Greg Hrinya, Editor07.20.22
For those less inclined to follow the rules of decent society, counterfeiting is big business. Trillions of dollars are on the line when dealing with fake goods and product diversion. While there are seemingly endless opportunities for criminals, there are also numerous avenues for label and package printers to help curb this trend. Protecting brand integrity through all levels of the supply chain is of the utmost importance, and there are ways to help.
In 2019 the Organization for Economic Cooperation and Development (OECD) estimated that the trade of counterfeit goods accounted for 3.3% of global trade annually and would continue to grow. Meanwhile, the International Anti-Counterfeiting Coalition (IACC) values the counterfeit goods trade at $1.7 trillion. Franco Diaz, business development manager at JPatton, adds that this figure is expected to grow to $3 trillion in 2022.
Diaz notes that Customs & Border Protection seizure statistics from 2020 illustrate 26,503 seizures from all US territories and modes of transportation. The seizures amounted to an MSRP of approximately $1.3 billion dollars. He adds that this is a booming market, with 8% growth expected from 2021-2026.
Secure solutions have emerged as big business, too, especially with the surge in e-commerce. “We have seen a tremendous explosion in the demand for viable security solutions,” explains Dan Lieberman, president and CEO of NanoGrafix. “We have been approached by so many companies to devise secure solutions to their counterfeiting problems. E-commerce has exacerbated the counterfeiting of products from all over the world. We have been busier in the last five years serving this market than in the past 37 years.”
According to Fortune Business Insights, the global anti-counterfeiting packaging market was valued at $104.5 billion in 2018 and is projected to reach $189.9 billion by 2026.
“Brand protection means ensuring the product is authentic and being sold through the correct channel, so it’s having protection against counterfeiting and diversion,” comments Tessa Eastman, connected products strategist, Systech. “The packaging is the closest line of defense to the product itself. Brands cannot always rely on their distributors or retailers to protect their brand and consumers, but they can integrate security solutions into their packaging.”
As Eastman notes, counterfeit trade presents a significant financial impact, but the threat posed to consumer health is more worrisome. In 2020, Interpol reported that 30% of pharmaceuticals sold worldwide were counterfeit, and more than one million people die every year after taking counterfeit pharmaceuticals.
Lux Global Label, a label converter based in Lafayette Hill, PA, USA, recently partnered with Systech and its parent company, Markem-Imaje, to deliver increased brand protection for its customers. The partnership incorporated Systech’s digital fingerprinting. Lux has also engineered a staining tamper-evident feature for closure labels.
According to Leslie Gurland, Lux’s executive vice president of global sales and marketing, the label must be functional, reliable, easy to use, cost effective and not easily circumvented.
“There are many ways to use a label or sleeve for brand protection,” says Gurland. “A label can contain covert and overt printing techniques for authentication or physical attributes like tamper evidence and destructibility. We see this market trending upward, too. Protection measures tend to be used on highly regulated products, ones with a high cost.”
E-commerce will continue to play a pivotal role in this sector. Ron Ducharme, vice president of business development, Covectra, states e-commerce grew from $400 billion in 2010 to over $2.2 trillion in 2020. Other data shows that in 2022 e-commerce will hit $5.54 trillion globally, with an average increase of 12% until 2025.
“Unfortunately, this comes with a dark side,” says Ducharme. “Cosmetics and online automotive replacements both average above a 30% chance of purchasing a counterfeit product. Handbags, clothing and jewelry average above an 8% chance of being counterfeit. The World Health Organization indicates up to 25% of all alcohol purchased online is counterfeit. Unfortunately, the burden of these issues falls on the companies being counterfeited. The resulting loss of profits, lack of ability to hire people, and lawsuits could cause a company to shut down.”
“In the wake of the Covid-19 pandemic, during which high streets were closed and consumers turned to e-commerce, counterfeiters seized the opportunity to exploit consumers remotely purchasing goods and unable to visually verify authenticity with their falsified goods,” explains Amir Raziel, head of strategic marketing, HP Indigo. “One industry in particular that suffered from this was pharmaceuticals, with a recent study estimating that the value of the counterfeit pharmaceutical industry is now 4.03 billion euros.”
The multitude of security options available require increased communication with suppliers to ensure the proper protection for brands. According to Raziel, there are so many options available that brands need to ask the right questions to best protect the integrity of the product.
