhanced ink technology has developed from a simple white to blue change to multiple colors


Changing ink colors help to promote cider as a refreshing summer drink Thermo-chromic inks have also been introduced on cider brands by Carlsberg in Denmark and Aston Manor Brewery in the UK. Carlsberg's Somersby Apple Cider brand was launched in a limited edition can in Denmark in the summer months of 2010, in cans manufactured by Rexam. The 33cl aluminum promotional cans were supported by a marketing campaign focusing on outdoor events and cold elements that helped to activate the thermo-chromic ink. The target audience was young professional adults, who enjoy new experiences and experimenting, and the cider was sold in both the on- and off-trade in a wide range of outlets, from night clubs and cafes, to supermarkets and other retail outlets.

As consumption of cider in most markets is highly seasonal, the use of thermo-chromic ink helped to elevate its positioning as a summer beverage:

“Cider is a very refreshing product that is even more enjoyable when served ice cold. The thermo-chromic ink on these limited edition cans functions as a perfect indicator for the cider’s drinkability. It is a way for us to ensure that consumers enjoy ultimate refreshment in the hot summer months.”

Marc Larsen, marketing consultant for Carlsberg



In 2011, Aston Manor Brewery launched a new range of cider in the UK under the Press 81 brand name. The product is said to be the first cider to be packaged in aluminum bottles and also to feature three thermo-chromic rings on the front of the bottle which turn "steel blue" when the cider is cold enough to drink. The cider is available in apple and pear flavors, both of which are available in 473ml bottles, as well as four-count multi packs. The combination of stylish aluminum bottles and thermo-chromic ink fits perfectly with the company's plan to launch "the coolest bottled cider in the UK".

Figure 17: Thermo-chromic inks help to promote cider as a summer drink for the Somersby and Press 81 brands


Summer cocktail chocolates keep cool in thermal packaging One of the major problems with chocolate in the hot summer months is that the product can be adversely affected by the weather. Chocolates can become misshapen and lose color at temperatures above 27 degrees centigrade, losing consumer appeal and presenting retailers with extra problems and/or costs in ensuring effective storage and display.

In May 2011, German confectionery company Wiebold-Confiserie launched a range of summer cocktail chocolates in new packaging designed to improve shelf-life and withstand temperatures of up to 30 degrees centigrade. The chocolates were supplied in "thermo-packaging," which enclosed the chocolates to protect the contents and keep cool. The product was provided in four flavors: Carneval do Brasil Coco, Hawaii Fancy-Flip, Holla Men (cola and lime filling), and Smoothers (cherry and banana).



Figure 18: Wiebold Confiserie's Summer Cocktail Chocolates are supplied in thermal packaging to protect them in hot temperatures


Thermo-chromic inks are not restricted to alcoholic beverages Another interesting application of thermo-chromic ink was introduced by Pizza Hut on its delivered pizzas in the UK, which helped demonstrate the company's commitment to timely delivery. A label known as the "Hot Spot" was placed onto the front of all of Pizza Hut's pizza boxes for home delivery. If the label was no longer red when the pizza arrived at the door, the customer was entitled to a discount on the next Pizza Hut order. The Hot Spot helped to strongly differentiate Pizza Hut's brand from other home-delivered pizzas while ensuring customer satisfaction.

One of the more novel uses of thermo-chromic inks was adopted by Nestlé in 2003 for its Nescafé Gold Blend coffee. In a special tie-in with the launch of the film Love Actually, consumers were invited to hug the jar to make a thermo-chromic patch on the label change color and reveal a message.



Figure 19: Nescafé used thermo-chromic labels on coffee jar labels to tie in with a film launch


New printing techniques enhance stand-out appeal in pubs and bars Aside from thermo-chromatic inks, other new printing techniques are beginning to be employed on packaging to improve on-shelf appeal. These are particularly pertinent for the on-trade where making products stand out to consumers is harder, as consumers often have less time at the bar to choose. Indeed, exclusive Datamonitor research carried out in June/July 2011 noted that 23% of all consumers decide what to drink only when they arrive in a pub, bar, or restaurant, compared to 14% of consumers who decide what to buy only when they arrive in off-licensed premises such as supermarkets.

