SmartMarketing 2006 Future In Focus

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Smart Packaging The Future of Packaging Design

• SmartMarketing 2006 - Future In Focus
• March 15-16, 2006, Westin Casuarina Hotel and
  SpaLas Vegas, NV
• 4
• Gail Barnes Ph.D. M.B.L., Tetra Pak Carton
  Chilled Inc.
• gail.barnes_at_tetrapak.com

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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.

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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

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Intelligent Vs Smart Packaging
Intelligent Packaging
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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

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Tetra Pak Case From Europe, 1995 The Penguin
Sang The Blues

• In the converting process a penguin and snowflake
  were printed onto Tetra Paks 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

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Management Center Europe Innovation Award Winner,
1995

• Placed first against an array of innovations that
  included the soda dispenser from the Space Shuttle

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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

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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 doesnt work as
  it should?

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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

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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

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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

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Hypothetical Concept Case Brand Owner Leverages
Cross Brand Synergies, Builds Category
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Indicators / Sensors (1) - Expiry Date Indicators

• Timestrips are single-use, disposable,
  smart-labels
• Automatically monitor lapsed time
• From under 1 day to 6 months
• 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

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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

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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

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Skåne Dairys Reasons For Testing / Introducing
TTBSystem

• 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

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Skåne Dairys Objectives In Introducing The
TTBSystem

• 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

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Results From Skåne Dairy TTBSystem Pilot In 2003
Frigoscandia Staffanstorp
Skåne Dairy Lunnarp
ICA Kungälv

• 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

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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

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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

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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

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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

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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).

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Global Commerce Initiative (GCI)

• Brings manufacturers and retailers together on a
  worldwide parity basis
• To simplify and enhance global commerce
• Improve consumer value in the overall retail
  supply chain
• GCI has no power to set or enforce global
  standards
• Its executive board comprises of some 40 of the
  largest worldwide consumer product manufacturers
  and retailers
• RetailersAEONALBERTSONSCARREFOURCBD - GRUPO
  PAO DE ACUCARCORPORACÖON E.WONG S.A.C.DELHAIZE
  GROUPFEDERATED DEPARTMENT STORESMETRO
  GroupPICK'N PAYROYAL AHOLDSAMSUNG TESCOTARGET
  CORPORATIONTESCOTHE BOOTS COMPANY PLCWALMART
  STORES, INC.WEGMANS FOOD MARKETS

• ManufacturersAJINOMOTO CO.BRITISH AMERICAN
  TOBACCOCOLGATE-PALMOLIVEGEORGIA-PACIFIC
  CORPORATIONGILLETTEGROUPE DANONEHENKEL
  KGaAJ.M. SMUCKER COMPANYJOHNSON JOHNSONKAO
  CORPORATIONKRAFT FOODS L'OREALMARS INC.NESTLE
  S.A.PEPSI COLAPHILIPS LIGHTING BVPROCTER
  GAMBLERECKITT BENCKISERSARA LEE
• THE COCA-COLA COMPANYUNILEVER

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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/

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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

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Case Study John Deere Company (presented Sept
05 at EPC Global)
RFID Case WIP And Asset Tracking

• 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

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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

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Whats 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-Marts 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

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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

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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

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Whats next For RFID? Chips Based On Printable
Organic Semiconductors?

• Cheap, smart, thin and eventually completely
  disposable.
• Organic Semiconductor Conference program,
  Cambridge, UK, 2003

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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

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Hypothetical In Store Concept
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Hypothetical On Carton Concept (1)

• Product sensors
• Interactive display
• Shows temperature history and vitamin content

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Hypothetical On Carton Concept (2)

• Interactive display
• Teach yourself yoga
• Shows different yoga positions

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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

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In Conclusion
Thank You!