Innovation to Shelf – Part 2
In Part 1 – IP Trends in the Food Packaging Industry, we looked at the high-level patent data for the food packaging industry to better understand the big-picture filing trends and which countries and companies are most active. For Part 2 we are looking specifically at what is influencing innovation and what innovations are taking place within the market.
According to industry experts, the six key trends that will influence the food packaging industry the most in 2016 are digital printing, consumer demand for product information, flexible packaging, eco-friendly packaging, portion size, and connected packaging. The six trends listed are directly related to the broader topics of food safety/consumer health, food waste and sustainable packaging, and the application of the internet of things (IoT) or “smart packaging”. It is possible to deduce trends in the food packaging industry in these three specific topic areas by looking at the patents that have been filed in this space, and consumer and business trends.
From the food processing plant to the customer’s shelf, food packaging helps keep food in a clean, aseptic environment. To protect consumers, there are various governing bodies dedicated to food safety that conduct inspections on food packaging processes. In 2011, the Food Safety Modernization Act (FSMA) was signed into law to ensure brand owners were improving their internal processes to prevent instances of contamination. The law shifted the focus from responding to contamination outbreaks, to actively preventing them. Some of the innovations we looked into were specifically focused on preventative innovations.
According to a market report by Intense Research, increased health awareness is one of the main factors driving the growth of the packaged food market and food contamination is one of the main hindrances to market growth. By proving that they have a high standard of cleanliness, packaging companies help halt the spread of bacteria, protect their customers and save substantial sums of money by not having to recall and destroy stock that has become contaminated. Outbreaks of E. coli and other bacteria in the past have shown that standards of cleanliness have not always been high enough. A recent case that hit the headlines was an E. coli infection linked to General Mills flour products, which has led to a full recall that was announced on May 31, 2016. In a recent press release, General Mills announced they would be using new whole genome sequencing techniques to trace illnesses. Another very recent example of insufficient packaging cleanliness was Lytham Food’s Freshbite wraps which were found to contain the bacteria Clostridium botulin which can lead to food poisoning. Lytham Food’s has had to ask customers to return the affected products.
Detecting the bacteria prior to an item leaving a plant, or better still, destroying the bacteria before it is able to spread, ensures companies avoid costly recalls and maintain brand loyalty by showing how far they’ll go to make sure their products are healthy to consume. Cornell University researchers are currently working on microbe-resistant coatings that should be commercially available in the next few years. These coatings inactivate the microbials which make contact with it and prevent the microbials from adhering to the surfaces. This coating technology can be used on surfaces that food has direct contact with as well as door knobs and surfaces that food facility employees touch.
Agplus Technologies is a recently formed company spotted in our patent data in Part 1 (and included in Figure 3). They have patented their nanosilver membrane and coating technology which also has antimicrobial properties and can be incorporated into bottles. In doing so, drink containers are kept clean and the drinks are less likely to be contaminated.
In line with proof of cleanliness, ensuring contents are properly sealed is another concern. The pressure, humidity, temperature and atmospheric constituents of modified atmosphere packaging (MAP) containers can be set to specified levels. The benefit in doing so is that the contents can be preserved for longer, extending the expiry date and making sure that the food is in a healthy, edible condition when taken out of the packaging. Reducing the amount of food that goes bad before it can be consumed, reduces the amount of stock that has to be disposed of and subsequently reduces revenue loss. A prime example of a company filing patents in this area is Sealed Air (seen in Part 1 Figure 3) who take a holistic approach to ensure that their food products are kept in the best possible vacuum sealed condition throughout the supply chain to improve hygiene levels and the shelf life of their products.
Snacktops is a company in the package sealing technology space which we came across while carrying out the patent mining. As is evident from their position in Figure 3, and emphasised on their website, they are focussed on innovation and have made a concerted effort to grow their patent portfolio. Their products attach packaging to the caps, lids, and seals of other packaging containers so that users can hold and carry food and drink more easily. Being a small, innovative company founded in 2015, Snacktops is an ideal acquisition target. The company is made considerably more attractive by their IP assets which the inventors would no doubt want to leverage to increase the sale price of the company.