In 2009, the whisky brand Ballantine’s Finest launched a self-illuminating bottle in the on-trade market. The dark blue spray-coated bottle utilized innovative electroluminescent technology. The label design reflected a graphic equalizer and appeared to react to sound passing through it by lighting up intermittently to provide an eye-catching display.

The launch featured as part of Ballantine's "Listen to Your Beat" initiative, which was based on the idea that by "listening to your own beat" and following your own instincts, an individual will make choices that leave an impression on others. Again, the use of smart packaging formed an integral part of the strategy to appeal to a particular kind of consumer looking for new, interesting experiences.

In 2010, Heineken Premium Lager was launched in the US in a new 16floz aluminum bottle that utilized UV technology. When viewed under the black light of a club, the bottle was illuminated to reveal a hidden stars and trails pattern.



Figure 20: New printing techniques enable beverages to stand out from the crowd




Smart packaging can help consumers make the most of new experiences One of the features of the sensory mega-trend is the fact that consumers are increasingly looking for new experiences. While such adventurousness involves a desire to embrace bolder, more extreme flavors and scents, it is also reflected in a growing interest in new outdoor experiences, including outlandish sports and exercise regimes.

According to Datamonitor research in 2009, almost half of UK consumers stated that seeking new challenges and experiences had become more important to them over the past two years. Smart packaging is well placed to tap into such trends, with innovative solutions for providing hot meals in "challenging" circumstances.

The Heater Meals range of self-heating ready meals is produced under the Crosse & Blackwell label. The product was developed by US-based Innotech Products and is based on the company's Truetech technology, which was originally used to develop flameless ration heaters (FRHs) for the US Army. The technology has since been adapted for the consumer market through a number of developments to create a range of self-heating meal kits comprising plastic cutlery and napkins, which have a shelf-life of up to five years. The meal kit comes with a sachet of salt water, which is poured onto a heating pad to provide "a piping hot meal in 10–12 minutes." The heat is generated via a chemical reaction between powdered food grade iron and magnesium, salt, and water.

Heater Meals have found the greatest success in such areas as camping and other outside pursuits. They have also been used in emergency situations including the 2011 Japanese earthquake, and by long-distance lorry drivers stranded by snow. The meals have also attracted a sizable following in social media channels such as Facebook, where consumers have been invited to swap stories of their experiences using the product in the most trying or unusual conditions.

Figure 21: Heater Meals provide hot ready meals in minutes without the need for a stove or microwave

46%of consumers in the UK state that that seeking

new challenges and experiences in life is more important or significantly

more important in the last 2 years




Smart packaging can be used to encapsulate aromas and flavors to enhance appeal According to Charles Ash, editor of Marketingweb, smell is the least used of the five senses utilized by marketers when building brands and looking to entice consumers to try their products. This is perhaps surprising given the accepted practice of retailers using in-store bakeries to improve overall ambience and induce shoppers to spend more, and probably reflects technical and operational difficulties in imparting flavors into unopened packs.

Some progress in this area has been made. US business ScentSational Technologies uses polymer chemistry to improve aroma profiles and the taste experience. The company's Encapsulated Aroma Release technology incorporates food grade flavors and fragrances within the structure of plastic packaging at the time of manufacture, and can be added to flexible films, rigid trays, and blister packs. The manufacturing process enables flavors to remain stable for a long time and, where food is in direct contact with the packaging, the flavors migrate into the product to improve overall aroma and taste. One interesting application for the technology is in healthy foods, where sweet or salty aromas could be incorporated in packs to offset the impact of introducing lower fat or reduced salt products.