Security elements designed to protect brands can be both functional and aesthetically pleasing. “You can incorporate the message into the solution,” comments Michael Welch, senior product manager, Avery Dennison LPM Durables. “For example, the non-GMO marking on Simply Orange’s neck label and Similac are tamper-evident labels meant to break on tampering, but they have an added message promoting a feature versus simply being a security element. The labels are now functional.”
Welch adds the labels and packaging in this arena go beyond individual tampering. For example, proper packaging can also prevent premature opening in transport due to rough handling. “A box being shipped with multiple items inside, if one opens, can ruin the entire box,” he notes. “If this happens the consumer will remember and may be less inclined to order again.”
While there are many considerations for securing the brand, Ducharme notes it is often easier to focus on the label when safeguarding the product. “Unfortunately, the packaging itself does not allow opportunities when it comes to securing a brand,” he explains. “Whether you have a traditional glass or plastic bottle, a stand-up pouch or a resealable package, trying to create uniqueness comes at a very high expense. So, the focus of security should be on the labeling of the product versus the container. Labels represent minimal cost whether they are self-adhesive or glue applied.
“Technology of digital variable print, sequential numbering inline or adding hidden messages to the label may be more effective with significant cost savings,” adds Ducharme. “Further to this point, a tamper-evident seal may be used in combination with ‘smarter’ technology.”
When identifying packaging solutions to protect the brand, Diaz acknowledges several key steps in the process. Aesthetics, selection of security features, the intended user, and return on investment are all critical when evaluating how to design a package.
“You must select an effective security feature that will maintain or enhance the beauty and strength of your branded product or packaging,” says Diaz. “Following a risk assessment, you have to identify what threats exist and what classification(s) of security features are required such as overt, covert or forensic. And, of course, do the benefits of adding security features outweigh the costs?”
According to Welch, there are other questions that need asking, as well. Will you put safeguards into the individual piece, or if in a case just the outer packaging, or both? Will you add the element directly to the part or is there an outer shell? Are there complex shapes you are labeling. How easy is it to open or remove, and how overt do you want to make it?
“It’s not always the shape that’s difficult to label,” Welch says. “An over-varnished box where you want a fiber tear to show evidence that the package was opened can also be a challenge.”
Ultimately, the goal here is to utilize the label and/or packaging as a first hurdle for counterfeiters, thus enhancing product integrity.
“Tamper-evident labeling solutions can, for instance, clearly show first-opening of a secondary or primary packaging, helping to avoid manipulation of outer packaging or illegal reuse of empty medicine containers,” states Gene Dul, president of Schreiner MediPharm. “Label-integrated security features can help to authenticate original drugs, thus supporting product and brand security while making the counterfeiter’s life harder.
“Depending on the secondary packaging or the primary container, the label has to be precisely adapted to the specific application to ensure reliable adherence, clear and irreversible tamper-evidence, as well as the integration of customized authentication features for the involved stakeholders in the verification process,” adds Dul.
According to Dul, the pandemic – and the changing buying habits of consumers – has also led to increased counterfeit activity. He notes pharmaceutical products have seen a surge in counterfeiting activities during this time period, too.
“Counterfeiting is a crime of opportunity,” adds Eastman. “In today’s market, any product could be at risk of counterfeiting. This is due to a myriad of factors but includes periodic shortages of some goods (created by the pandemic, labor shortages, and conflicts, among others) and digital disruption with consumers more and more turning to online marketplaces.”
“This may seem like a secondary concern because it is authentic product, but selling authentic product through unauthorized channels can also have significant risks for brands,” Eastman says. “This includes product not meeting local requirements, lost margin, channel conflict and/or abuse of incentive and rebate programs, negative impact to brand equity or customer perception, and loss of product traceability in the event of a recall.”
According to Schreiner MediPharm’s Dul, there has been an increasing risk of grey market activities and illegal reuse of original containers.
While many people will associate counterfeit goods with brand protection, diversion is also a significant concern. With the proliferation of e-commerce, there is a growing need in the industry to have some protection against counterfeiting and diversion, notes Covectra’s Ducharme. Smart technology can aid in this endeavor.
“The industry is missing a comprehensive program with immediate feedback on where the products are in the sales channel, who purchased the product, and when. The current programs can identify counterfeit web sites, locate your product in the sales channel and identify if your product has been tampered with,” he says. “But none of these programs can offer sales channel information, sales location, who purchased the product and when with immediate feedback. The only comprehensive program is smart labeling technology. These labels offer counterfeit and diversion protection with immediate feedback to the brand owner.”
