Liquid Thinking

Smart packaging has been tipped as both a means to build stronger, more personal relationships with consumers, as well as helping to reduce waste and boost recycling. Yet, mainstream launches and large-scale rollouts have been few and far between. With mounting pressures to recycle, and increased competition as the cost-of-living crisis squeezes consumer’s disposable incomes, we ask should brands be doing more, and why hasn’t smart packaging fully taken off yet?

There’s something optimistic about ‘cutting-edge’ technology launches. It’s a yard stick for our best guess at what we think humanity needs at that moment in time. And there’s always big, lofty hopes for the solutions that they provide. But….. they don’t always work. Hands up if you own or have owned a ‘3D’ TV? Exactly.

So, what’s the deal when it comes to ‘smart’ drinks packaging? Its something we’ve heard a lot about, but in actuality, rarely seen, at least at scale.

Smart solutions have been knocking around for a few years now. And though they come in various forms (more on that in a moment) their purpose ranges from being able to accurately track a consumer’s consumption and purchasing habits, monitoring product quality, helping prevent counterfeits, to more eco solutions, such as reducing the need for certain packaging, to helping sort it so it can be better recycled. At its heart, smart packaging promises accuracy and connectivity, helping brands better understand, communicate with, and cater for their consumers. And for the consumer, well it should provide convenience.

What is smart technology?

To highlight just a few methods that are most relevant to drinks, let’s start with connected bottles. Using near-field communication (NFC) or radio frequency identification (RFID) embedded in the label, these bottles allow consumers to access further information using their smartphone, unlocking unique digital experiences.

Next, there’s blockchain labels, which each have a unique individual identity. QR codes are already being used by brands to offer consumer access to more information about a product or brand world, and can be used to access the information on the blockchain.

Like other forms of blockchain, the information it contains cannot be changed once created. Its main perks are offering traceability right through from production to consumption. So far, this has mostly been used by producers, rather than being consumer-facing. However, with consumers becoming more concerned with traceability, it has potential to be used to allow them to follow certain vintages and track production, or to assure them that a product is genuine. However, hard to blend with the rest of a label design, they also possess one of the great Achilles heels when it comes to smart packaging; they require consumers to want to scan them.

Next up, augmented reality (or AR, not to be confused with VR, virtual reality) labels intend to blur the physical and digital worlds. Again, accessed by consumers using their phone, AR allows brands to fully submerge consumers in their brand world with animations, imagery, videos and more. The downsides are that consumers will generally need to acquire a specific app in order for it to work, as specific AR designs often require specific software.

Who has been using it?

In their earliest incarnations, brands that seemed to have been the most ambitious in their applications of the new technology largely concentrated on the individual serve moment, rather than emerging consumers in their brand world en-masse.

As early as 2012, Evian was trialling one-push button technology, allowing consumers in Paris to re-order water by pressing the button on a fridge magnet. However, no longer in existence, it never rolled out beyond Paris.

Around 2016-17, connectivity was growing in importance as more brands dipped their toe in the water. But one of the most interesting examples comes from Pernod Ricard, who launched their 'Coco-nect' cups for the Malibu brand. Using the internet of things (IoT – go on, Google it) technology to connect with the brand’s coconut cups, when a user twisted the base of a cup it automatically ordered them a refill. Sending an alert and the consumer’s location to a bartender, the cup was designed to keep the consumer updated on the progress of their order, through colour changing lights and vibrations.

Bottle-based innovation

Since then, smart technology has been much more bottled-focused, and correlating with advances in smart phone technology, much more centred on being accessed individually. Treasury Wines created Living Wine Labels, whereby consumers could access the stories behind each of its wine brand worlds, through using a dedicated App. While Albertan beer ‘Bock Chain’ – created by a cluster of contributors including Last Best Brewing & Distilling – allowed consumers to trace all ingredients from field to can, using blockchain and accessed by a QR code on the label.

Meanwhile, e-Wak closures – caps that carry a unique digital identity and use NFC to communicate information to devices such as smartphones – have been used by Pernod brands from Jameson to Absolut. The connective closures allow the brands to communicate “one-to-one” with consumers according to Guala Closures who developed the technology for the brand. In a roll out in Texas and Ohio in 2019, Caitriona Murphy, Malibu’s Global Brand Manager, said: “Malibu has transformed its bottles into media touchpoints through the adoption of Guala Closures’ IoT solution, allowing conversation in a space that is notoriously saturated. Our bottles with connected closures help keep the brand relevant post-purchase, providing services and experiences to the consumer beyond the liquid itself. By transforming the one asset Malibu knows its consumers come into contact with, we’re able to connect with our target audiences on a much deeper level, through the experiences we offer”. All of which sounds like Pernod understand just how powerful a tool they have on their hands, if used correctly.

So, where are we up to now?

When might the ‘smart packaging’ revolution happen? So far nothing seems to have really landed that has changed the expectation and landscape of what packaging can do. While it’s true that smart packaging is slowly becoming more common, progress is still tentative.

Looking at 2022 thus far, there’s only a handful of examples. In January in the US and Canada, Soda brand Jones released an AR label series that lets consumers access a virtual fortune teller. The downside; consumers have to download a dedicated App.

And in April, vodka brand Tito’s marked its 25^th anniversary with AR that illustrates a four-part history of the brand from liquid to geographic origin, accessed via a QR code. The downside? The brand is incentivising the first 5,000 consumers who view all four parts and sign up to its email list, with a limited-edition bottle topper. Though Tito’s hopes to capture valuable consumer data with the launch, will consumers view the prize as worth their time?

In essence, since its inception, smart packaging to all intents and purposes, hasn’t evolved that much. Though technology is getting more powerful, and the business case to use smart packaging is getting stronger, brands still haven’t quite figured out how to most meaningfully, or at least most seamlessly use it in a way that blends best with consumer’s lives and habits.

What really drives engagement?

And in a world of ever-fragmented media, where it’s becoming more challenging to reach consumers, engagement has never been more important. In our digital age, the ability of static packaging alone to capture hearts and minds is limited. Brands need a forum to tell their story, and those that harness smart packaging most successfully will create a new space to do so.

However, there is a risk that brands are set to descend into an information grab when it comes to smart technology, something consumers are becoming increasingly savvy and averse to. With both Apple and Google both working to retire third-party cookies (the mechanisms by which advertisers track activity and tailor ads specifically to individual users based on their habits) brands are actively looking for new ways to track their consumers. Smart technology seems to offer some of the answers. Expect therefore, a ramp-up in the number of launches.

But, if smart technology is about delivering a smoother, more personal, more convenient interaction with a brand, it’s failing. So far the experience is still not streamlined enough for many consumers. Though the use of QR codes has been accelerated and normalised by the pandemic, how many consumers have the motivation to download a specific app to access more complicated branded content? How many too are willing to knowingly provide data in order to do so? The experience is still too clunky, and the rewards, not high enough.

Brands need to work with creative design agencies, to find new and compelling reasons to entice consumers to enter their digital brand worlds, engage with them, and keep them coming back. And though for some consumers, offering a deeper insight into a brand world is enough, for others it will take something much bigger. In order to attract consumers to the virtual world, brands need to better reflect and react to what’s happening in the real world.

Measuring and helping to reduce their environmental impact is just one example of tapping into a cause that matters to growing numbers of consumers. High value, exclusive giveaways or real-life experiences too, will increasingly matter as consumers limit their spending. An animated brand world, virtual bartenders, and bottle stoppers? Maybe not so much.

Interested in finding out more about what this might mean for you and your business?

Please contact us at hello@thecabinetagency.com or 0207 101 3939