Smart packaging technologies have had a measure of success providing new sensory experiences for consumers. Some, such as odor/flavor release products, remain largely at the development or trial stage, while others, such as thermo-chromic ink technology, have been proven both to work and in some cases become an important element in overall brand strategy. Nevertheless, the suspicion remains that the main applications for the technology to date have been rather frivolous, rather than providing significant benefits to consumers. Extending the concept to other more serious applications – for example, where extreme exposure to heat or cold could impair product quality, such as ice cream or dairy products – would no doubt provide further credibility, but it remains to be seen whether such applications may be better served by alternative technologies such as time temperature indicators.

Demand for visual on-pack indicators to reduce wastage and increase food safety is growing

This section identifies the extent to which consumer and regulatory concerns over food safety and unnecessary wastage is encouraging R&D into new forms of smart packaging that can readily communicate changes in the condition of its contents. However, the rate at which such packaging forms are being taken up by CPG companies remains slow, as consumers, retailers, and manufacturers remain reluctant to pay extra for such benefits.

Food safety concerns increase focus on smart packaging One of the major challenges facing suppliers and retailers is to ensure that fresh produce, meat, and poultry is displayed in the best condition possible on the shelf to maximize sales, assure product safety, and minimize wastage. Health scares, such as the E. coli outbreak in Germany in 2011, and the globalization of the food supply chain have increased the spotlight on the role that packaging plays in protecting produce and assuring quality and safety.

A wide range of recent research reveals that the continued importance of food and product safety remains very high on the list of priorities for consumers, retailers, and CPG marketers alike.

• A survey in 25 countries by Roper Reports Worldwide in 2010 identified that 49% of consumers in developed markets and 66% in developing countries were worried about the safety of the food they purchased.

• The 2010 Consumer Goods Forum "Top of Mind Survey" ranked food and product safety as the fourth most important issue facing 345 key decision makers in global retail and consumer countries across 46 countries.



Despite obvious concerns over major safety scares such as the Chinese melamine in milk powder scandal in 2008, it would appear that consumer concern is over the broader impact on health rather than corporate mismanagement. Datamonitor consumer research in 2010 investigated consumer confidence in product handling in-store. In response to the question "how trustworthy do you consider efforts made to ensure the safe provision of food and beverages at the grocery store?" 44% of consumers believed these to be trustworthy, compared with 11% untrustworthy.

However, there were significant differences in responses from country to country. Just 25% of German consumers believed such efforts to be trustworthy, together with 27% in South Korea, and 34% in Russia, while "satisfaction levels" were also below average in the UK, Australia, Italy, and Japan. In contrast, 58% of consumers in Brazil believed that efforts to ensure safety were trustworthy, closely followed by India and South Africa, with consumers in Canada, the US, and the Netherlands also showing below average concern.

Food safety legislation moving up the agenda in the US A clear indication of the increasing importance of food safety can be seen by recent legislation in the US. In December 2010, the Food Safety Modernization Act (FSMA) was passed by Congress. The legislation transforms the Food and Drug Administration's approach to food safety from a system that far too often responds to outbreaks rather than prevents them.

For example food facilities will be required to evaluate the hazards in their operations, implement and monitor effective measures to prevent contamination, and have a plan in place to take any corrective actions that are necessary.

From the packaging viewpoint, the main initial impact of the FSMA will be to ensure improvements in documentation and traceability. All packaging that is in direct contact with food, such as plastic film or foil, is to be treated as food and labeled with sufficient information. Such information can then be captured and tracked along the supply chain and traced back to the packaging supplier if necessary.

While such legislation is unlikely to result in an immediate direct increase in the amount of smart packaging used, it will encourage moves toward greater traceability and a related increase in accountability and responsibility for food manufacturers, and growers will create conditions where such solutions are likely to gain wider acceptance.



