JULY 2016MARKET INSIGHTS

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PACKAGING

SOUP-PRISE & DELIGHT

CLEARLY CAMPBELL’SThe world’s largest producer of soup, Campbell Soup Company, recently redesigned its single-serve microwavable products in response to market research, discovering that consumers literally want to see the contents of their soup on supermarket

shelves. In response, Campbell created translucent packaging—a clear bowl and overcap, with a lid of transparent peel-able film underneath—to replace its opaque-white bowls, aluminum pull-top lids, and red overcaps. The new packaging consists of four components: a thermoformed, clarified polypropylene (PP) bowl and a flexible, easy-open film lid with silicon oxide barrier coating manufactured by Silgan Plastic Food Containers, a clarified PP snap-fit vented overcap from Tech II, and a clear PETG shrink film label from Pentalabel. The new packaging format is now in market on more than 30 microwavable varieties from the company’s four line extensions: Campbell’s Classic, Campbell’s Chunky, Campbell’s Healthy Request, and Campbell’s Homestyle.1

SOUPY START-UP

California-based challenger brand LonoLife hired design firm Ideas that Kick to design recyclable K-cup pods (used in Keurig brewing machines) and develop supporting brand positioning for their all-natural broths, the goal being to help the brand stand for something more than a “broth in a K-cup.” Since competitor Campbell Soup had already launched their K-cup soup packages, LonoLife was able to avoid the consumer-education hurdle associated with new-to-category packaging and, instead, focus on establishing meaningful positioning beyond convenience. Instead, LonoLife targets Paleo dieters, Millennials, and early adopters looking for new uses for their K-cup machines by highlighting its key competitive differentiators: robust flavor, high protein value, and lower sodium than other mass-market broths.2

Although healthy, convenient foods continue to gain momentum with

consumers, the relatively popular but mature soup category simply

isn’t sexy. As a result, established food companies with a stake in

the soup category are focusing on packaging and brand messaging

to drive growth, while new entrants look to leverage packaging as a

means to building a profitable niche business.

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PACKAGING

FIGHTING Pharma Fraud

GENOME GUARDIAN Applied DNA Sciences, Inc. (ADNAS) verified that its SigNature DNA markers can be authenticated on pharmaceutical tablets and packaging materials alike, a valuable tool to protect supply chains against counterfeits. In ADNAS trials, the DNA markers were created from botanical genomes and added to pharmaceutical-grade inks provided by Nissha Printing Company and KishuGiken Kogyo Co. Ltd. Unique DNA codes can then be produced and manufactured in an “infinite quantity depending upon demand.” The SigNature DNA markers are also compatible with varnishes, making them suitable for printing and hot-stamping applications, as well molding and extrusion in other materials. Interestingly, the DNA markers could potentially be added to the product itself as an additional security measure beyond packaging.

To aid in the authentication process, ADNAS created an optical detection device that, under ultraviolet light, fluoresces to confirm the presence of the DNA marker. Because the device captures the response to the UV light and seeks to match it against a library of responses, counterfeiters would have a difficult time duplicating a marker that would pass the test. Although the company developed the device as a handheld reader, future plans include developing a system that can read the marks at packaging-line speeds.4

SECURITY SUITEThe partnership between CertiRx Corporation and IN2trace Ltd recently yielded TraxSecur Serialized Security, a comprehensive technology suite that combines authentication and serialization. The TraxSecur suite helps prevent product diversion and confirms product authenticity, while also helping provide visibility into supply chain performance and collecting

business intelligence. Pharmaceutical packs are given high-security marks created with proprietary shapes that carry specific codes. Each code can be unique to a package, SKU, batch, and/or the manufacturer. Identification data is then managed in a private or licensed cloud, using encryption at the highest level of security. TraxSecur does not require special inks or taggants, validation hardware, or special coding printers; it can also be applied to packages using common packaging equipment and serialization systems.5

