Smart Packaging (Cont’d from Page 6)
For packagers, this contribution could involve pro- viding access to key customers, or as in one case, pro- prietary knowledge about food preservation chem- istry critical to a smart anti-spoil packaging solution. Second, companies should design a profit model that gives them a share of the newly created value. Truth of the Matter In sum, there are a few emerging truths in the smart packaging arena. First, the upside potential is large, as smart packaging is poised to solve numerous weighty business issues from stock-outs to counterfeiting to product spoilage to customer satisfaction and reten- tion. Second, smart packaging is organizing around a set of nine broad applications, which are arriving in waves—supply chain efficiency is leading the charge, followed closely by product integrity and customer engagement.Third, participants in the traditional pack- aging space ignore smart packaging at their peril since the downside of missing out could be disruption of their existing business model, and irrelevance. Lastly, to capture the rewards and avoid irrelevance, partici- pants should be bold and creative. Bold plays and new business models are a virtual certainty in the data-en- abled world of smart packaging.
of players in the system. Smart packaging, with reve- nues of US$23.5 billion in 2015,makes up only a small percentage of the global packaging industry estimated at US$424 billion. Nonetheless, it is expected to grow quickly, largely because it is seen as a mechanism for solving a number of high-value business problems. For users of smart packaging (brands, retailers, and end consumers), value creation comes in the form of the three sets of applications described earlier—great- er supply chain efficiency, enhanced product integrity, and superior customer engagement. Most important, however,is the value pocket in the middle,i.e.,the new set of revenue streams unleashed by the data spun off by smart packages. This is a battleground where the producers and users will meet to determine who will win the spoils.The report believes both sides can lay claim to it if they position themselves well, so there is a scenario where the spoils are equitably shared. To be able to capture value in smart packaging, com- panies must first be able to identify their unique,differ- entiated contribution to the smart packaging solution. This contribution gives them a seat at the “value-add table” and a stronger claim to getting access to data generated by the smart solution. Data is key to new revenue streams and often to premium pricing.
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8 April 29, 2019 Flexo Market News
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