Smart Packaging � The Future of Packaging Design

Smart Packaging — The Future of Packaging Design SmartMarketing 2006 - Future In Focus March 15-16, 2006, Westin Casuarina Hotel and Spa Las Vegas, NV 4 Gail Barnes Ph.D. M.B.L., Tetra Pak Carton Chilled Inc. gail.barnes@tetrapak.com Gail Barnes Slide 1 Summary Thermochromic inks, Radio Frequency Identification (RFID) tags, biosensors and plastic based inks that can act as semiconductors — Does this sound like a science fiction novel? These are some of the technologies that are called "Smart Packaging." These ideas can and will impact the dairy value chain in many ways over the next five to ten years. This presentation covers the possible impact of this form of packaging innovation to the dairy industry through the use of case studies and industry examples from around the world. Gail Barnes Slide 2 Acknowledgements  I would like to thank the persons below for their friendship, collaboration and information that they have so graciously shared • • • • • • Kaj Grenrud, Director Supply Chain Management, Skåne Dairies, Sweden Bengt Sahlberg, President and CEO, Bioett, Sweden Katarina Flemmer PhD, Tetra Pak Research And Development, Sweden Hans O. Johansson, Tetra Pak Research And Development, Sweden Wolfgang Mildner, Managing Director, PolyIC, Germany Patrick J. Sweeney II, President and CEO, Odin Technologies, USA Gail Barnes Slide 3 Intelligent Vs Smart Packaging Intelligent Packaging Mechanical packaging Active packaging Oxygen scavengers Absorbers and Releasers Smart packaging Thermochromic inks Indicators / Sensors Automatic identification (RFID) Self heating Self chilling Gail Barnes Slide 4 Thermochromic Inks  Are inks that become visible only at certain temperatures  Are supplied as two components (both water based) as: • Active temperature sensitive product • Carrier resin for printing  Typical options suitable for beverage consumption purposes: • Fully activated at 5oC and below (not a standard product) • Fully activated at 8oC and below Gail Barnes Slide 5 Tetra Pak Case From Europe, 1995: The Penguin Sang The Blues  In the converting process a penguin and snowflake were printed onto Tetra Pak’s Tetra Brik Aseptic cartons (ambient distribution and merchandising)  No color visible at ambient temperatures  When placed in the refrigerator and upon reaching 5oC, the penguin and snowflake would appear along with a message: ―Perfect to drink‖ Gail Barnes Slide 6 Management Center Europe Innovation Award Winner, 1995  Placed first against an array of innovations that included the soda dispenser from the Space Shuttle Gail Barnes Slide 7 Further Thermochromic Ink Market Tests  ―Passion Predictor‖ promotion in Taiwan • Red lips appeared on package after holding lips to carton  Competition (short term promotion) in the UK • A different ink supplier was used, and the ink color did not develop uniformly Gail Barnes Slide 8 The Result Of The Thermochromic Ink Market Tests  First time in the UK and Taiwan that such inks had been used on any type of carton – milk or otherwise  It was, unfortunately, also the last • Where do you go after a ―one off‖ promotion? • What happens when the technology doesn’t work as it should? Gail Barnes Slide 9 Thermochromic Ink Lessons Learnt  Avoid the Technology Temptation Trap • High impact but short term promotions, e.g. competitions  Avoid gimmicks that belittle the impact of a technology • What would have been different if it was used for pharmaceutical protection?  Go for longer term, sustainable applications  Technology, especially a new technology, must work • Not some of the time • All of the time • And in the way it is supposed to Gail Barnes Slide 10 Mar De Frades Case – Making Waves With Thermochromic Inks (1)  Recognized by Time Magazine as one of the ―Most Amazing Inventions Of 2004‖  Featured on ―The View‖ Gail Barnes Slide 11 Mar De Frades Case – Making Waves With Thermochromic Inks (2)  Back label describes how the temperature sensitive logo works  Consumption when the small boat is visible ensures the perfect consumption temperature / consumption experience Gail Barnes Slide 12 Hypothetical Concept Case: Brand Owner Leverages Cross Brand Synergies, Builds Category Gail Barnes Slide 13 Indicators / Sensors (1) - Expiry Date Indicators  smart-labels  Automatically monitor lapsed time  From under 1 day to 6 months ―Timestrips‖ are single-use, disposable,  Work by capillary action, allowing a tinted liquid to migrate through a micro-porous material at a consistent