Why is blockchain important to the packaging industry?

From volatile crypto currency to a solid system adding value for the supply chain. Blockchain technology can be the key to value chain transparency and a solution to the ever-growing problem with counterfeits.

What is it?

A Blockchain is a database of records, here called blocks. What makes the database special is that these records are interlinked, or chained, using a hidden code. This is useful in a supply chain involving transport and transactions that can be recorded as blocks. Each block contains a cryptographic link to the previous block plus information on when a transaction occurred, who was involved and much more.

This may sound slightly abstract, but it makes the Blockchain concept decentralised and transparent. A key element is that the process is spread out across multiple computers with the consequence that no one has ownership of the information on the “ledger”. A non-corruptible database!

Using a Blockchain you bypass the concept of a centralised organisation by giving everyone who wants to use a Blockchain a complete and unalterable copy of the register of all transactions.

Why is it important for packaging?

Blockchain technology relates to packaging as it can be used to:

  • Provide consumers information regarding a product’s authenticity and origin. The identity of a product can be verified as the packaging is read and recorded to the “ledger” when handled along the transport, all the way to the destination. As the records can’t be altered retroactively, it means that all information on the ledger is by default authenticated, but without the paperwork of today.
  • Track and trace products along the value chain. When the value chain (packaging converters, printers, raw material producers, fillers, brand owners, retailers, etc.) join up in a Blockchain and makes the process transparent they will all share the same picture of origin and handling of products. If a batch is contaminated it can then easily be traced. Traceability is a key aspect and an opportunity, in particular for the food and pharma industries.
  • Ensure brand protection and serve as anti-counterfeit technology. Consumers will be able to tell a fake product simply pointing their phone at the packaging and read the QR code. Blockchain will prove to be a useful tool for building brand trust as a neutral and immutable system.

The demand for transparency and traceability is increasing, driven by counterfeits troubling the pharma industry and recent food scandals that shook the industry. Using Blockchain technology the consumer with a smartphone can simply scan a QR code on the packaging to follow the product journey, from farm to plate.

Who are using it already today?

It might not be mainstream, yet, but the technology is already in use for mundane items such as milk and coffee. In the lead we find major food suppliers like Arla who are running a pilot project in Finland using Blockchain to provide transparency for milk products. Nestlé recently started up their pilot but in a larger, or even global scale involving milk and oil. Barilla is using the technology in Italy to certify fresh basil.

Also the retailers are also into this. Carrefour is leading in Europe using the technology on a number of categories like poultry, eggs, cheese, milk, oranges, etc. On the other side of the pond Walmart is demanding Blockchain traceability for selected vegetables.

Where is this going?

This is only the beginning. Driven by the main advantages’ security, decentralisation and transparency Blockchain as a tool will gain momentum and develop fast.

The technology might seem complicated to use, but the tools are available and new entrepreneurs are coming in with easy to use solutions. With a straightforward access we can expect to see a rapid adoption rate, with a variety of applications. The packaging industry needs to be ready to handle their part of the chain of blocks. Printing and packaging are keys for success.

Online growth and packaging reconsidered

A new and purpose-made design can involve minimising size and weight, leading to concentrates and container reuse.

2019 looks like another big step forward for e-commerce, across categories. The final statistics might not quite in yet and the growth rates might not be as huge as a few years ago but the share of all retail is definitely growing, with consequences for the entire value chain.

One estimation is that, globally, the total growth of e-commerce in 2019 was 21% taking the online share of total retail sales up to a staggering 14%. The numbers vary strongly between categories and we are looking forward for the dust to settle and to get the final numbers for 2019.

As brand owner you respond to this shift in purchase patterns and adjust the offer, products and packaging to online shopping. One main consequence from a packaging/logistics point of view is that products are no longer shipped neatly stacked on pallets protected by secondary packaging.

Online shopping means the opposite for a shipped product. It could be sent alone to be delivered at a doorstep or be dispatched together with random products to a pick-up point, probably both. In any case the product will need more protection than the standard primary packaging can provide.

The situation is improved either by adding more and protective packaging, changing material from glass to plastic or why not design the packaging and product for e-commerce, or omnichannel, from the beginning.

A new and purpose-made design can involve minimising size and weight, leading to concentrates and container reuse.

Unilever has decided to make all their plastic packaging reusable, recyclable or compostable by 2025. To get there they are, among other things, offering shoppers refillable containers. This also works well for online shopping where the smaller sized refill units are saving weight and cost.
Cif household cleaning products are offered as concentrated refill capsules for the original spray bottle. Just add water and hey presto the product is ready for use. Unilever is also part of the Loop initiative where a whole range of products are offered online in refillable containers.


