How do you know that what’s inside your package is safe? This is a question the packaging industry is taking seriously. Counterfeiting and diversion—the act of derailing a product from its expected course—within the packaging industry is rampant, said Joe Belenardo, senior vice president at Systech, at Pack Expo 2019.
During his breakout session, “Your Existing Packaging Is Already Connected,” Belenardo shared stark realities surrounding this cancer to the industry. For example, $1.7 trillion is lost annually to counterfeiting and diversion. “It’s a criminal enterprise,” he says. “And the bad guys are getting good at it.” While speaking Monday at one of the expo’s three Innovation Stages, Belenardo asked the audience: Why do brands keep spending billions on analog solutions, such as additive anti-counterfeiting packaging, when we’re operating in a connected digital environment?
Belenardo then showcased Systech’s nonadditive patented technology, which uses packagers’ bar codes to exploit unique microvariances. He also commented on why digital, nonadditive anti-counterfeiting measures might be especially appealing to paper packagers.
“Sustainability is one of the great motivators for brands to look at paper packaging,” he says. “Knowing that there is a cutting-edge digital product protection solution that the brand is using that is delivering environmentally friendly authenticity, safety and connectedness for the product could be quite compelling.”
Before and after his presentation, How Life Unfolds® had a chance to ask Belenardo some questions related to packaging security and its future. Here’s what he had to say.
Q: What do you see as the most significant threats today?
A: I believe that the biggest concern is that brands are adding multiple layers of protections to packaging, and counterfeiting is still a gigantic problem. It simply isn’t going away. The technology now available to counterfeiters to make counterfeit packages look credible is cheap and easy to obtain.
Q: What package markets are most frequently targeted by counterfeiters today, and why?
A: If you have a successful product, it will be counterfeited, and it’s a matter of “when,” not “if.” In pharmaceuticals, counterfeiting was so rampant that the United States and the EU have enacted policies directly targeting the black and gray markets through mandatory serialization and traceability. Elsewhere, cosmetics, perfumes, wines, spirits and other consumer products are extensively being counterfeited. There are significant issues in industrial supply chains as well.
Q: What solutions do you see as the most promising in preventing counterfeiting and diversion in packaging?
A: It will take a blend of overt and covert mechanisms that continue to evolve, and possibly even work together, to stay ahead of the counterfeiters. We believe that our ability to derive a digital e-Fingerprint from existing packaging bar codes will be a key capability for brands in fighting rampant counterfeiting and diversion.
Q: What do you think is the next greatest challenge to solve in protecting packagers in this space?
A: I believe getting the entire supply chain and retail involved is essential. Getting the data capture mechanisms in place, along with the necessary data integrations along the supply chain, and bringing information back to brands needs to happen at a widespread scale. Often, products leave a manufacturer, and no downstream data comes back telling the brand about how their products moved through the supply chain. We see interest in better track and trace solutions being deployed to address this visibility issue.
Q: For paper-based packagers looking to safeguard their consumers, what first steps would you suggest they take?
A: The first step is a comprehensive evaluation of what issues the brand is facing in the marketplace. We need to pinpoint and prioritize the scope of counterfeiting and diversion that is taking place. This is often difficult without the solutions we’ve been talking about. But brands typically have field personnel who have investigated issues, legal and IP team members who have been involved in internet copyright and shutdown scenarios, supply chain partners who have reported trouble. The data is there, it just needs to be consolidated.
Getting consumers involved in the possibilities of crowdsourcing product authenticity and security is an exciting opportunity for brands. Getting thousands, perhaps millions, of individuals interacting with products and verifying their authenticity [via the package] would be the ultimate in brand protection. Think of all the data that could be used for better analytics brands could take advantage of if this was happening. Everyone has a smartphone—why not leverage that fact for better brand protection?
For all our coverage from the show, go to How Life Unfolds® at Pack Expo 2019.