In some countries, up to 70 percent of drugs in the supply chain are

counterfeit. Globally, more than 10 percent of pharmaceuticals have been

estimated to be counterfeit, with supply chain diversion causing additional

concerns about authenticity.3

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SUPPLY CHAIN

AUTOMATED Alternatives

TRAINING THE NEXT

GENERATIONWynright Corporation, a subsidiary of Daifuku North

America Holding Company and a

leading supplier of intelligent material-

handling systems, along with its sister company Jervis B. Webb were recently contracted to provide automated warehouse technology for an innovative technical education program at Michigan-based Lansing Community College (LCC). LCC will use the Daifuku technology, including automated storage and retrieval (AS/RS) and conveying and sortation systems, for a new robotics and automation training center that supports the LCC’s new mechatronics technician degree program, the Center for Manufacturing Excellence (CME).

CME began with a grant from the Michigan Economic Development Corporation in 2015. LCC stated that the state’s retiring workforce as well as continued technology advances prompted the need to train a new generation of highly skilled automation technicians. The funds awarded by the Economic Development Corporation helped the college create the space and purchase the technology needed for the program. Grant funds also permitted LCC to expand learning space from 14,000 square feet to almost 27,000, as well as gave them the ability to modify existing engineering labs.

To ensure that CME engages its students with cutting-edge technical tools and skills for high-demand roles, the college invited 35 industry leaders from the region to serve as an advisory board. The advisory board subsequently recommended Daifuku technology for the supply chain curriculum. CME is scheduled to open in fall 2016 with training that includes a robotic assembly line in order to simulate a real-world environment. The program will focus on building the skills needed to understand manufacturing logistics beyond the plant floor, imparting knowledge of the logistics needed to get a product to its end users efficiently and profitably.7

As the economy improves and consumer spending increases,

unemployment levels have steadily declined, reducing

available labor pools and creating a strain on distribution

centers. It’s no surprise, then, that the inability to fulfill open

positions in warehouses has become a major issue in the supply

chain industry, with nearly 20 S&P 500 executives naming labor

shortage as a significant 2016 challenge.6 Will the efficiencies of

warehouse automation help or magnify the current labor gap?

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SUPPLY CHAIN

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BARCODE BENEFITSWarehouse management solution company Scanco’s recognition of the cost of human error on operational efficiencies fuels the company’s focus on barcoding automation and, as a result, improves bottom lines. The company states that its Sage 100 barcoding systems yield significant benefits to customers, including precise inventory control, improved cash flows, waste reduction, faster and more accurate data, and better tracking of supplies and equipment.

The company’s latest software tool, Scanco Warehouse, is a mobile inventory-management solution that integrates with Sage 100. Scanco Warehouse collects real-time data across devices so employees can do physical counts using a mobile device, as well as transfer inventory, select and create inventory batches, and inquire about specific inventory items. The software was designed with flexibility in mind, allowing

customers to integrate additional tools like Advanced Shipping, Scan Each, and

Batch Select to build a customized, comprehensive

warehouse solution scaled to deliver exactly what that

customer needs.8

JAPAN’S ROBOTICS REVOLUTIONJapanese Prime Minister Shinzo Abe sees robotics as an “elegant way to handle the country’s aging populace, shrinking workforce, and public aversion to immigration.” More specifically, Japan’s current labor shortage is pushing the need for more extreme efficiencies as Japanese companies struggle to find skilled workers, even on a part-time basis. The government recently launched a five-year initiative to reinforce and strengthen the use of intelligent machines in supply chains and manufacturing, among other industries. Abe’s goal also includes expanding the robotics market from 660 billion yen to 2.4 trillion yen by

2020, in addition to leveraging robots as a means to cut factory labor costs by as much as 25 percent by 2025.

Wholesale pharmaceutical company Toho Holdings Co.’s 10-billion-yen distribution center serves as an excellent case study for Japan’s robotics revolution. The center employs 130 workers, approximately half the number of workers found at other similarly sized centers, yet employee productivity is 77 percent higher with robots handling approximately 65 percent of Toho’s item picking.