rate  Nestlé is about to begin full-scale trials of Timestrip smart labels within its UK foodservices division  www.timestrip.com Gail Barnes Slide 14 Indicators / Sensors (2) – Time Temperature Biosensors™  Detect temperature abuse  Validate that the cold chain is working  Electronic storage of reading data for analysis  Validate incoming goods  Create extra awareness on maintaining the cold chain  Cost efficient and commercially available Gail Barnes Slide 15 Skåne Dairy Case From Sweden – First Dairy to Use Time Temperature Biosensor System™  Time Temperature Biosensor ™ (TTB™ ) from Swedish company Bioett  Combines biotechnology with RF electronics  Measures the accumulated temperature load  Offers a cost efficient management tool  First patent approved in USA and EU  www.bioett.se Gail Barnes Slide 16 Skåne Dairy’s Reasons For Testing / Introducing TTB™System  Customers more and more demanding on product quality  Temperature reading at every delivery to the retailers  An unbroken cold chain is more important when handling products with added value  Hence dairy quality system requires stricter control than normal Gail Barnes Slide 17 Skåne Dairy’s Objectives In Introducing The TTB™System  Validate the cold chain - from dairy to store  Reading at Frigoscandia cold store, wholesaler and at store level  Identify areas of improvement in the whole chain  Use actively in marketing efforts  Find benefits for Skåne Dairy to use Bioett system  Illustrate that Skåne Dairy is taking action to safeguard product quality and brand promise  Expansion to more lines if successful Gail Barnes Slide 18 Results From Skåne Dairy TTB™System Pilot In 2003 Skåne Dairy Lunnarp Frigoscandia ICA Kungälv Staffanstorp • Average time 1 day • At 25% of deliveries, specific pallets had signal above limit • More cooling needed at dairy • Average time 7 days • 20% of deliveries had signal above limit • Not same pallets Gail Barnes Slide 19 Skåne Dairy Case - Summary Of Results  Variations in the cold chain were detected  Areas for improvements were identified, both at dairy and in the supply chain  Bioett system worked well  Good repeatability in reading data, information system made analysis easy Gail Barnes Slide 20 Skåne Dairy Case - Conclusions  Has put more focus on the importance of maintaining the cold chain by all involved  The Bioett system can be used to identify deviations in the cold chain  The information system is a good management tool  Both Frigoscandia and ICA are positive to the system Gail Barnes Slide 21 Skåne Dairy Receives ‖Golden Tag 2005‖ Award From RFID Nordic “This (TTB™) solution allows us to control the quality of our products from beginning until end.” Kaj Grenrud, Director Supply Chain Management, Skåne Dairies, Sweden Gail Barnes Slide 22 Indicators / Sensors (3) – Ripeness Sensors  RipeSense from New Zealand - Removes The Need To Squeeze  Time Magazine award for ―Most Amazing Inventions of 2004‖  Sensors detect levels of ripeness by detecting aromas emitted by fruit  www.ripesense.com Gail Barnes Slide 23 RFID Defined  RFID (radio frequency identification) is a technology that incorporates radio frequency to uniquely identify an object  RFID is coming into increasing use in industry as an alternative to the bar code  The advantage of RFID is that it does not require direct contact or line-of-sight scanning and can read many tags simultaneously  System consists of three components • Antenna • Transceiver (Antenna / transceiver often combined into one reader) • Transponder (Tag, also called Electronic Product Code (EPC) tag). Gail Barnes Slide 24 Global Commerce Initiative (GCI)  Brings manufacturers and retailers together on a worldwide parity basis  GCI has no power to set or enforce global standards • To simplify and enhance global commerce • Improve consumer value in the overall retail supply chain  Its executive board comprises of some 40 of the largest worldwide consumer product manufacturers and retailers  Retailers  Manufacturers AEON ALBERTSONS CARREFOUR CBD - GRUPO PAO DE ACUCAR CORPORACÖON E.WONG S.A.C. DELHAIZE GROUP FEDERATED DEPARTMENT STORES METRO Group PICK'N PAY ROYAL AHOLD SAMSUNG TESCO TARGET CORPORATION TESCO THE BOOTS COMPANY PLC WAL*MART STORES, INC. WEGMANS FOOD MARKETS AJINOMOTO CO. BRITISH AMERICAN TOBACCO COLGATE-PALMOLIVE GEORGIA-PACIFIC CORPORATION GILLETTE GROUPE DANONE HENKEL KGaA J.M. SMUCKER COMPANY JOHNSON & JOHNSON KAO CORPORATION KRAFT FOODS L'OREAL MARS INC. NESTLE S.A. PEPSI COLA PHILIPS LIGHTING BV