Ducharme notes there are six billion mobile devices in use globally purchasing 73 % of all goods and services. Mobile devices can be used to monitor products and provide immediate feedback.
“It is important for brands to be proactive when considering a brand protection platform. Far too many organizations are dismissive of the effort, remain in denial, and finally, when the brand is compromised, turn to a reactive mode, which often leads to hasty, ineffective solutions,” explains JPatton’s Diaz.
Historically, price has been prohibitive for many brands looking to enter this space. As Lux Global Label’s Gurland points out, brands must understand that there are easy and inexpensive solutions on the market, as well as label companies willing to guide them.
“In order to get started, brands need to have a clear understanding of what they want to protect themselves against, what is the end goal, and what is their budget,” notes Gurland. “They need to make sure their marketing, procurement, package engineering and brand protection teams are all aligned, too.”
In the future, more brands will continue to explore this space. The relative novelty of the market, coupled with increased demand, should spur significant growth. “This is a rapidly growing area, but still in its infancy in some regards,” explains Avery Dennison’s Welch. “With the rise of curbside grocery pick-up, services like Uber Eats, etc. where you are entrusting a third party to deliver your food, you see a rise in the bags having a branded closure label on them. A simple solution can provide the user a bit of peace of mind. In Europe, Amazon has a program where packaging hygienic and topical products must contain a tamper-evident label for all fulfilled by Amazon sellers, or returns cannot be processed. These have all happened in the last couple of years.”
HP Indigo’s Raziel believes this sector will only increase as the counterfeit industry expands and becomes more sophisticated. “The brand protection and security printing industry is going to become more important and permeate into different industries, which previously haven’t relied upon these features to safeguard their brands, their products and their reputations,” he says. “Every label converter is able to implement brand protection printing on their existing presses using a variety of features and methods.”
Finding the right partner for this journey is critical. In many cases, selecting the wrong partner, who subsequently delivers a false sense of security, can be more impactful than not implementing any brand protection measures at all. Plus, solutions must be tailored to the individual needs of the brand.
“It’s important to work with a provider who will take the time to understand your exact challenge and business requirements to ensure a fit,” states Systech’s Eastman.
An effective strategy could also include consumer engagement. “Creating consumer interaction is essential to prevent counterfeiting, and the use of smart labeling technology should be considered,” says Covectra’s Ducharme. “To have effective security, you must employ two levels: overt and covert. The tamper-evident seal is good covert security. Covert security can remain hidden, allowing the consumer to identify it with the package. Smart labeling technology has both overt and covert technology. Also, it provides valuable information to the brand owner of where the product was purchased, when it was purchased, and who purchased it.”
When dealing with pharmaceuticals, Schreiner MediPharm recommends reaching out to a company with specific knowledge of the regulatory nature of this market. “Brands should look for specialized packaging and labeling developers and manufacturers that know their specific market and regulatory background with regard to supply chain security,” says Dul. “Based on a consultative approach, customized and reliable security concepts can be adapted to the specific drug and its packaging.”
For brands exploring new products, they should understand the nature of brand protection, as well. In many cases, the process supersedes the product.
“I would remind brands that brand protection is not a product but a process,” adds Diaz. “While products follow the familiar path of introduction, growth, maturity and decline, and death, brand protection as a process involves actions, changes and functions that all occur in the pursuit of ROI. It is not a ‘fire and forget’ exercise.”
Covectra has developed a robust portfolio for brand protection. Ducharme notes prevention begins with a solid track-and-trace system, whether it is straight-out counterfeiting or diverting your product from one market to another location.
Covectra’s AuthentiTrack is a comprehensive, integrated cloud-hosted solution. It is an EPCIS-certified database that can be fully integrated into any packaging line. In addition, AuthentiTrack can tie together individual units to a case, carton, and pallet for complete control. Meanwhile, Covectra’s StellaGuard is a smart labeling technology that allows the consumer to verify and authenticate a product prior to or at point of purchase. “The overt technology is a random QR code,” states Ducharme. “The covert technology is the random stars within the product. Unlike other labeling technologies, StellaGuard labels cannot be counterfeited. The combination of random QR codes, along with a random background, makes each label unique. StellaGuard does not require any special equipment.”
Digital printing has proved pivotal in this market. HP Indigo digital presses have been engineered to support a wide range of features and technologies for security printing and brand protection. For example, American Label, a US-based label converter and HP Indigo customer, has utilized HP’s technology to remain at the forefront of this issue.