Food wastage has come under intense criticism in recent years from social, political, and environmental quarters

Research undertaken by the Waste Resources Action Programme (WRAP) in 2009 identified that UK households annually discard in excess of 8 million tonnes of food per annum. This equates to 6kg of food per week, and is estimated to cost the average family with children more than £50 per month. Such wastage has a significant impact well beyond family budget concerns. The coexistence of such wastage at a time of severe food shortages in many regions of the world presents social, moral, and political difficulties. Furthermore, disposal can potentially result in environmental problems, particularly if the waste goes into landfill, as the resulting methane is a far more harmful greenhouse gas than carbon dioxide.

Against such a background, smart packaging has a key role to play in preventing unnecessary wastage.

Labeling confusion contributes to unnecessary wastage One contributory factor to food waste in developed markets in recent years has been consumer confusion over labeling. According to the WRAP research, 5.2 million tons, or 64%, of UK wastage is regarded as "avoidable." In part, this reflects over-cooking and preparation, but more than half of such avoidable waste is due to food not being used in time. One of the chief contributors to this is believed to be consumer confusion on labeling, specifically between "best before," "sell by," and "use by" dates:

• "Best before" is a general indicator of quality, a date after which food may begin to lose flavor and texture.

• The "use by" date is a safety requirement designed to warn customers that food is not safe to eat after a particular date.

• "Sell by" dates are designed to help retail store staff manage stock.

Many consumers do not clearly understand these differences and uncertainty often leads them to throw away food that is otherwise perfectly safe to eat. Furthermore, many argue that the current labeling approach is too prescriptive and fails to take account of different storage conditions in people’s homes. It also, arguably, detracts from people making better uses of innate senses such as their sight, smell, and taste.



Despite such views, any relaxation on food labeling to reduce the safety margins is unlikely given the high risk involved for food manufacturers and retailers. However, the packaging industry and associated researchers have been working on a number of smart solutions to tackle the issue of effective food labeling and storage.

A number of smart packaging projects await full-scale commercialization A number of interesting R&D projects are underway in this area and are highlighted below. The analysis serves to highlight the point that there are a number of potential options available in the R&D phase, and the key question is which option to back in terms of commercializing the technology.

Smart labels change color in response to temperature changes Norwegian company Time Temp has developed an innovative intelligent device that is able to measure more precisely the freshness of food items as they pass through the supply chain from factory to consumer. The company is currently working with Norwegian grocery chain NorgesGruppen, baked goods supplier Lantmännen Unibake, and McDonald’s Norway, and plans to launch the product in late 2011.

“The existing practice of setting expiration dates on foods or other temperature-sensitive products – such as ‘best before,’ ‘use by,’ and ‘display until’ – is just a presumption of a product’s actual lifespan. To set such a date, one needs to guess what temperature the product will be exposed to throughout the cold chains. Because such average assumptions will never be correct for an individual product, a large portion of the food we discard is because of bad dates and is perfectly fine.”

TimeTemp general manager Christian Aasland, in discussion with FoodProductionDaily.com.

TimeTemp uses a small self-adhesive label attached to food products such as meat, poultry, dairy, and bakery. This contains a range of non-toxic chemicals that react and change color according to time and temperature. The chemical reaction is activated at the packaging line of the food producer and follows each item from production to consumer. The reaction shows the time left before expiration of that product in accordance with the actual degradation of the food item, which is illustrated and in an easy-to-read graphical format.

Intelligent sensor reacts with food to determine quality German research organization the Fraunhofer Institute has developed a cost-effective color-changing intelligent sensor film that can be integrated into meat or fish packaging to indicate if the food has spoiled.

The sensor film responds to biogenic amines produced by foods. These molecules are emitted principally by meat and fish when they decay and are responsible for the unpleasant smell given off by rotting foods. Once released into the air within the packaging, indicator dye on the sensor film reacts with them and changes color from yellow to blue. The technology can be used not just to show when food is inedible but also serves as a warning to consumers who are sensitive to or intolerant of the presence of amines, which are derivatives of ammonia.

