Smart Packaging Drives Brand Engagement: AR Labels, RFID and NFC Take Center Stage

Smart packaging generally describes a group of packaging solutions that retain their basic packaging role while also 'recognizing' and 'judging' environmental factors. They can sense, monitor, locate and record product-related data, enabling efficient and convenient information exchange and interaction with users. According to the latest report from global technology and consulting firm Technavio, the global smart packaging market will grow at a compound annual growth rate of nearly 8%. Experts predict that packaging pouches made with smart packaging technology will account for 20%-40% of all food and beverage packaging pouches in the future.

The smart packaging market continues to expand

In China, food and medical safety remain relatively severe, making industry transformation imperative. This creates an urgent need to raise packaging intelligence and use multiple methods to protect product safety in application industries. Smart packaging is seen as a strong measure for safe production and has substantial development potential. Developed countries have already given smart packaging considerable attention and progress, while China's R&D and cross-sector applications are still at an early stage. Still, from another angle, although China lags developed countries in smart packaging adoption, its domestic market offers broad profit opportunities waiting to be tapped.

With such a vast blue ocean ahead, the development and application of many smart (functional) packaging types in China have only just begun. Zhong Bo said, 'Look at the supermarkets, convenience stores and pharmacies around us: among the wide array of flexible packaging for food and medicine, how much is smart packaging or functional packaging?' He explained that in functional packaging, modified atmosphere packaging and aroma-releasing packaging are relatively mature in China, while gas-adsorbing packaging (moisture-absorbing, ethylene-absorbing and oxygen-absorbing) usually comes in sachet form and is not highly technical. By contrast, gas-adsorbing packaging developed overseas can already blend non-toxic adsorbents into the film resin. Other functional packaging and many smart packaging products remain almost blank in China.

Among smart packaging categories, RFID (radio frequency identification) electronic tags are relatively familiar to the Chinese public. The 2008 Beijing Olympic Games, together with stronger government oversight of medicines and food, helped drive RFID electronic tag use in China, with many applications in logistics, packaging, retail and manufacturing. Smart identification technology will be used in some areas, such as medicines and food, but China will not yet become a major consumer of RFID electronic tags. Given the general public's spending level, smart identification technology has not entered ordinary people's daily consumer market.

Smart packaging keeps bringing fresh insights to brands

Across the market, many food and beverage companies are incorporating more augmented reality (AR) labels into their designs. Technology is influencing packaging design, and as packaging formats and design technologies are adopted, brands are adding extra dimensions to their packaging to attract and inform consumers.

AR labels help consumers learn brand-provided information by scanning images or labels on product packaging, and consumers can activate or view them by scanning the AR label with a smartphone. Experts note that companies are using AR and other packaging design elements to improve consumer satisfaction, build trust by sharing information, help brands establish their identity and deepen relationships with fans.

As technology advances, the line between reality and virtuality is blurring. Coca-Cola, for example, worked with an illustration company to bring its bottles to life through AR. Coca-Cola said in a statement that consumers can scan a code on the bottle to view exclusive animations and enter competitions. Nongfu Spring launched a crossover collaboration with NetEase Cloud Music, using NetEase Cloud Music vinyl records on the bottle to form the Nongfu Spring landscape logo. The bottle uses AR technology: after users scan the vinyl record pattern, an immersive starry sky scene automatically appears on the phone screen, and tapping the planets that appear pops up a random music review.

RFID and near field communication (NFC) are also among the technologies used in smart packaging. With this technology, companies can safeguard goods across the supply chain from production to sales, and packaging can tell consumers where it has been and where it is, what is inside, whether the product is authentic, and whether it has been opened.

With smart labels added, brands can tell stories in new ways while ensuring authenticity. Take Dongpeng Special Drink's electronic label as an example. Unlike Master Kong, PepsiCo and others that use laser printing to display core product information on the bottle, Dongpeng launched China's first electronic-label functional beverage and addressed brand information delivery through the digital approach of 'one code per bottle.' By scanning the QR code on the cap, consumers can clearly see ingredients, effects, production date, batch, manufacturer and other details. While meeting both brand information delivery and low-carbon environmental needs, it also opens a direct dialogue channel between the brand and consumers, making interaction stronger.

Multiple factors constrain the path of smart packaging development

High cost has long been one of the main obstacles to smart packaging development. Zhong Bo said that technologies such as chips suitable for packaging and printable antennas and circuits are not as easy to popularize and apply as traditional printing. The technical challenges of installing and managing related infrastructure, placing electronic readers, and retrieving, using and storing tag information are complex and expensive. As a result, product transformation is not within reach for every domestic packaging and printing company. At present, they still lag in investment in smart packaging technology, talent recruitment, and upgrades to equipment and materials.

At the same time, China's research into packaging raw materials is relatively weak. Beyond the poor performance of the materials themselves, many products still depend on imports, which prevents later technology upgrades from being applied on a large scale. Moreover, domestic companies have limited R&D capability: only a few large packaging firms can conduct R&D, and they rely on universities or research institutes. With China's smart packaging market still small and public acceptance insufficient, raising profits and achieving efficient production have become difficult issues that smart packaging must solve.

To address these problems, Zhong Bo said that ordinary people do not fully recognize the importance of smart packaging, which leaves smart packaging expensive and without a market, affecting product development and promotion. Therefore, the state should actively advocate the use of smart packaging products, combine this with internet big data, cultivate and encourage industrial upgrading, increase supportive policies, and let information technology act as a booster to gradually raise smart packaging's market share.

The 5G era has arrived, and the internet economy will drive the smart packaging industry to take off. For packaging companies, the smart packaging market has only just begun and offers broad market space. Even in a 'harsh winter,' companies should increase investment in new product development, strengthen collaboration with universities or research institutions, seize priority markets and broaden their development path.

——This article is reprinted from China Packaging Network (pack.cn). Original link: http://news.pack.cn/show-379367.html