“HP is the world’s leading technology provider when it comes to digital printing for security and brand protection,” says Raziel. “We offer a range of solutions for businesses to safeguard their products and, as a result, their brand. HP’s secure digital printing supports a range of features that enable PSPs to provide customers with brand protection and authenticity features. These include overt security features like holograms, as well as semi-covert features such as QR codes or microtext, which are authenticated with a second device. There are also covert features, including invisible inks, which are authenticated by experts and purpose-built devices. Forensic-level features, detectable only in a lab, are then always authenticated by experts.”
JPatton boasts a three-fold strategy for dealing with brand protection. This philosophy is marked by the company’s physical, digital and intellectual offerings. JPatton’s physical offerings include labels, hangtags and seals customized with select security features and aesthetic appeal. For digital, proprietary print technology is authenticated with a smartphone and the JP Forensic security app. Finally, JPatton offers a “Direct Licensing Hub.” DLH is a one-stop licensing platform that helps brands manage all aspects of their licensing needs, including royalty management, product and artwork approval, and security.
Lux Global Label delivers secure label and packaging solutions for its customers in multiple ways. For authentication, Lux offers taggants, micro-print, charms, color-shifting inks, thermal reactive inks, and pattern adhesives. For tamper evidence, the converter utilizes various materials and patterned adhesives for containers and cartons.
“Over the last year, we have seen a very big spike in tamper-evident carton closures,” explains Lux Global Label’s Gurland. “Safety seals continue to be important, as well.”
NanoGrafix has created a wide range of digital holographic and optical solutions to secure printing in numerous segments. These range from government applications, such as currency and tax stamps, to labels, packaging, textiles, lottery tickets and more. This technology can also be used for optical decorative applications in labels and packaging, where every label or package can have a different holographic image or optical effect.
NanoGrafix’s holograms and optical structures can be printed using conventional printing equipment with a special attachment and software that the company provides to security printers and converters, notes Lieberman. In this way, the holograms are instantly produced, different from each other and printed in one pass, with the other inks of the printing machine in perfect register.
Schreiner MediPharm offers a diverse product range for brand protection. These solutions include customized sealing products for medicine packs or containers to provide clear tamper-evidence and enhance product integrity. In addition, label-integrated authentication features, ranging from overt and covert to digital technologies, are an important aspect for effective protection against counterfeiting. Additionally, track-and-trace solutions allow digital identification and tracking of products within the supply chain.
“Schreiner MediPharm’s innovative approach can be seen in our security concept Cap-Lock, combining a cap adapter and a label,” explains Dul. “The adapter is placed on top of the syringe’s primary closure and interlinked with it to equalize the diameter differences of the syringe body and closure. The label wraps around the syringe body and cap adapter, supporting product integrity up to the point of use. Once opened, it provides irreversible tamper evidence due to an integrated perforation.
“Additional authentication features can be included in the label to allow different stakeholders within the supply chain to verify product authenticity,” he adds.
Systech works with numerous brands that actively deploy several layers of product protection technologies. The challenge comes in managing these layers, adapting over time to what is working, what may not be having an impact and keeping up with business requirements.
“At Systech we offer one of the most comprehensive portfolios of product traceability and brand protection solutions,” explains Eastman. “That means that we can work with our customers to design solutions that address their specific challenges and business requirements. Our core technology is called ‘e-Fingerprinting.’ By taking a picture of the UPC, QR code or data matrix that is already being printed, we can exploit micro-variations in the print to create a unique digital identity for each individual label or unit of packaging, which is impossible to replicate.”
Systech boasts the motto, “We change everything without changing anything.” The initial capture works in line with the current packaging or printing process so there is no impact to production. By using what is already being printed, there are no artwork changes required.
The e-Fingerprint is stored in the cloud, and anyone in the supply chain – for example, distributors, retailers or consumers – can authenticate the product and track it through its journey via a smartphone. Systech technology also provides the ability to geo-locate product and alert customers when product is found outside of its intended location.
By Ian Beresford, head of marketing and development, Essentra Tapes
Recent estimates suggest that between 5-9% of all global trade is accounted for by counterfeit goods. Brands can no longer take first impressions for granted – a consumer may develop a negative impression of a product that they have never genuinely experienced after buying a fake. Even if the customer realizes the forgery, any future purchasing decisions will be tainted by suspicion. How do they know a product is the genuine article at a glance?
The answer lies in improved labeling technology. However, there is not a one-size-fits-all solution. Several technologies are available for a variety of applications, each offering a different level of security. Essentra Tapes has over 100 years of experience, which helps its brand security technologies stay one step ahead of criminals. It develops brand protection solutions for every stage of the manufacturing and converting process, ranging from simple brand enhancement to forensic authentication systems that require lab equipment to verify.