Cinnamon active label extends peach shelf-life and maintains sensory qualities A new active packaging system containing essential oils has been found to significantly extend the shelf-life and preserve the quality of Calanda peaches, according to Spanish research. A label infused with cinnamon oils was attached to plastic packaging placed inside a perforated PET tray and extended shelf-life from five days to 12 days, cutting weight loss and maintaining firmness. By using labels rather than incorporating the agent directly into the polymer, the researchers were hoping to make gains in efficiency and cost.

Elapsed time indicator labels determine food freshness using chemical indicators UK business UWI Label has developed a technology with Heriot-Watt University to use chemical means to determine food freshness. The company's label has a green strip that indicates food age in weeks on a scale of one to four, with a red square indicating that the food is no longer edible. The product uses an "elapsed time indicator" to trigger a time device when the product is opened, and is able to work in both the cupboard and the refrigerator.



UWI Label is currently in discussion with food manufacturers over introducing the product; however, the increased price could be a stumbling block, particularly in the early stages of the development. It is felt that the product may gain more immediate acceptance in the pharmaceutical market, which is likely to withstand a higher initial price point.

Figure 22: UWI Labels are triggered when the pack is opened to provide a ready indication of food age




Visual indicators provide a positive sustainability message and align with the scratch cooking tendency

Smart packaging developments that are able to identify changes in conditions or freshness over time align well with growing consumer interest in cooking from scratch. Tougher economic conditions and a rapid rise in food prices are causing consumers to take greater care in budgeting through more effective menu planning. In the UK, fixed-price eating is becoming increasingly popular; for example, Marks & Spencer's "dine in for £10" offer and Sainsbury’s "feed the family for a week for £50" offer.

Consumers are increasingly looking to maximize the number of meals they can produce from raw materials and are becoming more flexible in their approach; for example, by using processed foods as constituents of meals rather than ready meals in their own right. Such flexibility is likely to encourage greater sensitivity both toward reducing wastage and ensuring that food is stored as safely as possible.

Datamonitor research in 2010 identified that, globally, 42% of consumers indicated that they were cooking from scratch more often than over the previous three to six months. The increase in popularity of scratch cooking was most notable in Mexico, Brazil, and China, but was also above average in certain European countries such as France and the UK. In contrast, the trend toward cooking from scratch was far less pronounced in advanced markets such Germany and Japan, while lower levels in the emerging markets of Russia and India probably reflect the fact that scratch cooking was already highly significant in those countries.

Overall the trend toward greater cooking from scratch is likely to encourage demand for smart packaging developments that improve consumers' control over food safety. However, the anticipated impact on food wastage is a little less clear cut. Greater emphasis on smart devices to track the quality of food should encourage more efficient usage of resources; however, overly safety-conscious consumers could potentially use the access to more detailed data to ensure that they only used such products when they were at the highest quality, and continued to discard perfectly safe materials, thereby actually increasingly potential food waste.



Figure 23: Tough economic conditions are convincing many consumers to cook from scratch rather than consume ready meals or eat out

To what extent, have you changed your eating & drinking habits in the last 3-6 months?

I am cooking from scratch more often (% of consumers)

5055

4455

4633

2838

2244

5734

4533

3535

4847

4342

AustraliaBrazil

CanadaChina

FranceGermany

IndiaItaly

JapanKSA

MexicoNetherlands

PolandRussiaSpain

SwedenUAE

UKUSA

Global




Smart packaging can make a contribution to reducing food wastage through the provision of more sophisticated sensors and intelligent labels able to track foods through the total supply chain. Smart packaging can help consumers with food preservation and discourage food waste; for example, 36% of consumers across the 15 markets Datamonitor surveyed for its green and sustainability survey in May 2010 stated they expect environmental issues to influence their choice of product in the next three years in food and non-alcoholic beverages. It is vital to recognize that smart packaging solutions that deliver on this will be an avenue for product development. However, whether such technology can be provided at little or no additional cost remains to be seen.