There is a lot of overlap in how current innovations are meeting consumer demand for food packaging that is safe, sustainable and reduces food waste. One of the more interesting early-stage innovations that stood out to us was a biodegradable plastic film developed by a team of scientists at the National University of Singapore (NUS). The environmentally-friendly film slows fungal and bacterial growth and also blocks ultraviolet light. There is still more research to be done on the material, but it is showing promise as a sustainable solution to protecting food products for consumption, avoiding food waste by keeping foods fresher longer, and avoiding environmental damages.
The NUS invention has strong commercial appeal and has already garnered significant interest. For any spin-off company with an innovative idea, obtaining a patent is an important first step. The next step then is to extract the invention’s value and there are a number of ways in which this can be done. An effective and well-managed licensing program can ensure ROI in the form of royalty payments over the lifetime of the patent(s). A spin-off company might instead choose to develop and manufacture their own product based on their patented technology. Going down this route, the company may want to use its patents, which are seen as attractive assets to potential investors, to leverage funding for R&D and manufacturing facilities from private equity and venture capital firms. Or indeed, another possibility is that the spin-off company is acquired. A rigorous due diligence process normally precedes an acquisition, undertaken to thoroughly assess the IP assets and better understand their value.
Food waste in this context refers to technologies and innovations that are helping to reduce the amount of food that is wasted and also reducing the environmental impact of food packaging. Keeping food fresher for longer, as mentioned in the above section, is an important part of reducing food waste. In the UK, there has been a recent parliamentary inquiry into the economic, environmental and social impact of food waste being led by the Environmental Food and Rural Affairs (EFRA) committee. According to their findings, “In the UK, approximately eight million tonnes of food is wasted post-manufacture, including households, retail and wholesale and the hospitality/food sector, the committee has claimed. 60% of this could have been avoided. This has an annual value of approximately £16bn a year.” Food waste has a negative financial impact on consumers, manufacturers, and the environment so there is a lot of incentive to fix this problem at every aspect of the food value chain.
In addition to the economic impact of food waste, consumers are driving demand through their increased interest in sustainable brands which is leading to positive change at the manufacturing level. Recently, leading food packaging manufacturer LINPAC announced that it welcomed the EFRA’s inquiry with Helene Roberts, the marketing and innovation director saying: “Food waste and sustainable packaging is very much at the top of our agenda. We welcome this inquiry into how the industry as a whole can reduce food waste further, whilst recognising the important role packaging plays in food waste reduction.”
Packaging has a few roles to play in avoiding waste. Size, shape, function, and the materials used in the packaging are all important. Family sizes have become progressively smaller and consumers have become more conscious of portion sizes. By packaging food in portion-sized packages, companies like LINPAC are aiming to help consumers avoid food waste and extend the shelf life of their products by keeping food safely in a package until it’s ready for use. Another interesting solution in the space of “keeping food in its package longer” is the London-based company Bump Mark, the makers of a bio-reactive food expiry label. The label (see image below) is made of gelatine which models the decay of food allowing the consumer to judge the condition of the meat product without having to open the package. These solutions are helpful in solving one food waste problem, but the portion-size solution creates another by requiring more packaging.
LiquiGlide has a different approach to reducing waste. The inventors at the company have tackled the problem of food sticking to the insides of containers and being thrown away unnecessarily. The company has developed a coating for plastic packages which has minimal friction, allowing the contents to poor out with ease. LiquiGlide has been proactive on the patenting front and have expanded their IP protection in response to the worldwide appeal of their technology.
How packaging breaks down after it has been disposed of is an important part of waste management. As noted earlier, food packaging made out of natural, biodegradable materials or “green packaging” are showing promise in helping avoid the negative impact of waste. In our dataset we found 1317 patent families mentioning biodegradable packaging. Retailers and manufacturers are adopting packaging that is better for the environment as their corporate commitment to sustainability and to help build brand loyalty. Ecovative is an interesting biomaterials firm which has developed patented methods for making biodegradable packaging out of mushrooms and Ikea has recently announced they are now using their mushroom-based packaging materials. Another promising, but early-stage innovation in this space is a biodegradable water bottle made of algae currently being developed by an Icelandic product designer.
