Smart Label Technology in The Beverage Market

When it comes to smartphone use, consumers are finding that the amount of time they spend on their smartphones is increasing. According to The Nielsen Total Audience Report, April 2020, nearly half (46%) of the time adults ages 18-34 spend on media is on their smartphones. Considering the amount of time consumers spend on their smartphones, brand owners are looking for more ways to leverage this engagement beyond social media channels.

Consumers have endless access to the Internet via their smartphones. Smart packages allow brands to connect with consumers wherever they are, giving them more information at the touch of their fingertips. They also allow brand owners to collect data about their consumers and supply chain.

For beverages, labels and packaging have limited space for content. With a simple scan, smart labels can expand package content to provide consumers with recipes, additional product information (nutrition facts, recall instructions, etc.), promotional/seasonal content, interactions, and more. For labels and packaging using VR (virtual reality) and AR (augmented reality), this is an opportunity to enhance brands by bringing products to life to tell a story or animate characters. We are already seeing some of these applications in the wine and liquor market.

Experts say the emergence of the epidemic has adjusted the way consumers shop, which in turn has increased the adoption of smart label technology.

"This has forced a change in consumer behavior, prompting retail models to evolve rapidly and accelerate their digital transformation initiatives so they can capture their share of digital growth while offering new ways for customers to shop. These digital and non-touch initiatives have led to the rise of smart labels, such as automation and digital inventory, enabling increased traceability and transparency in the supply chain, as well as a more non-touch experience for consumers.

"The epidemic has accelerated the adoption of contactless technologies, including near-field communication (NFC). We have seen increasing adoption of this technology as a means of pre-sales consumer interaction, click-to-pay technology and many after-sales services. After-sales services include many use cases, such as product usage instructions, rewards/coupons and customer loyalty programs."

While smart labels can offer a plethora of benefits to brand owners, experts point to the security aspect as one of the most appealing features. Experts highlighted the role smart labels play in security measures in the beverage market. In addition to brand owners being aware of the benefits of smart labels, consumers also recognize the safety and security they can provide.

Studies show that consumers are willing to spend more money on products that tell them where their ingredients come from. This demand for transparency and traceability is a trend that brands and retailers are designing around to strengthen their supply chains while also providing more information to their customers.

Brand protection is a key driver for NFC technology - especially when the product is a consumable. The focus on product authentication is directly related to the urgent need to protect the overall health of the consumer. Embedding NFC tags on the back of labels provides an opportunity for seamless interaction. Providing this level of assurance at a fraction of the cost can create a higher level of brand protection and increase the lifetime value consumers place on a brand.

As smart labels gain traction in consumer products, experts say the technology's adoption in the beverage market bodes well for a promising future.

The beverage market is rapidly gaining traction as brands become more flexible in providing digital solutions. The outbreak has certainly exposed the need for such flexibility in the supply chain.

Experts note: "Smart labeling is still in an emerging phase in the beverage industry. We're seeing more creativity from AR and VR technology in the wine and spirits market. Our customers are leveraging embedded label codes for functional uses such as store checkout scanning to improve throughput and supply chain tracking. As costs come down, we expect a wider adoption of various technologies such as NFC."

When it comes to using smart tags, experts stress the importance of remembering the consumer. "The simpler the technology is for the consumer to use, the more engagement the brand will get from the consumer."