Smarter use of traditional packaging can improve the life of produce and compete against smart packaging

While smart packaging can be designed to improve the shelf-life of perishable products such as fruit and vegetables, consumers themselves can also make a significant contribution to reducing wastage. Simply by employing appropriate storage methods for different varieties of product and being aware of the benefits of correct use of packaging, consumers can make a difference.

UK retailer Morrisons seeks to educate consumers on the effective storage of food UK grocer Morrisons has taken the lead in educating its customers on the issue of smarter storage, although fellow retailers have responded with similar initiatives. In launching its "Great Taste, Less Waste" campaign in 2009, Morrisons announced some interesting results from its consumer research and product trials. The research found that 90% of Britons were storing fresh food in the wrong place, and 65% of consumers regularly throw away food despite feeling guilty. Two thirds of consumers thought that supermarkets have a duty to ensure the right packaging is provided, but only 12% believed that supermarkets "got it right."

Typical examples of household mistakes include keeping apples in the fruit bowl and tomatoes in the refrigerator, when the reverse is likely to improve shelf-life. As part of the campaign, Morrisons set up the Packaging Lab, a small team of specialists tasked with reviewing existing packs and recommending improvements, such as the following:

• Fruit – Bagged bananas have a shelf-life three days longer than loose produce, while weight loss on apples is reduced by up to 3.4% for bagged compared to loose produce.

• Vegetables – Weight loss on leeks is reduced by 4–5% after two weeks for packed produce over unpacked.

• Salads – Simply wrapping cucumbers in just 1.5g of plastic film wrap can improve shelf-life from three days to 14 days by preventing moisture loss.

Further improvements designed to cut wastage and improve the life of produce include the introduction of salad twin-packs with micro perforations designed to optimize internal pack atmosphere until usage, together with simpler measures such as introducing smaller packs for single person households.

“The central issue here is that the sheer amount of crops that spoil on farms or still usable food that we throw away, would be enough on its own to feed those people who go hungry. In both these scenarios, packaging can help.”

Werner Dornscheidt, president and CEO of Messe Dusseldorf, organiser of Interpack



Packaging has an important, if often overlooked, role to play in food preservation. Smarter use of existing packaging and greater understanding of optimal storage conditions for different foods, together with greater consumer care in planning and meal preparation, can significantly reduce unnecessary food wastage.

Technological developments will continue to encourage smart packaging but hurdles must still be overcome

The world of smart packaging, in common with other high-tech sectors, is constantly trying to address new challenges with disruptive technologies. However, there is often a disconnection between research technology and industry needs. While a lot of new research technology is being created, issues of affordability and integration into current manufacturing techniques are holding back commercialization. Some of the following emerging technologies are possibly the most commercially viable:

Developments in RFID present both opportunities and threats for consumers RFID has been around for a number of years but the main focus of attention to date has been on inventory control and logistics. The technology has generally been regarded as too expensive for many consumer applications, but this is beginning to change. While such developments could bring benefits to consumers, there are also some risks with privacy of primacy.

RFID can create intelligent packaging RFID technology uses tags and radio waves for identification and tracking as opposed to line-of-sight identification as used for barcodes. Every tagged pack within a pallet or container can be simultaneously scanned at once, and some tags can be read at a distance as a further time-saving measure. RFID tags can also hold more information than barcodes.

RFID creates intelligent packaging through its ability to hold a wide range of information, including product history and traceability within a digital format. At present, the technology is used mainly for stock management and control, where it provides significant operational benefits. Typical gains can include up to a 30% improvement in inventory accuracy and a 50% improvement in out-of-stock situations.

While reductions in out-of-stock situations provide some advantages for consumers, the main benefits lie firmly with the retailer and manufacturer in providing the ability to streamline their processes. However, future developments could be more consumer-oriented, particularly if the tags can be incorporated within the primary packaging rather than the outer container, which is the current practice. Potential applications include:

• Combining RFID tags and sensors to monitor temperature and other conditions of the product.

