Near Field Communication and e-Labels will drive a new revolution in product information. The war on plastics will escalate to unprecedented levels. Retailers will demand that manufacturers join more sustainability schemes: 2019’s biggest industry trends will all be about manufacturers proving their authenticity, transparency and sustainability. And if it all sounds a bit heavy, don’t worry, the revenues are potentially huge.
In 2019, Near Field Communication, E-Labels and smart labels will all drive a revolution in product information and transparency
It’s your wedding anniversary, so you’re standing at your local store contemplating a bottle of Châteauneuf-du-Pape for the special occasion. Just as you’re wondering why it seems so unusually cheap—ping. A clip pops up on your phone showing you the exact vineyard where the grapes were grown, its climate, history and soil acidity. There’s even the story of how Châteauneuf-du-Pape was originally sold as a vin de médecine thought to have medicinal value. Interesting! It could be a celebration to remember.
In 2019, packages, products or shelf tags embedded with Near Field Communication (NFC) chips, will begin to become more common, driven by growing consumer familiarity with contactless payment systems. As with NFC’s close cousin e-labeling, it offers manufacturers huge opportunities.
Global market for smart labels
- 2017 valued approx. USD 5.22 billion
- 2018-2024 growth of 17.6% CAGR predicted
- 2024 predicted revenue end of 2024: USD 16.29 billion*
*Zion Market Research
As well as the obvious potential for upsales, future promotions, and community and brand building, it also means instant access to recall information and improved traceability.
NFC BEATS BOGUS BOOZE.
So, why Châteauneuf-du-Pape? Counterfeit alcohol is nothing new. In fact France’s first Appellation Contrôlée wine rules were introduced in 1923 specifically to protect Châteauneuf-du-Pape from fraud, which could be why a Bordeaux winery was one of the first to use NFC tags. But today’s statistics on alcohol fraud make for sobering reading.
- 12% of all alcoholic drinks sold globally are said to be counterfeit
- Total value of counterfeit alcohol production worldwide: USD 1 billion
- By 2026, at least 5.5 billion wine & spirit closures will be NFC-enabled to protect the market from counterfeits.*
*Market-research firm Vandagraf International
So in 2019, with counterfeiting being such a common problem, NFC will initially be driven by food and beverage brands like luxury alcohol. But as with smart labeling and e-labeling, the more products do it, the more cost-effective the technology will become. In 2019 we’ll see all three technologies rolling out big changes in mass- as well as top-end brands. Consider Unilever as a good example of where we are headed. Over 1,700 Unilever food, beauty and personal care products already carry SmartLabels, letting consumers download an app to learn more information about the products, their value and their provenance. And this is only the beginning.
The War on Plastic will drive the rapid development of new bioplastics and simpler environmental labelling
On November 7, Collins Dictionaries announced that its word of the year was “single-use”, underlining what a landmark year 2018 was for plastic. The EU’s approval of the ‘Reis Report’ in October 2018 committed Europe to banning all single-use cutlery, cotton buds, straws and stirrers from 2021. And way more. But it was Belgian politician Frédérique Ries’ simple warning that really stuck: “If we don’t take action, by 2050 there will be more plastic than fish in the oceans.” The War on Plastics had begun.
In 2019 the war on plastic will have two major impacts on process manufactures: The first in the types of packaging material they use. The second in the way they categorize and define materials.
IMPACT 1: THE RACE FOR NEW BIOPLASTICS
40% of the 300 million metric tons of plastic we produce annually is used for packaging. Much ends up in landfill or the environment. 2019 will see the demand for new bioplastics rise sharply. Made of renewable raw materials like starch, vegetable oils and cellulose, in 2019 we’ll see new urgency and investment in developing bioplastics.
The current market for bioplastics is valued at about USD 28 billion, expected to rise to 300 billion within 10 years. But the events of 2018 suggest it will probably be more. With public demand, awareness and knowledge growing, 2019 will see investors, major manufacturers, retailers and government bodies all commit more time and funds to developing new bioplastics. The race is on.
IMPACT 2: CLEARER ENVIRONMENTAL DEFINITIONS
When is ‘biodegradable’ not biodegradable? According to new EU regulations, when it’s ‘OXO-biodegradable’. OXO-biodegradable plastics were developed to biodegrade more quickly than conventional plastics, especially in the open environment. But they still contain long chains of plastics that accumulate in the environment as microplastics, despite technically being ‘compostable’.
The distinction shows how tricky current environmental definitions are. Terms like ‘biodegradable’, ‘compostable’, ‘recyclable’ and ‘recoverable’ can easily mislead many consumers (and even some producers). There are seven global plastics categories now. Yet many are mutually exclusive. It’s almost impossible for consumers to fully understand each definition. Or know for sure that when they buy something labeled “recyclable”, it will be. In 2019, public demand will drive clearer regulatory classification. Take “OXO-biodegradables”, commonly used in plastic carrier bags. Though classified and marketed as ‘biodegradable’ and ‘compostable’ by many for years, in 2017 a large group of scientists, environmental groups and manufacturers (including Nestle, Pepsi and Unilever) backed a call to ban them as ‘biodegradable”. The EU subsequently banned them. And many US city governments too have heavily taxed plastic bags or banned them outright—including Washington DC, San Francisco, Seattle and Boston.
Plastics have a crucial role to play in extending shelf life and reducing food waste, among many other uses. But wise process manufacturers would do well to start planning for more bioplastics and alternative packaging solutions sooner rather than later.
The green dollar will flex its muscles, driving more retailers to make it mandatory for manufacturers to prove their sustainability
In 2018, the green dollar, the green euro, and the green yuan flexed their muscles. In 2019 they will keep flexing. There will be two major impacts for process manufacturers.
IMPACT 1: SUSTAINABILITY DRIVES GROWTH
The growth figures for sustainalbe products speak for themselves. Let’s take two basic commodities:
Chocolate: market growth 2017 – 2018
- Overall growth: 3%
- Growth in Fair Trade products: 10%
- Growth in No Artificial Ingredient products: 16%
- Growth in Environmentally sourced chocolate: 22%
Coffee: market growth 2017 – 2018
- Overall growth: 4%
- Growth in Fair Trade products: 21%
- Growth in Environmentally sourced coffee: 25%
In 2019 this kind of growth will drive more retailers to insist that manufacturers join sustainability schemes that monitor and verify sourcing and production. Study after study shows that younger consumers will happily pay more for sustainably sourced products. And at the same time, the number of sustainability groups is growing too—enabled by digital communications and networks.
IMPACT 2: EVERYONE WINS. REALLY.
Almost every product and industry has its own active sustainability trade group now. All driving sustainable processes and sales. From the Roundtable on Sustainable Palm Oil to the Sustainable Phosphorous Alliance to the GC3 Sustainable Chemistry Alliance. And as this list shows, when it comes to sustainable sourcing we are not just talking artisan products, brands, foods or fashions. From mainstream warehouse outlets like B&Q to Walmart’s sustainability index, our ideas of what kinds of products and retailers are sustainable are changing. Forever. And 2019 will see that change really take off.
As the chocolate and coffee sales numbers above show, this is potentially an Everyone Wins scenario: From the growers to the processors to the retailers and even, as prices for sustainable goods fall with the extra sales volume, back to the consumers themselves. Everyone wins, and it all begins in 2019.
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Photographer: Dan Dalton