Depending on the type, size, and weight of an item, industrial robots alter which pads it uses, how fast it moves, and where it puts the item. The robots can pick up to about 10,000 items per hour with almost perfect accuracy. By adjusting the timing of the conveyor belts, the whole system can mix different products and make orders for individual customers, thus redirecting the role of human employees to less strenuous work like opening cardboard boxes and taking out items for the robots to handle. Due to the success of the current distribution center, Toho plans to build an 11-billion-yen warehouse in Hiroshima in a few years.9

MARKETING

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KEYBOARD Campaign

CAMPAIGN FOR CHANGEDiageo’s famously dark-colored Irish stout beer, Guinness, used the lack of an appropriate smartphone emoji (available emojis were light-colored beers) to rally its fans. The brand published a letter asking for support for the creation of a dark-colored beer emoji, including the statement: “We don’t live in a one-beer world, and we deserve more than a one-beer keyboard.” Fans were also asked to tweet the following appeal as part of a Saint Patrick’s Day push for inclusion: “I want more beer variety on my keyboard. Add a #DarkBeer emoji, @Unicode. #Stoutmoji.” Unfortunately, the Unicode Consortium—the nonprofit organization that develops and regulates international software standards, including emojis—did not approve the “stoutmoji” in its latest round. Rather than develop a customized set of branded emojis (a much faster route to realizing the “stoutmoji”), the brand will continue rallying for

the dark-colored beer emoji as part of its longer-term social media marketing efforts.12, 13

FAN-TASTIC LANGUAGEAutomotive manufacturer Toyota also jumped on the emoji marketing bandwagon, creating sports-themed emojis, or FanMojis, when they noticed an opportunity to go beyond generic sports images by tapping into avid fans’ uniquely emotional language. The company created its FanMoji keyboard featuring hyperspecific sports emojis—a happy fan, a crying fan, a cheerleader, a referee, touchdowns, interceptions, sacks, and more—to tap into fan enthusiasm and passion for various sports. Although the majority of the custom-created emojis don’t include direct Toyota tie-ins, fans can only access the FanMoji keyboard through a heavily branded Toyota app.14

Brands attempting to capture the prized Millennial demographic must

now learn a new language. According to a recent marketing study, nearly

four out of every 10 Millennials would rather engage with pictures than read,

with the shift to pictorial communication being led by emojis.10 Unsurprisingly,

emoji use has increased by 775 percent year over year in mobile and email

marketing campaigns, and in 2016, emoji marketing has demonstrated a 20

percent increase each month.11

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RECYCLING

HEALTHCAREPlastics Recycling

PILOTING PROGRESS In response, the Healthcare Plastics Recycling Council (HPRC) and Society of the Plastics Industry (SPI) launched the 100 Tons Project, a multihospital plastics recycling project in Chicago. The goal is to recycle 100 tons of noninfectious plastic from March to November 2016, with an ultimate vision of creating a viable business model and best-practices guidelines for the industry. Materials to be recycled will include polypropylene and polyethylene resins, which includes packaging materials (rigid and flexible), sterilization wrap, Tyvek and irrigation bottles, as well as basins, pitchers, and trays. One unforeseen challenge? The

cost of making new plastics has dropped along with oil prices, making it less enticing for manufacturers to use recycled plastics.17 HPRC believes, however, that the pilot project will still be successful given the minimal cost of recycling for hospitals and a growing desire from medical personnel to support recycling for environmental reasons.

