Supply chain security has emerged as a business priority in the wake of the global pandemic, with many companies now keen to leverage smart packaging and coding print to enable more efficient, dynamic and responsive logistics, according to Smithers.
Smithers’ new market study, The Future of Track and Trace in Packaging to 2027, shows Covid has already accelerated demand.
Data shows that total value of taggants, RFID antennas, and coding print in these applications has grown by 76 per cent since 2017, and will be worth $1.6 billion in 2022.
According to the study, this reflects not only two years of unprecedented disruption, but also a new appreciation of the business efficiencies item-level tracking can deliver, especially in new sales channels.
Smithers’ in-depth commercial and technical investigation shows the upward trajectory is in no danger of plateauing, and forecasts that the market will experience a compound annual growth rate of +9.5 per cent through to 2027, yielding a total value of $2.5 billion that year.
Traceability features, including item-level tracking, are already mandated in higher risk segments, such as pharmaceuticals and medical devices, and the study found that healthcare will remain the biggest end-user market as mandated track-and-trace systems proliferate worldwide, with its value doubling between 2021 and 2027.
“These concepts and technology can be now be appraised, evolved and refined to bring the same security and efficiencies to other supply chains,” said Smithers.
“There will be rapid adoption of these track-and-trace technologies into multiple other consumer segments – food, drinks and cosmetics – that ship perishable or valuable goods.
“Direct-to-consumer sales in particular will benefit from the fall in pricing for individual tagging components, and the wider trend to replace physical retail sales with e-commerce delivery.”
The study found the most lucrative element of the track-and-trace market will remain industrial and transit packaging, where large unit packaging has long justified the cost of bespoke solutions, such as active RFID tagging.
Covid-19 disruptions have revealed the fragility of trans-national supply chains, and Smithers warned that while this threat is receding, it is not over yet, and when it does fade totally, the imperative to develop resiliency and flexibility for the future will remain.
In the short term, Smithers said the market will continue to rely principally on coding print – unique alphanumeric identifiers, 1D and 2D barcodes, etc. There will also be wider interest in on-pack RFID and NFC frequency antennas to provide more dynamic monitoring in more expensive applications.
Simultaneously, it was found that covert taggants will prove a popular option for brand owners concerned about counterfeiting.
The greatest potential was found to come from software systems that process product identities, with blockchain fast emerging as an affordable, scalable platform that can ensure security, transparency, and intelligent inventory management.
Software companies were found to be creating dedicated service lines to capitalise on this opportunity, and have been actively engaging with packaging and logistics company partners.
The early adoption of track-and-trace in pharmaceuticals and rising e-commerce shipments will see paperboard account for the largest share of this market, according to Smithers, and there will also be strong demand for tracking components that can operate with other common formats, including metal, rigid plastic, flexible plastic, and paper substrates.