A holographic label is often ideal for FMCG brands seeking to add an extra level of complexity to their packaging and is also very easy for converters to add to their lines. This complexity makes it more difficult to forge and will instantly reassure a consumer that your brand is the real thing. Essentra Tapes took this concept one step further and now offers easy-open SupaStrip tapes printed with pearlescent ink. This not only acts as an eye-catching proof of authenticity, but it also acts as proof the product is new, as advertised, and has not been tampered with.
When packaging sensitive products, such as prescribed and over-the-counter (OTC) pharmaceuticals, brands will require more sophisticated solutions. The Centers for Disease Control and Prevention (CDC) estimates that in low- and middle-income countries up to 41% of medications can be counterfeit. Pharma packaging converters may need to use several layers of overt and covert security to ensure their clients do not become synonymous with fake products in some international markets.
Covert and forensic authentication measures require specialist equipment to verify. They add security at every level of the supply chain and, when combined with overt security measures such as holograms or colorshift inks, can be impossible for criminals to detect, let alone imitate.
Weaving proof of authenticity labeling into an easy-open strip around a medicine bottle cap or a carton of strip-packaged tablets serves multiple purposes. It acts as a preventative measure to deter counterfeiters from even attempting to imitate your packaging, and if they do, it makes the fake easy to spot. It also shows the consumer their medication is sealed and has not been tampered with. Perhaps most importantly, though, it provides a positive opening experience for consumers who may struggle to open standard packaging films. Providing this experience should be top of the priority list for any brand – as it should be for the converters and manufacturers of their packaging.
This aspect of brand protection should not be overlooked. Not only can easy-open tapes be used as proof of authenticity labels, but they can also reassure consumers (particularly those who struggle with motor skills) they have the right brand by providing a comfortable opening experience. This positive experience can only help draw them toward your brand and your packaging in the future.
Deterring potentially negative experiences with counterfeits while creating an initial positive opening experience with the real thing is key to protecting and enhancing your brand image. This should be something any brand strives for in its packaging, no matter what sector it occupies.
In 2019 the Organization for Economic Cooperation and Development (OECD) estimated that the trade of counterfeit goods accounted for 3.3% of global trade annually and would continue to grow. Meanwhile, the International Anti-Counterfeiting Coalition (IACC) values the counterfeit goods trade at $1.7 trillion. Franco Diaz, business development manager at JPatton, adds that this figure is expected to grow to $3 trillion in 2022.
Diaz notes that Customs & Border Protection seizure statistics from 2020 illustrate 26,503 seizures from all US territories and modes of transportation. The seizures amounted to an MSRP of approximately $1.3 billion dollars. He adds that this is a booming market, with 8% growth expected from 2021-2026.
Secure solutions have emerged as big business, too, especially with the surge in e-commerce. “We have seen a tremendous explosion in the demand for viable security solutions,” explains Dan Lieberman, president and CEO of NanoGrafix. “We have been approached by so many companies to devise secure solutions to their counterfeiting problems. E-commerce has exacerbated the counterfeiting of products from all over the world. We have been busier in the last five years serving this market than in the past 37 years.”
According to Fortune Business Insights, the global anti-counterfeiting packaging market was valued at $104.5 billion in 2018 and is projected to reach $189.9 billion by 2026.
“Brand protection means ensuring the product is authentic and being sold through the correct channel, so it’s having protection against counterfeiting and diversion,” comments Tessa Eastman, connected products strategist, Systech. “The packaging is the closest line of defense to the product itself. Brands cannot always rely on their distributors or retailers to protect their brand and consumers, but they can integrate security solutions into their packaging.”
As Eastman notes, counterfeit trade presents a significant financial impact, but the threat posed to consumer health is more worrisome. In 2020, Interpol reported that 30% of pharmaceuticals sold worldwide were counterfeit, and more than one million people die every year after taking counterfeit pharmaceuticals.
Lux Global Label, a label converter based in Lafayette Hill, PA, USA, recently partnered with Systech and its parent company, Markem-Imaje, to deliver increased brand protection for its customers. The partnership incorporated Systech’s digital fingerprinting. Lux has also engineered a staining tamper-evident feature for closure labels.
According to Leslie Gurland, Lux’s executive vice president of global sales and marketing, the label must be functional, reliable, easy to use, cost effective and not easily circumvented.