Flexible packaging plays an interesting part in food waste and sustainability innovations. A search within our dataset reveals 2811 inventions related to flexible packaging. Part of the carbon footprint of food packaging involves transportation logistics. Flexible packaging is lighter in weight and uses fewer materials than other “rigid” forms of packaging making it more environmentally friendly. Unfortunately, barrier film technology, an integral part of flexible packaging, is not very earth friendly when it comes to landfill waste. The lack of sustainability of flexible packaging has successfully driven innovation in this space. The Dow Chemical Company recently announced the launch of their RecycleReadyTM technology which enables recycling of flexible packaging that incorporates RETAIN™ polymer modifiers to maintaining barrier protection. In addition to Dow, Israeli start-up TIPA has created, and filed patents on, a range of flexible and biodegradable packaging which has recently come onto the market. Other companies such as Campbell’s, whose products have traditionally been rigid packaging, are beginning to experiment with flexible packaging. The impetus behind the change is consumer demand which is “on the rise”. Companies like Campbell’s want to react to that and capture a subset of the packaging market which is “obviously growing”.
Waste and sustainability have spurred some other interesting packaging innovations like edible packaging. This trend in packaging is being taken seriously by a number of companies in the industry. Some examples of this include two innovations out of fast food chain KFC, an edible coffee cup and an edible bowl. Turning packaging into food solves both the food waste and sustainability problem, but there are logistical concerns and market perception that packaging is unhygienic.
The findings from our market research indicated that the Internet of Things (IoT) was one of the three overlying areas in the food packaging industry and an up and coming feature of food packaging. With food packaging being so consumer driven, it makes perfect sense that IoT and the abundance of information sharing and communication opportunities that come with it is having an impact on the industry. Addressing food waste, smart technology apps are coming into play to help inform consumers about the food they are about to purchase or is already in their fridge. From a marketing perspective, IoT packaging could help develop and maintain direct relationships between brands and product users.
This area has seen an increase in filing over the past two decades. Figure 4 indicates that a large number of companies based in China and the US are investing heavily in smart packaging. Many other places in Europe, South America, Australia and elsewhere are seeing patents claim priority in their countries, emphasizing the global reach of this new technology.
Up until recently, it was the price of the electronic devices which slowed the overall adoption of smart packaging, (packages equipped with sensors or radio frequency identification devices, RFID). However, with reductions in the cost of miniature RFID tags and better performance, IoT-enabled packaging is expected to be utilized more in the near future across not only the food industry but the pharma, FMCG and security industries and others. A blog in the EDN Network gives an indication of the size of the IoT building blocks which contain sensors, microcontrollers, and other electronic components; the size of these building blocks are of the order of just a few square millimetres. Their miniature proportions allow them to be incorporated into all sorts of packages of all different shapes and sizes. The avenues by which companies can get a return on investment on RFID tags are abundant and still being explored. The cost of the tags is likely to be offset by the gains from using more compelling marketing, savings from better stock monitoring and more efficient production lines and more.
Adapting packages to incorporate RFID tags and other smart devices makes it easier to keep track of the location of products and enables companies to incorporate live information and the power of big data in their decision making. Smart and IoT packaging could herald a new era of enhanced, interactive, consumer engagement providing personalised product information to customers and allowing companies to better understand consumer behaviour. As each product’s location is known, smart packages can also aid anti-counterfeit and fraud prevention measures.
Among the smart packaging patent dataset that we compiled were patents owned by IQHydr8. The company offers a smart water bottle equipped with a sensor to detect how hydrated the user is based on the fluid consumed and the ambient temperature. Inventions like these which draw on the emergence of smart packaging are likely to become more commonplace once IoT takes off in the years ahead. As technologies become more widely used, the patents upon which they are based become more valuable and the companies which own them, especially if they are small start-ups or spin-offs, become more desirable acquisition targets.
Innovation is happening at a fast pace in the food packaging industry and is being driven by multiple forces. Exploiting innovations in health, waste, sustainability, and IoT packaging means consumers can expect healthier foods and longer lasting perishables while food companies are able to sell a higher proportion of their stock, receive a PR boost by promoting their improved sustainability and environmental credentials and engage consumers in new and interactive ways.
In Part 1 we illustrated the recent surge in innovation within food packaging. The increase in patents in this space shows a highly competitive market driving manufacturers to compete for customers. In Part 2 we looked more closely at the trends that have the biggest impact on consumer perception and what innovations are being developed to meet consumer demands and gain market traction. Considering the solutions manufacturers are trying to find, we identified a handful of innovations and technologies meeting those demands.