Integrating connected packaging tech: Investments boom in fight against emissions and counterfeiting

22 Mar 2023 --- Despite the cost-of-living crisis and global economic uncertainty, investment in connected packaging experiences continues to rise, according to industry experts. No longer only a data collection tool, connected packaging is now a long-term customer relations and educational media channel, helping companies navigate environmental sustainability requirements and inform product development and marketing decisions.

PackagingInsights discusses the expanding role of connected packaging with Massimiliano Martino, CEO at All4Labels Italy, and Jenny Stanley, managing director at creative technology studio Appetite Creative.

We discuss how connected technologies are being utilized to drive down carbon emissions, help in the fight against counterfeiting, educate the public on sustainable practices and help businesses predict consumer behavior.

Sustainability and digitalization duo
Martino says that environmental sustainability is increasingly gaining importance. “I am convinced that connected packaging is becoming crucial to decarbonize further the entire value chain across the industries,” he says.

Stanley adds that a primary driver is the new EU-wide rules on packaging, also known as the EU Circular Economy Package, which have already significantly impacted packaging companies across the EU.

Massimiliano Martino, CEO at All4Labels. A recent survey by Appetite Creative revealed that increased sustainability pressures on packaging producers and the introduction of new EU packaging laws have positively impacted the perceived value of connected packaging. “The majority (91%) of respondents agree that it helps to improve a company’s sustainability credentials, versus 80% in 2022.”

“Packaging manufacturers are now investing in ways to ensure packaging can ultimately become zero-waste. We’re helping them to educate and inform consumers in an engaging way via connected packaging to ensure the end user understands how and why to use and recycle the packaging,” asserts Stanley.

“The trend toward digitization goes hand in hand with a focus on sustainability. Brands are extending their sustainable practices into the digital realm to maintain eco-friendly platforms and meet sustainable goals,” adds Martino.

Connecting with waste reduction
Smart packaging is progressively becoming the “true digital products’ extension” carrying the large amount of data that can be processed and elaborated through machine learning and artificial intelligence to enable plastics collection, sorting and recycling – special robots function as prototypes for this, explains the All4Labels CEO.

All4Labels has made significant progress to be able to embed product identities and recycling information through the application of innovative QR Codes, eRFIDs and of digital watermarks, says Martino.

“Our All4Graphics unit is now able to design the packaging of the future containing a meaningful amount of data for brand owners, retailers and consumers,” he explains.

“Such data is becoming increasingly important, especially innovative, tech and data-driven companies are already outperforming their peers utilizing connected packaging, enabling them to instill a digital and resilient supply chain to operate at extremely competitive edges.”

“The last translates into significant reduction of waste and of CO2 emissions for higher operating margins with free cash to be reinvested into continuous improvement,” Martino says.

Consumer education
Connected packaging has experienced a rise in popularity in the last 12 months, with over four-fifths (81%) of those surveyed stating they have used connected packaging, compared to just over half (54%) in 2022, revealed Appetite Creative’s survey.

Almost half (48%) consider connected packaging important to help educate customers, which paints a similar picture seen in last year’s survey. Other valuable factors this year included direct customer interaction (45%) and using connected packaging to inform product updates or marketing decisions (42%), found the creative technology studio.

Stanley says that the survey results match the creative technology company’s experiences “with demand at an all-time high with demand for connected packaging from all the major manufacturers including Tetra Pak, Elopak and Greiner Packaging, who are all investing heavily.”

Universal experiences, fighting counterfeiting The connected packaging experience by Don Simon and Elopak.
Appetite Creative is working on global campaigns and for specific markets such as Spain, the UK, South Africa, Germany, Austria, Kuwait, Saudi Arabia, Dubai and Kenya. “They all have the same key elements and requirements, which are adapted to match the market-specific branding, products, culture and language,” explains Stanley.

“The requirements are so similar across regions we’ve developed a ‘universal’ connected experience for Tetra Pak accessed via its smart packaging, available to all brands. In a first for the packaging industry, the ‘white labeled’ web-based app, accessed via QR codes found on Tetra Pak packaging, can be easily adapted and tailored by brand and product requirements.”

“The great thing about connected experiences is that they can be adapted to the specific needs of each brand and product to create a bespoke digital marketing solution for each type of audience,” highlights Stanley.

Martino adds that All4Labels provides tailored advice to reduce exposure to the risk of counterfeiting and increase the relationship of trust with end consumers. To protect products from counterfeiting plays a crucial role in virtuous brand development, he says.

Personalization for customer experience
Hyper-personalization has become an integral part of outstanding customer experience, together with empathy and connection that play a fundamental role, asserts Martino.

“Brands increasingly need to elevate their game with new strategies, technologies and processes that tailor the care experience to each customer’s needs and journey,” he says.

Stanley also says that due to the growing trend toward e-commerce, there has been an increasing focus on personalized packaging solutions.

“Companies are using innovative technologies to create custom packaging that meets the individual needs of each customer. There are numerous examples of digital packing being created in smaller batches to ensure exclusivity and personalization, which is a simple process when sharing information via a QR code added to a carton or box.”

Stanley adds that a connected pack example she shared at Paris Packaging Week was the company’s work with Elopak’s new aluminum-free carton which Don Simon has just started using for its beverages.

“We were able to raise awareness of the new aluminum free carton, personalize the experience by product type, test customer knowledge and address the gaps and drive sales. All while identifying ambassadors for the brand. We saw an average dwell time of two minutes and 46 seconds, 14% scan rate and 60% registration,” she asserts.

Jenny Stanley, managing director at Appetite Creative speaking at the Paris Packaging Week.Increasing demand
Stanley continues that Apetite Creative’s survey showed that planned investment in digital marketing for 2023 rose by 88% compared to 59% in 2022. “This is more than double seen in 2022 when 40% planned to increase investment by less than US$18,000. This shows just how high the demand is now, even compared to last year,” asserts the studio’s managing director.

Meanwhile, Innova Market Insights is also observing packaging to be an increasingly valuable platform for digital engagement in its 2023 top packaging trends. Technologies like QR codes, NFC and AR have begun to emerge in recent years as cost-effectiveness and consumer appetite grow.

The market researcher revealed that 77% of global consumers are now interested in engaging with connected packaging technologies on-pack via their smartphones.

Predicting consumer behavior
When asked what connected technologies have the biggest future potential for the industry, Martino says blockchain and metaverse have “enormous” potential for developing digital elements within packaging solutions.

Furthermore, Stanley says that consumers now see QR codes as a normal way to access branded content, games and experiences – and they are happy to share their personal data in exchange for this value add.

“Combined with the rise of connected packaging experiences, brands are likely to increase their investment in this supercharged media channel like never before and the results are already impressive,” adds the Appetite Creative managing director.

“We’re also seeing large brands such as CocaCola and Ab InBev announcing global strategies for connected packaging. If brands can better understand consumers and their consumption, it’s easier to predict their behavior.”

“By using the data collected via connected packaging, brands are finding patterns and predictions invaluable to inform product development, marketing and customer targeting strategies which increasingly rely on these global strategies for connected packaging,” concludes Stanley.

By Natalie Schwertheim

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