“There are many ways to use a label or sleeve for brand protection,” says Gurland. “A label can contain covert and overt printing techniques for authentication or physical attributes like tamper evidence and destructibility. We see this market trending upward, too. Protection measures tend to be used on highly regulated products, ones with a high cost.”
E-commerce will continue to play a pivotal role in this sector. Ron Ducharme, vice president of business development, Covectra, states e-commerce grew from $400 billion in 2010 to over $2.2 trillion in 2020. Other data shows that in 2022 e-commerce will hit $5.54 trillion globally, with an average increase of 12% until 2025.
“Unfortunately, this comes with a dark side,” says Ducharme. “Cosmetics and online automotive replacements both average above a 30% chance of purchasing a counterfeit product. Handbags, clothing and jewelry average above an 8% chance of being counterfeit. The World Health Organization indicates up to 25% of all alcohol purchased online is counterfeit. Unfortunately, the burden of these issues falls on the companies being counterfeited. The resulting loss of profits, lack of ability to hire people, and lawsuits could cause a company to shut down.”
“In the wake of the Covid-19 pandemic, during which high streets were closed and consumers turned to e-commerce, counterfeiters seized the opportunity to exploit consumers remotely purchasing goods and unable to visually verify authenticity with their falsified goods,” explains Amir Raziel, head of strategic marketing, HP Indigo. “One industry in particular that suffered from this was pharmaceuticals, with a recent study estimating that the value of the counterfeit pharmaceutical industry is now 4.03 billion euros.”
The multitude of security options available require increased communication with suppliers to ensure the proper protection for brands. According to Raziel, there are so many options available that brands need to ask the right questions to best protect the integrity of the product.
Security elements designed to protect brands can be both functional and aesthetically pleasing. “You can incorporate the message into the solution,” comments Michael Welch, senior product manager, Avery Dennison LPM Durables. “For example, the non-GMO marking on Simply Orange’s neck label and Similac are tamper-evident labels meant to break on tampering, but they have an added message promoting a feature versus simply being a security element. The labels are now functional.”
Welch adds the labels and packaging in this arena go beyond individual tampering. For example, proper packaging can also prevent premature opening in transport due to rough handling. “A box being shipped with multiple items inside, if one opens, can ruin the entire box,” he notes. “If this happens the consumer will remember and may be less inclined to order again.”
While there are many considerations for securing the brand, Ducharme notes it is often easier to focus on the label when safeguarding the product. “Unfortunately, the packaging itself does not allow opportunities when it comes to securing a brand,” he explains. “Whether you have a traditional glass or plastic bottle, a stand-up pouch or a resealable package, trying to create uniqueness comes at a very high expense. So, the focus of security should be on the labeling of the product versus the container. Labels represent minimal cost whether they are self-adhesive or glue applied.
“Technology of digital variable print, sequential numbering inline or adding hidden messages to the label may be more effective with significant cost savings,” adds Ducharme. “Further to this point, a tamper-evident seal may be used in combination with ‘smarter’ technology.”
When identifying packaging solutions to protect the brand, Diaz acknowledges several key steps in the process. Aesthetics, selection of security features, the intended user, and return on investment are all critical when evaluating how to design a package.
“You must select an effective security feature that will maintain or enhance the beauty and strength of your branded product or packaging,” says Diaz. “Following a risk assessment, you have to identify what threats exist and what classification(s) of security features are required such as overt, covert or forensic. And, of course, do the benefits of adding security features outweigh the costs?”
According to Welch, there are other questions that need asking, as well. Will you put safeguards into the individual piece, or if in a case just the outer packaging, or both? Will you add the element directly to the part or is there an outer shell? Are there complex shapes you are labeling. How easy is it to open or remove, and how overt do you want to make it?
“It’s not always the shape that’s difficult to label,” Welch says. “An over-varnished box where you want a fiber tear to show evidence that the package was opened can also be a challenge.”
Ultimately, the goal here is to utilize the label and/or packaging as a first hurdle for counterfeiters, thus enhancing product integrity.
“Tamper-evident labeling solutions can, for instance, clearly show first-opening of a secondary or primary packaging, helping to avoid manipulation of outer packaging or illegal reuse of empty medicine containers,” states Gene Dul, president of Schreiner MediPharm. “Label-integrated security features can help to authenticate original drugs, thus supporting product and brand security while making the counterfeiter’s life harder.
