Digitalization is transforming almost every aspect of society and the packaging industry is no different. Digital trends are changing the dynamics in the packaging value chain. Brand owners now want the packaging to be interactive and to be used as a consumer engagement and data mining tool.
In response, digitalization tools are evolving to be compatible with conventional packaging machinery and formats. A classic example of the same is the developments in digital printing, which started as a response to decreasing lot sizes per stock-keeping unit (SKU) but has been more successfully adopted as personalisation and variable data printing technology.
Big brand owners are facing different challenges, each coming from the competition, ever-increasing consumer demands, and the entry of private labels, forcing them to rethink their value chains. This is leading to profound changes in the global packaging industry. The packaging industry is adopting various digital tools to meet the demands coming from brand owners, including digital printing options, various QR codes, smart packaging, and RFID integration, to name a few.
The pace of digitalization in the packaging value chain is increasing rapidly and all the stakeholders in the value chain need to adapt to the changing times and demands, all the while keeping an eye out for additional opportunities for digitalization and growth.
Digitalization at the heart of sustainability
Digitalisation is offering many avenues of use in packaging and manufacturing. Not only does it enable new features in packaging, it’s also at the heart of sustainability efforts that the industry is embarking on. Digitalization is now driving improvements in operational performance by way of connected “smart” machines (Industrie 4.0), assisting in the design for circularity through smart packaging (embedded codes for automatic post-use sorting), allowing superior energy utilization platforms, thereby lowering overall carbon footprint of the products.
Packaging sustainability remains an industry-shaping trend. Global FMCG multinationals and big retailers have made commitments to ensure that all the packaging that they use is designed for recycling, mostly by 2025.
This is being followed by investments and collaboration in the entire value chain to develop sufficient recycling infrastructure so that packaging is not only designed for recycling, but it also actually gets recycled.
Digitalisation is again at the centre of this recyclable packaging since each packaging type (Polyethene, Polypropylene, Paper, etc) needs to be identified and sorted into different material types post use. This is being achieved by embedding machine identifiable codes into packaging which are recognised by scanners installed on high-technology sorting machines.
The pandemic reemphasized and redefined the need for food safety and hygiene as food reaches the consumers and remains safe over its entire shelf life. Digitalisation of packaging indicating codes and “best by” tags is empowering customers to know that what they are buying is safe and healthy.
Smart packaging will enhance recyclability, traceability, and safety
Digital technologies provide the possibility for transformative advancements in the food packaging industry. Traceability, convenience, and tamper detection are secondary features, which are becoming increasingly important. Additionally, one of the key values in smart packaging is the easy access to information on the raw materials used in the packaging, which facilitates easier recycling.
Going forward, the increasing speed of digitalization will lead to digital influence on the value chain through automation and the widespread use of new technologies. These will not only improve cost efficiency and productivity but will also make the distribution of products more resilient and transparent through real-time tracking.
This development could lead to a greater need to integrate technology, radio-frequency identification (RFID) tags, and near-field communications (NFC) into product packaging. Whatever the outcome, innovative packaging design will play an important role in enabling this – and packaging manufacturers will need to re-evaluate their strategies in view of the evolving trends.
Vision of a digitally enabled future
In the modern food system, the packaging is every bit as important as its contents. Packaging can now be embedded with technology that offers a range of functionality. Digitalization is proving to be a powerful catalyst for information transparency – blockchain, ingredients authenticity, among others, leading to value creation.
Through digitalization, the entire value chain will become more transparent, agile, and flexible. Also, across the whole production workflow, timely decisions will be made possible. The industry will enter a period where connected systems will contribute data to the entire production process for faster and more precise optimization.
At Huhtamaki, digitalization is a key differentiator for our products and a business imperative for our operations. Digital technology and data will inevitably reshape the way we do business with our customers and our operations. We see digitalization as the enabler and connector for our strategic priorities to deliver growth.
To become the first choice in sustainable packaging solutions, we must digitally enhance the efficiency of our operations, facilitate ease of doing business with us for our customers and develop digital products and services including smart packaging.