PARTICIPATING PLAYERSPilot hospital partners include Advocate Illinois Masonic Medical Center and NorthShore University HealthSystem in Glenbrook, Evanston, and Skokie. Logistics for the pilot will be handled by Waste Management of Illinois, Inc., Antek Madison, and LakeShore Recycling Services. Additional support will also be provided by Key Green Solutions LLC, which will manage data collection and project metrics. To further support the pilot, HPRC is providing resources to area hospitals to help create a recycling-friendly culture, including case studies, checklists, and presentation templates so medical personnel interested in starting a hospital plastics recycling program can build a strong business case for decision makers.18

Healthcare waste in the United States alone has been estimated at about 14,000

tons daily, with another statistic reporting one million tons of potentially recyclable,

noninfectious plastic waste generated by more than 5,000+ US hospitals. Practice

Greenhealth, a Virginia-based nonprofit dedicated to advancing positive environmental

solutions for the healthcare sector, states that, although 83.6 percent of their

member hospitals have clinical plastics recycling programs in operation, 66 percent

are collecting 40 percent or less of available recyclable materials.15, 16

RECYCLERS

BRAND OWNERS

EQUIPMENT & MOLD MAKERS

MATERIALSUPPLIERS

PROCESSORS

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www.havigs.com

Credits1Reynolds, P. (2016, April 4). Campbell Goes for Product Visibility, Packaging World. Retrieved from http://www.packworld.com 2BrandPackaging.com. (2016, February 29). Challenger Soup Brand to Become a Contender with New Packaging, Brand Packaging. Retrieved from http://www.brandpackaging.com 3LaTorre-Snyder, M. (2016). Keeping Counterfeit Medicines Out of the Supply Chain, Pharmaceutical Processing. Retrieved from http://www.pharmpro.com 4Allen, D. (2016, April 6). Turning to Nature to Fight Counterfeiting, Packaging Digest. Retrieved from http://www.packagingdigest.com 5HealthcarePackaging.com. (2016, April 5). CertiRx Corp., IN2trace Ltd Announce Partnership to Combat Counterfeits in the Supply Chain, Healthcare Packaging. Retrieved from http://www.healthcarepackaging.com 6Rentschler, T. (2016, March 7). Will 2016 Be the Year Warehouse Automation Fixes Your Labor Shortage?, Supply Chain 24/7. Retrieved from http://www.supplychain247.com 7RoboticsTomorrow.com. (2016, April 4). Daifuku Warehouse Automation Technology Selected for Innovative Robotics Training Center in Michigan (press release), Robotics Tomorrow. Retrieved from http://www.roboticstomorrow.com 8Scanco.com. (2016, May 10). Sage 100 Warehouse Automation Reduces Error, Saves Money, Scanco. Retrieved from http://www.scanco.com 9Nohara, Y. (2015, September 15). In Japan, the Rise of Machines Solves Labor Shortage, Bloomberg. Retrieved from http://www.bloomberg.com

10Ember, S. (2015, September 27). Brands Woo Millennials with a Wink, an Emoji or Whatever It Takes, New York Times. Retrieved from: http://www.nytimes.com 11Nelson, J. (2016, March 28). Email Marketing on the Rise, Media Post. Retrieved from http://www.mediapost.com 12FandBNews.com. (2016, March 9). Guinness Aims to Add Stout Emoji in Celebration of St. Patrick’s Day (press release), Guinness. Retrieved from http://fandbnews.com 13Wohl, J. (2016, April 7). How Marketers Can Win the Great Emoji Arms Race, Advertising Age. Retrieved from http://adage.com 14MobileCommerceDaily.com. (2015, November 18). Toyota Delivers Secret Emoji for Twitter Tailgate Party Fun, Mobile Commerce Daily. Retrieved from http://www.mobilecommercedaily.com 15RecyclingToday. com. (n.d.). HPRC Targets Plastic Medical Scrap, Recycling Today. Retrieved from magazine. http://recyclingtoday.com16PracticeGreenhealth.Org. (2015, March 16). Setting a Plastics Recycling Benchmark (Press Release), Practice Greenhealth. Retrieved from https://practicegreenhealth.org 17Gelles, D. (2016, February 12). Skid in Oil Prices Pulls the Recycling Industry Down with It, New York Times. Retrieved from http://www.nytimes.com 18HPRC.com. (2016, March 23). Healthcare Plastics Recycling: Making It Happen at Your Hospital (press release), Healthcare Plastics Recycling Council. Retrieved from http://www.hprc.org

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