“Depending on the secondary packaging or the primary container, the label has to be precisely adapted to the specific application to ensure reliable adherence, clear and irreversible tamper-evidence, as well as the integration of customized authentication features for the involved stakeholders in the verification process,” adds Dul.
According to Dul, the pandemic – and the changing buying habits of consumers – has also led to increased counterfeit activity. He notes pharmaceutical products have seen a surge in counterfeiting activities during this time period, too.
“Counterfeiting is a crime of opportunity,” adds Eastman. “In today’s market, any product could be at risk of counterfeiting. This is due to a myriad of factors but includes periodic shortages of some goods (created by the pandemic, labor shortages, and conflicts, among others) and digital disruption with consumers more and more turning to online marketplaces.”
Exploring the ‘grey market’
Brand protection goes well beyond identifying counterfeit goods. As Systech’s Eastman notes, product diversion – or the “grey market” – is a legitimate concern for brands. The grey market covers goods that are sold legally but without the brand’s permission. KPMG recently conducted a survey of OEMs, distributors and resellers, and 63% of respondents say that the grey market has grown over the past 10 years. Plus, 90% of OEMs had instances for product availability outside of their approved channel.“This may seem like a secondary concern because it is authentic product, but selling authentic product through unauthorized channels can also have significant risks for brands,” Eastman says. “This includes product not meeting local requirements, lost margin, channel conflict and/or abuse of incentive and rebate programs, negative impact to brand equity or customer perception, and loss of product traceability in the event of a recall.”
According to Schreiner MediPharm’s Dul, there has been an increasing risk of grey market activities and illegal reuse of original containers.
While many people will associate counterfeit goods with brand protection, diversion is also a significant concern. With the proliferation of e-commerce, there is a growing need in the industry to have some protection against counterfeiting and diversion, notes Covectra’s Ducharme. Smart technology can aid in this endeavor.
“The industry is missing a comprehensive program with immediate feedback on where the products are in the sales channel, who purchased the product, and when. The current programs can identify counterfeit web sites, locate your product in the sales channel and identify if your product has been tampered with,” he says. “But none of these programs can offer sales channel information, sales location, who purchased the product and when with immediate feedback. The only comprehensive program is smart labeling technology. These labels offer counterfeit and diversion protection with immediate feedback to the brand owner.”
Ducharme notes there are six billion mobile devices in use globally purchasing 73 % of all goods and services. Mobile devices can be used to monitor products and provide immediate feedback.
Proactive, not reactive
When getting started in brand protection, it is vital to take a proactive rather than reactive stance. It is far better for an organization to prevent a security crisis than to clean up the mess after a serious breach.“It is important for brands to be proactive when considering a brand protection platform. Far too many organizations are dismissive of the effort, remain in denial, and finally, when the brand is compromised, turn to a reactive mode, which often leads to hasty, ineffective solutions,” explains JPatton’s Diaz.
Historically, price has been prohibitive for many brands looking to enter this space. As Lux Global Label’s Gurland points out, brands must understand that there are easy and inexpensive solutions on the market, as well as label companies willing to guide them.
“In order to get started, brands need to have a clear understanding of what they want to protect themselves against, what is the end goal, and what is their budget,” notes Gurland. “They need to make sure their marketing, procurement, package engineering and brand protection teams are all aligned, too.”
In the future, more brands will continue to explore this space. The relative novelty of the market, coupled with increased demand, should spur significant growth. “This is a rapidly growing area, but still in its infancy in some regards,” explains Avery Dennison’s Welch. “With the rise of curbside grocery pick-up, services like Uber Eats, etc. where you are entrusting a third party to deliver your food, you see a rise in the bags having a branded closure label on them. A simple solution can provide the user a bit of peace of mind. In Europe, Amazon has a program where packaging hygienic and topical products must contain a tamper-evident label for all fulfilled by Amazon sellers, or returns cannot be processed. These have all happened in the last couple of years.”
HP Indigo’s Raziel believes this sector will only increase as the counterfeit industry expands and becomes more sophisticated. “The brand protection and security printing industry is going to become more important and permeate into different industries, which previously haven’t relied upon these features to safeguard their brands, their products and their reputations,” he says. “Every label converter is able to implement brand protection printing on their existing presses using a variety of features and methods.”
Finding the right partner for this journey is critical. In many cases, selecting the wrong partner, who subsequently delivers a false sense of security, can be more impactful than not implementing any brand protection measures at all. Plus, solutions must be tailored to the individual needs of the brand.
“It’s important to work with a provider who will take the time to understand your exact challenge and business requirements to ensure a fit,” states Systech’s Eastman.