• Inclusion of RFID tags on labels and directly on consumer packaging to provide an effective measure against counterfeiting and/or mis-selling.



Active RFID tags can reduce food waste Dutch company Ambient Systems and Information Highway Group (IHG) of Spain collaborated to develop RFID tags with an in-built shelf-life algorithm to provide detailed data on the quality of food once it reaches a distribution center or processing facility. The so-called Cool Chain Monitor utilizes innovative software to record data through the supply chain:

“What is revolutionary about this Cool Chain Monitor is that the tag is not just designed to transmit an identification number but has extended memory and runs a program that gives information on temperature and shelf-life.”

Eelco de Jong, Ambient Systems' director of marketing and business development, September 2009 in discussion with FoodProductionDaily.com.

The partners conducted a pilot program with Spanish organic strawberry producer Bionest to demonstrate the benefits the system can bring to reduce food waste, even on products with high sensitivity to temperature conditions. SmartPoint RFID tags were placed in the strawberry pallets at the start of the transport process and measured the temperature every 15 minutes. Upon arrival at the German distribution center, the temperature conditions and remaining shelf-life of each pallet were communicated wirelessly to both Bionest and the retailer, enabling the retailer to select the ripest fruit for immediate sale.

The tag can be configured to monitor numerous kinds of fruit and vegetables, but could also be developed for the meat and even pharmaceutical sectors. Once the tag is adopted within a network, it transmits information at whatever time frequency required by the customer. Outside network coverage, the device stores all data and sends it automatically when coverage is resumed to provide a seamless solution to monitor products through the supply chain.

RFID tags have encountered criticisms over privacy infringements While cost restrictions and technical challenges have slowed progress on embedding RFID tags into consumer packs, another main barrier has been consumer concern, particularly over privacy.

In 2005, consumer privacy groups called for a global boycott of Tesco stores over the company's trial of RFID chips, labeling them "spy chips" because of fears that they were to be used to track customer behavior. Elsewhere, similar concerns led to German retailer group Metro to scrap their initial trials. Other applications for RFID, such as Transport for London's Oyster cards, UK passports, and a number of road toll payments schemes have met with far lower resistance, despite offering a similar potential "threat" to privacy. This suggests that consumers will accept being tracked and having their activities monitored if they believe that the applications deliver tangible benefits to them.

The key to the future development of RFID tags on consumer packaging is ensuring that they deliver real benefits to the consumer. Such benefits are likely to involve applications that enable consumers to access services through mobile devices, and in this respect, the technology could be said to be operating in similar area to QR codes.

It remains to be seen which technology will succeed over the longer term, and one of the conundrums facing marketers is which of the emerging smart and intelligent packaging technologies should be backed to make commercially viable. The fact that Apple has recently patented a touch display that doubles as an RFID tag reader could suggest that the technology is ripe for expansion, but the key to future growth is providing sufficient consumer benefits to allay perceived threats to privacy.



Nanotechnology offers exciting opportunities Nanotechnology is a method of controlling matter at near-atomic scales to produce unique or enhanced materials, products, and devices. Within the packaging field, it enables designers to alter the structure of packaging materials on a molecular scale to impart desired properties.

Nanotechnology offers three distinct advantages to food packaging:

• Barrier resistance – By altering the nanostructure, the gas and water vapor permeability of plastics can be engineered to preserve fruit, vegetables, and beverages, among other things.

• Incorporation of active materials to improve functional performance – Adding nanoparticles to bottles and packaging could enable them to be produced at lighter weight with better thermal performance and lower gas absorption. These properties can extend the shelf-life of products, as well as reduce transportation costs involved in shipping food.

• Sensing of relevant information – Nanoscale innovations could bring significant improvements to food packaging in the forms of the detection of pathogens, smart and active packaging, and barrier and mechanical properties.