Another similar product concept from a leading brand owner is Pepsico’s Drinkfinity, also an example of a concentrated product sold in shipping friendly containers. The concept consists of juice-based pods and a reusable water bottle. Just add some H2O. This is probably also a move to meet a shift in consumer demand for more healthy products. Nevertheless Drinkfinity was launched online where the product has an e-commerce site of its own, just like any other direct-to-consumer brand.


Perso is a L’Oreal concept that takes this a step further. Perso is a device that actually makes personalised skincare products for you, in your home, and is powered by Artificial Intelligence. From the three cartridges contained in the machine it makes unique skincare, lipstick and foundation products, just for you. All personalised as you have fed the thing with pictures of yourself, location and your preferences. This is what you can call reusable and smart packaging.

The concept of concentrated, space saving, light weight products has many positive sides. It saves cost, it is a great way to streamline online sales logistics and maybe it even gives the consumer the satisfaction of a “homemade” product.

We'll meet again – return to reusable packaging?

The mantra in the packaging industry has for some time been Recycle, Reduce, Reuse. Recycling material is great when there is a demand for the recovered material and reduced use of material is good for both the environment and the budget. Reusable packaging is more complicated in many ways, in particular for food products.

The reuse concept has developed since the olden days of refillable glass bottles and today has an appeal also as an alternative to Single Use Plastics items for the foodservice industry and has a potential to improve environmental footprints for the e-commerce industry. It can also be a great marketing tool for food and beverage brand owners and a way to reach specific consumer groups.
Below a few examples of reusable packaging spotted along the way.

Food service

Hot drink cups with a deposit are now available in several cafés and restaurant, although in a small scale, where you pay up an extra dollar, pound or euro for your coffee, which then is returned when the container is returned at the bar.

Australian Returnr is taking the concept one step further when offering a series of foodservice containers. Not only cups but a whole range of reusable cups, bowls and lids that are designed for multiple use and also for takeaway. The aim is to support cafes and restaurants to eliminate single-use takeaway packaging. Returnr cups and bowls are, in Australia, free to borrow from cafes and restaurants with a $6 deposit. The deposit can then be claimed back from any restaurant who are working with Returnr. Something that attracts not only local cafés and restaurants but also Deliveroo who are offering Returnrs containers to their customers.

E-commerce

E-commerce as such is developing very fast but is from a packaging point of view there is plenty of room for new ideas.

RePack is an example of this. RePack is a packaging solution made specifically for e-commerce. It is a resealable and durable plastic bag in varying sizes that close with a zipper. It is unique though as it is made for reuse and linked to a deposit system. The reusable packaging itself is made from recycled materials and is space efficient in that it is flexible and adjustable to minimise air, saving money and resources. When the consumer receives the delivery, they return the now empty bag that is designed to fold back into letter size which simply is dropped in the nearest mailbox. The consumer incentive lies in the refund that comes as a discount on the next purchase. Back at RePack’s logistics hub the bag is cleaned and sent out to be used again.

Food and bev brand owners

Online grocery shopping is also growing very fast albeit from a small base and has some catching up to do compared to other segments. One significant example of new thinking is from Loop who promote reusable packaging for grocery and personal care products.

Loop is an interesting grocery e-commerce concept including a deposit-based refillable packaging scheme. It starts when a consumer order a home delivery where the Loop products arrive in a bespoke crate. With the following doorstep delivery of Loop products the empties are then picked up and returned for reuse. The packaging used is bespoke and made to be returned, cleaned and refilled. Materials used are metal, glass and plastic. Leading FMCG producers like Unilever, P&G and Nestlé have joint forces with TerraCycle an American recycling company to organise the Loop model. It’s in use in North America and in Europe the system is, at present, used by Tesco in the UK and by Carrefour in France.

Reusing containers is intuitively a good thing to do but the entire operation has to be considered, from start to landing. More transportation is usually needed, washing and rinsing using detergents and more material is normally used. When it comes to packaging it is never going to be simple but packaging reuse is definitely a path to explore. Looking forward to following the developments.

Between a brew and a hard place

The SABMIller/AB-InBev deal seems to go through. This is great but will obviously trigger a few consequences and produce both relative winners and losers. The packaging industry doesn’t necessary have to be one of the latter but it will definitely make things a bit more challenging.

balance

Now this consolidation of the industry is in combination with a micro/craft brewery trend that grows seemingly all over the world creates a market place with two extremes.

The polarisation of the field will give the packaging industry a headache. On the one side we have a few really large customers with an impressive leverage and with logistical and geographical demands never seen before. On the other side we have the really small but rapidly rising producers with limited reach that each demands very few but special bottles/cans/kegs at the time.

These opposing customer demands will have to be addressed and solutions must and will be found. The craft breweries are growing and they have aggregated formed into a significant and fast growing market for kegs and bottles and an even faster growing number of cans. It would be a mistake to not support them with suitable packaging solutions that meets their needs. Even if all the action seems to be in the other end of the field right now…