PROCTER & GAMBLE RECKITT BENCKISER SARA LEE THE COCA-COLA COMPANY UNILEVER Gail Barnes Slide 25 GCI – How To Get The Real Benefits From Electronic Product Codes (EPCs) / RFID  Ensure company has clean, accurate product data that is aligned with trading partners and being shared automatically with those trading partners  Embrace the exchange of supply chain information and collaboration via the EPC Global Network as a source of business improvement, not as a threat  Establish clear information-sharing work practices with your trading partners and support the use of free, standards-based information exchange  Manufacturers and retailers should collaborate to craft a workable roadmap for EPC deployment focusing on high potential categories and the most accessible supply chain opportunities  www.gci-net.org/ Gail Barnes Slide 26 Some RFID Applications  During the manufacture of packaging material • Tests with RFID labelled board reels in converting factories • Co-operation between RFID label producer Rafsec and board supplier Stora Enso  The pallet / container  The traded unit  The consumer unit Gail Barnes Slide 27 RFID Case – WIP And Asset (presented Sept ’05 at Case Study: John Deere & Company Tracking EPC Global)  Tough to tag products: high metal content  Site assessment, SKU testing, design and installation  Two facilities 500 miles apart – full integration  28 days start to finish  100% read rates Key Lessons  Hired an experienced partner  Used physics to their advantage  Middleware knowledge was key  Strong project management and leadership wins ODIN technologies Gail Barnes Slide 28 Wal-Mart Case – Using RFID To Increase Sales By Reducing Out Of Stocks  29-week study in 2005 analyzed out-of-stock merchandise • All Wal-Mart formats - Supercenters, Discount Stores and Neighborhood Markets - were included in the study • 12 pilot stores equipped with RFID technology • 12 control stores without the technology  RFID-enabled stores were 63 percent more effective in replenishing out-of-stocks than the control stores Gail Barnes Slide 29 What’s Next For Wal-Mart?  By October 2005 Wal-Mart had more than 500 stores and clubs and five distribution centers live with RFID  During January 2006, Wal-Mart’s next top 200 suppliers went live, shipping EPC-tagged cases and pallets  By the end of 2006, more than 1,000 stores, clubs and distribution centers will be using RFID  The next wave of 300 suppliers will start shipping tagged cases and pallets by January 2007  Total number of suppliers live in early 2007 will be more than 600 Gail Barnes Slide 30 How Do You Get RFID Right? Physics!  All products react differently in a RF field  Need to use scientific testing tools to determine profile of the product(s)  No single answer, different product configurations demonstrate a continuous spectrum of performance ODIN technologies Gail Barnes Slide 31 Formal Testing Will Help RFID Succeed  Two different locations on a single box yield very different results based on the RF properties of the product  RFID is difficult today • Its invisible • Current reader technology do not make the complexities easy ODIN technologies Gail Barnes Slide 32 What’s next For RFID? Chips Based On Printable Organic Semiconductors? “Cheap, smart, thin and eventually completely disposable.” Organic Semiconductor Conference program, Cambridge, UK, 2003 www.polyic.com Gail Barnes Slide 33 Possible Applications Of Printable Organic Semiconductors  In converting factories to track board reels  In a retail environment the contents of a trolley could be totaled automatically without the contents having to be unpacked and each item manually entered or scanned  On carton displays  Consumer information / communication www.polyic.com Gail Barnes Slide 34 Hypothetical In Store Concept Gail Barnes Slide 35 Hypothetical On Carton Concept (1)  Product sensors  Interactive display  Shows temperature history and vitamin content Gail Barnes Slide 36 Hypothetical On Carton Concept (2)  Interactive display  Teach yourself yoga  Shows different yoga positions Gail Barnes Slide 37 Hypothetical Consumer Concept – Facilitates Decision Making  Allow products communicate their benefits directly to the consumer • “Drink Me” for the 21st century  While shopping  Only products that meet specific criteria are shown • Low / no cholesterol • High in calcium  Communication received by • Cell phones • PDAs • Other hand held devices, e.g. “My Lifestyle Manager” Gail Barnes Slide 38 In Conclusion Thank You! Gail Barnes Slide 39