Near field communication (NFC) is a method of wireless data transfer which detects compatible technology close to it.
When used with packaging, NFC technology can offer a range of benefits from interactivity to safety and security; factors which are contributing to a surge in the market.
NFC tags contain unique identifiers which can be embedded into packaging to grant consumers more interactivity, better security, and the ability to trace more effectively, enabling packaging companies to offer improved customer service and product safety.
Why has NFC been on the rise?
The NFC market has already seen a sizable growth over the last few years. According to research by Global Intelligence and Insights, the global NFC market was valued at $4.78bn in 2015 and is expected to be worth $47.43bn by 2025, growing at a CAGR of 27.2%.
Smartphone integration and low price have been important factors in the NFC market growth according to Luca A. Zerbini, the former vice president of marketing, innovation, and sustainability at Amcor and current CEO and managing director at Fedrigoni Paper.
“I would say there are a few key drivers,” says Zerbini. “NFC is now available both on Apple iOS and on Google Android, so our phones recognise them automatically without needing to install an app. As well as this, the price of NFC has become a lot more affordable.”
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By GlobalData“We are seeing a rise of customer and consumer needs in terms of safety.” he continues. “For example, NFC can be used for anti-counterfeiting and track and tracing – which can be done much better and more reliably with NFC than other solutions like watermarks or codes.”
NFC tags protect against counterfeiting and enhance security
Counterfeiting has been a consistent problem across multiple industries for years. In 2019, the European Union Intellectual Property Office (EUIPO) released a study which revealed that counterfeited products account for 3.3% of all world trade.
One of the most affected industries is the pharmaceutical industry. The World Health Organisation (WHO) says that between 8% and 15% of medication sold internationally is fake or not of the correct standard. During the Covid-19 pandemic, products such as hand sanitiser and anti-viral medicine have been targeted.
NFC tags, however, feature unique authentication codes that cannot be duplicated, meaning that packaging cannot be cloned and can be verified by a third-party server. The tags also offer increased security, as NFC allows consumers to track packages through the supply chain on their smartphones and access information about their packages.
By implementing NFC technology into packaging, consumers and companies can easily trace a package and see where it is in the delivery process by using geo-location and cloud-based monitoring.
Because of its traceability, NFC-enabled packaging can also assure that products are not sold outside of the approved supply agreements; something which is referred to as the ‘grey market’.
“Smart packaging has the potential to make a real difference in the grey market” explains Gillian Ewers, the VP of marketing at electronics company PragmatIC. “For example, when goods are bought in a low-priced region or country and then sold in another, where they command a much higher price, or for goods that are meant for use in service outlets but appear on supermarket shelves.”
“Whilst it is not illegal to buy from grey market sources, consumers often find the experience less than satisfactory,” says Ewers. “This presents safety concerns for consumers and potentially bad publicity for the brands as well.”
Increased safety for the pharmaceutical industry
As well as being able to combat counterfeit products, NFC tags can also detect tampering, which is vital in the pharmaceutical industry.
“The moment the NFC antenna is broken, that product is identified as consumed or compromised,” explains Zerbini. Tampering with medication can lead to medicinal abuse or theft and resale, especially in the case of pain killer medication like opioids, so it is important that packaging for pharmaceuticals are tamper-resistant.
Another benefit that NFC provides the pharmaceutical industry is through its ability to protect temperature-sensitive medications, such as vaccines. NFC labels can be created with temperature sensors and data loggers, which can help monitor temperature and alert a cloud service should a problem arise with the product.
Pharmaceutical packaging companies are looking to NFC for these benefits and more. For example, Graham Howieson, the head of innovation and digital at Origin, explains how the UK-based pharmaceutical packaging provider plans to use NFC packaging in 2021.
“NFC is proven technology, which is robust, scalable, and easy to deploy,” says Howieson. “We are currently in the process of developing a fully integrated RPM [remote patient monitoring] system, which will be designed to record the adherence level of patients when taking tablet medication.
“At the heart of our system will be Smart X, which will be a digital wallet,” he explains. “The transmission of data will utilise NFC, offering patients across all age groups a simple user experience.”
What the future holds for NFC Packaging
Lower costs and consumer expectations will continue to drive the NFC market in 2021 according to Zerbini.
“Overall, we will see more applications of NFC packaging moving beyond its current popular industries, such as pharma, tobacco, and spirits, to more commoditised industries like snacks and confectionary, yoghurt, meat, and cheese,” he says. “NFC packaging can be used, not only with short term promotions but also for loyalty programmes. NFC can also be used to ensure the appropriate disposal of a pack and favour the circular economy.”
NFC packaging is prepared for growth across sectors but is also set to see a larger growth in the pharmaceutical industry, according to Howieson.
“The next area to benefit from NFC technology, I believe, could be pharmaceuticals since, here, NFC has a growing number of profitable and sustainable use cases,” says Howieson. “The pharmaceuticals industry is in a favourable financial situation.”
Howieson adds that, while NFC packaging is preparing for growth, there still will remain growth in counterfeit products.
The NFC-enabled packaging market will continue to grow during the coming year due to a strong cross-sector focus on safety and security. Packaging that uses NFC offers enhanced interactivity that, by protecting against counterfeiting and tampering, can help protect both businesses and consumers.