Although the use of nanotechnology offers a number of potential benefits, it also raises environmental, ethical, policy, and regulatory issues. These relate mainly from a lack of knowledge of the interactions of nano-sized materials at the molecular or physiological levels, and their potential effects and impacts on consumer health and the environment. R&D in the field of active and intelligent packaging materials is very dynamic and develops in step with the search for environmentally friendly packaging solutions. In this context, the design of tailor-made packaging represents a challenge that still has some way to go.

Bioactive polymers can enhance food content According to the Journal of Applied Polymer Science, bioactive packaging is "packaging material that has been modified by the attachment or immobilization of bioactive components on the food contact surface." For food packaging, the most relevant bioactive compounds are likely to be antimicrobials, antioxidants, and enzymes. Bodies such as Cornell University and Rutgers University have been carrying out research into areas such as:

• the development of synthetic polymers incorporating bioactive molecules

• improving shelf-life through the use of plastic packaging films incorporating sesamol (a natural antioxidant derived from sesame seed).

Interest in printed electronic and e-packaging is growing Direct printing of electronic components onto packaging or labels is another area of growing interest, with potential applications being printed electronic sensors, printed RFID tags, and other electronic devices. This could, for example, enable electronic audio or visual elements to be incorporated within packaging to provide extra sensory benefits. The ability to develop smaller and thinner electronic devices at lower cost is likely to be a key driver of such developments in future.



The most recent developments in smart packaging, almost by definition, are based on very new technologies with limited established scientific validation. Future adoption will rely on such measures being able to offer demonstrable benefits to the consumer at minimal additional cost.

Conclusions and implications The issues explored in this case study offer some important points for consideration:

• Smart packaging can deliver consumer benefits and enhance branding – Active and intelligent packaging have the potential to make a significant contribution to satisfying emerging consumer demands in health, convenience, sensory, and connectivity.

• As upstream supply-side costs rise, the commercial viability for smart packaging increases – One of the key triggers for the application of smart packaging is the desire for it to work; however, as long as the main dialogue within the packaging industry is around price, making it cheaper and cheaper to tap into the value-conscious nature of consumer behavior in developed markets, the scope for smart packaging remains limited. As the cost of what is included within the packaging increases, however, so the backdrop for the incorporation of active and intelligent packaging becomes more favorable. This links with a return to added-value propositions as people begin to perceive that they can start to spend more on CPG brands post-recession, as they feel richer and more financially secure.

• Smart packaging does not have to be complex – Many of the smart packaging initiatives introduced to date have focused on novelty or gimmicks. While this may have been instrumental in gaining publicity for the launch and to secure initial trials, smart solutions that offer incremental improvements to address real problems stand a better chance of long-term success.

• The packaging industry needs to educate consumers on its merits – Consumer concern over sustainability has ensured that packaging is often regarded as a villain in the issue of wastage, when in fact correct use of packaging can reduce wastage by preserving and protecting food. Smart solutions that add extra layers of material or involve the use of materials which are difficult to recycle will not only prove difficult to market but could further reinforce consumers suspicions over packaging.

• CPG manufacturers can enhance their knowledge of customers through smart packaging – Smart concepts that enable brand owners to interact with customers through the pack are likely to become much more significant in future. Whether through the use of QR codes or through embedded RFID tags, brand owners will have the potential to amass a wealth of powerful data on consumer behavior. However, this will require careful choice over the types of offers and consumer opportunities that the technology provides in order to maximize engagement and minimize privacy concerns.

• Smart solutions must integrate well with modern production and packing lines – Smart packaging solutions need to obtain operational "buy-in" as well as meet consumer demand. Initiatives that involve additional material costs and/or slower packing speeds are unlikely to be adopted commercially unless they can be integrated into existing production procedures with minimum disruption.



APPENDIX

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Innovation in smart Packaging