Theme impact

The impact of IoT on the packaging industry 

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The matrix below details the areas of IoT in which consumer goods, foodservice, and packaging companies should focus their time and resources. GlobalData suggests that companies invest in technologies shaded in green, explore the prospect of investing in technologies shaded in yellow, and ignore areas shaded in red.

Physical layer 

Companies in the manufacturing, online and in-store, distribution and logistics, and after-sales segments of the value chain should invest in the physical layer of IoT. For manufacturers and distributors, it can enable the tracking of goods and pallets. Radio frequency identification (RFID) and near-field communication tags can be used on physical items, facilitating after-sales support as these tags often redirect consumers to more information about the product and help them access customer support. RFID tags are particularly common among luxury goods brands, including Kering and LVMH, to prove authenticity and provide users with more information about the product. 

Connectivity layer 

Connectivity is not a layer in which companies from the consumer industries need to invest. They can outsource to a tech specialist, such as Amazon Web Services, rather than managing infrastructure requirements in-house. 

Data layer 

As IoT grows and develops, its sensors will generate even more data. Therefore, it is vital that all connected layers have networks with the necessary elasticity to manage big data so information can be effectively integrated, processed, and stored. 

App layer 

The app layer should be explored by the payments and after-sales segments of the consumer value chain, as this enables seamless transactions and in-app support after sales. 

Services layer 

Services have become a necessary addition to the IoT value chain over the last decade, as many IoT adopters lack the design, technical, integration, or data analysis skills to deliver a successful IoT implementation. 

How IoT can help address the challenge of ESG 

The breadth of data that packaging companies possess can provide significant opportunities to locate efficiency opportunities. Integrated smart systems, processes, sensors, data, and analytics are helping packaging manufacturers make smart decisions, automate processes, and reach efficiency and cost-saving targets. All of these come under the remit of IoT.  

Packaging companies increasingly use IoT in their factories to operate with greater efficiency and flexibility, allowing them to continuously monitor energy and water consumption.  

For example, Amcor uses IoT to improve its manufacturing operations' efficiency and reduce its environmental impact by identifying ways to save energy. Amcor’s sensors monitor the energy consumption of its manufacturing facilities, which are then used to identify ways to save energy, such as by adjusting the temperature of the facilities or by automatically shutting down equipment when it is not in use. The company is also using IoT sensors to track the environmental impact of its operations in the communities where it operates. This information helps identify ways that Amcor can reduce its environmental impact and improve its relationship with the communities in which it operates. 

Regulatory initiatives such as the EU's Sustainable Finance Disclosure Regulation (SFDR) and pressure from shareholders are pushing companies to disclose ESG-related data. The Industrial Internet is helping companies monitor air and water quality and collect greenhouse gas emissions data.  

According to the World Economic Forum, IoT, when combined with other technologies like 5G and AI, could help cut carbon emissions by 15%. Ball has partnered with, an AI software provider, to collect IoT data from 60 facilities worldwide and use AI to track, aggregate, manage, and report global energy use and company progress against Ball’s goal to increase energy efficiency by 30% by 2030.  

Similarly, ABB has also developed a model-based predictive emission monitoring system. The system feeds variables like temperature, pressure, and flow rate collected by smart sensors alongside historical data into a neural network to predict process performance. 

A significant amount of water is required during the manufacturing process, either during product creation or to cool equipment. Packaging companies are making a conscious effort to reduce the amount of water they use.  

One such example is Ardagh, a Luxembourg-based producer of glass. The company has implemented Water Flow Intelligence at two facilities in the US. Built on Ecolab’s Ecolab3D platform, IoT-enabled devices collect and transmit real-time data on water usage at an enterprise, plant, and asset level, which can be stored in the cloud and viewed using a dashboard.  

Wearable tech – a key part of the IoT ecosystem – is also used within factories to help improve worker health and safety. 

How IoT can help address the challenge of supply chain management 

Packaging companies increasingly prioritise customer experience, and smart packaging will establish itself as the norm within the next decade for quality control. Smart packaging allows consumer goods manufacturers to monitor the packaging environment and ensure the contents are not damaged.  

Smart packaging is typically used for perishable goods such as pharmaceuticals and fresh food, where a shift in the environment could breach the quality of the items. Smart packaging contains sensors that detect oxygen, carbon dioxide, and pH levels.  

The use of smart packaging depends on the type of item in transport and its specific needs. For example, fresh unpreserved goods with a short shelf life could benefit from smart packaging as it ensures food meets food safety criteria. 

Ten years ago, companies used radio-frequency identification (RFID) tags only on boxes or pallets of products. Today, using them on individual items, even relatively cheap products like value clothing and food, is viable.  

DS Smith uses Hanhaa’s ParceLive packaging tracking device, which allows users to track a package’s location, condition, and security throughout the supply chain in real-time. It provides data on whether a parcel has been dropped, opened, or tilted. It also tracks if the package gets wet or experiences a temperature change, which can be crucial for delicate food items.  

Smart packaging is typically backed by IoT-enabled reusable transport packaging (RTP) or Bluetooth low energy (BLE) technology. IoT-enabled RTP includes containers, pallets, crates, totes, and bins.  

RTP offers visibility of the supply chain via tracking and network collaboration. This can lead to both optimisation and lowering costs within the supply chain. BLE technology provides beacon tracking information and, dependent on the service provider, can have sensors that monitor light, temperate, and shock.  

BLE beacons that measure shock are viable for frozen goods, where temperature control is crucial, or fragile content, where users can monitor physical impact. 

GlobalData, the leading provider of industry intelligence, provided the underlying data, research, and analysis used to produce this article. 

GlobalData’s Thematic Intelligence uses proprietary data, research, and analysis to provide a forward-looking perspective on the key themes that will shape the future of the world’s largest industries and the organisations within them.