Article by: Asst. Prof. Suwan Juntiwasarakij, Ph.D., MEGA Tech Senior Editor
Most of the existing smart packaging solutions are using advanced chemistry and materials to offer corrosion/moisture control or thermochromic capabilities, primarily for food and beverages, healthcare, and persona care consumer products. Connected packages, which can communicate with other packages or the internet, is still al relatively untapped opportunity, with simple car coding and RFIDs used increasingly for tracking and tracing package location in the supply chain.
Source: Mordor Intelligence
The smart packaging market is segmented by technologies (active packaging, intelligence packaging), end-user vertical (food, beverage, healthcare, personal care) and geography. According to Mordor Intelligence’s report, the market was valued at USD 35.33 billion in 2018, and is expected to reach 44.39 billion by 2024, registering a CAGR of 4.19% over the forecast period of 2019-2024. It helps to communicate and monitor regrading food quality using time-temperature indicators.
Source: Deloitte Analysis
According to Deloitte’s survey, adoption of connected packaging varies by industry, with consumer-packaged goods, and manufacturing and industrial companies expressing the highest levels of interest. However, connect packaging is still in the initial stages of growth and no application or industry is close to reaching maturity. The smart packaging industry is still highly fragmented, as both large-to-medium-sized and small-to-medium-sized enterprises continue to focus on narrow, one-off solutions, as opposed to delivering an integrated, cohesive offering for large-scale implementation. The interconnected nature of the ecosystem and the wide array of participants from infrastructure providers to packagers, brands, retailers, and consumers have prevented smart packaging from accelerating rapidly.
The producers and users of smart packaging can be benefit from it. Producers, which include packagers, material producers, and technology providers, stand to gain by designing and/or manufacturing all or part of the solutions. Many have also witnessed gains to their traditional business line just from proposing more sophisticated smart packaging ideas to their customers, regardless of whether those ideas get commercial transaction, “halo effect.”
Source: Mordor Intelligence
Moreover, innovation in the space has been driven primarily by small startups, and solutions have yet to achieve significant scale. Dominant industrywide Internet of Things (IoT) standards have yet to take hold, much like the days preceding the arrival of Bluetooth or WiFi in local wireless networks. The cost of sensorization and connectivity is still high, even though it has declined significantly in recent years and it has been expected to drop further.
Source: Deloitte Analysis
TAKE-HOME MESSAGE
Not only must smart packaging participants be nimble with their external assets, they need to be agile in configuring their internal innovation assets as well. This does not come easily to most firms, which continue to move all initiatives through rigorous discounted cash flow-driven business case processes. However, given that the rules of competitive advantage are still taking shape, smart packaging will involve agile innovation techniques in developing ideas, rapidly forming teams, jury-rigging prototypes, market-testing them, seeing what works, and iterating.