An effective strategy could also include consumer engagement. “Creating consumer interaction is essential to prevent counterfeiting, and the use of smart labeling technology should be considered,” says Covectra’s Ducharme. “To have effective security, you must employ two levels: overt and covert. The tamper-evident seal is good covert security. Covert security can remain hidden, allowing the consumer to identify it with the package. Smart labeling technology has both overt and covert technology. Also, it provides valuable information to the brand owner of where the product was purchased, when it was purchased, and who purchased it.”
When dealing with pharmaceuticals, Schreiner MediPharm recommends reaching out to a company with specific knowledge of the regulatory nature of this market. “Brands should look for specialized packaging and labeling developers and manufacturers that know their specific market and regulatory background with regard to supply chain security,” says Dul. “Based on a consultative approach, customized and reliable security concepts can be adapted to the specific drug and its packaging.”
For brands exploring new products, they should understand the nature of brand protection, as well. In many cases, the process supersedes the product.
“I would remind brands that brand protection is not a product but a process,” adds Diaz. “While products follow the familiar path of introduction, growth, maturity and decline, and death, brand protection as a process involves actions, changes and functions that all occur in the pursuit of ROI. It is not a ‘fire and forget’ exercise.”
What’s new?
Avery Dennison offers a broad set of solutions that cover both brand protection (tamper evidence) and counterfeiting. There are frangible films that break when you try to remove, simple, aggressive adhesives for fiber tear, void solutions that image when removed, track-and-trace RFID solutions, taggants, threads, fluorescing agents and other solutions.Covectra has developed a robust portfolio for brand protection. Ducharme notes prevention begins with a solid track-and-trace system, whether it is straight-out counterfeiting or diverting your product from one market to another location.
Covectra’s AuthentiTrack is a comprehensive, integrated cloud-hosted solution. It is an EPCIS-certified database that can be fully integrated into any packaging line. In addition, AuthentiTrack can tie together individual units to a case, carton, and pallet for complete control. Meanwhile, Covectra’s StellaGuard is a smart labeling technology that allows the consumer to verify and authenticate a product prior to or at point of purchase. “The overt technology is a random QR code,” states Ducharme. “The covert technology is the random stars within the product. Unlike other labeling technologies, StellaGuard labels cannot be counterfeited. The combination of random QR codes, along with a random background, makes each label unique. StellaGuard does not require any special equipment.”
Digital printing has proved pivotal in this market. HP Indigo digital presses have been engineered to support a wide range of features and technologies for security printing and brand protection. For example, American Label, a US-based label converter and HP Indigo customer, has utilized HP’s technology to remain at the forefront of this issue.
“HP is the world’s leading technology provider when it comes to digital printing for security and brand protection,” says Raziel. “We offer a range of solutions for businesses to safeguard their products and, as a result, their brand. HP’s secure digital printing supports a range of features that enable PSPs to provide customers with brand protection and authenticity features. These include overt security features like holograms, as well as semi-covert features such as QR codes or microtext, which are authenticated with a second device. There are also covert features, including invisible inks, which are authenticated by experts and purpose-built devices. Forensic-level features, detectable only in a lab, are then always authenticated by experts.”
JPatton boasts a three-fold strategy for dealing with brand protection. This philosophy is marked by the company’s physical, digital and intellectual offerings. JPatton’s physical offerings include labels, hangtags and seals customized with select security features and aesthetic appeal. For digital, proprietary print technology is authenticated with a smartphone and the JP Forensic security app. Finally, JPatton offers a “Direct Licensing Hub.” DLH is a one-stop licensing platform that helps brands manage all aspects of their licensing needs, including royalty management, product and artwork approval, and security.
Lux Global Label delivers secure label and packaging solutions for its customers in multiple ways. For authentication, Lux offers taggants, micro-print, charms, color-shifting inks, thermal reactive inks, and pattern adhesives. For tamper evidence, the converter utilizes various materials and patterned adhesives for containers and cartons.
“Over the last year, we have seen a very big spike in tamper-evident carton closures,” explains Lux Global Label’s Gurland. “Safety seals continue to be important, as well.”
NanoGrafix has created a wide range of digital holographic and optical solutions to secure printing in numerous segments. These range from government applications, such as currency and tax stamps, to labels, packaging, textiles, lottery tickets and more. This technology can also be used for optical decorative applications in labels and packaging, where every label or package can have a different holographic image or optical effect.
NanoGrafix’s holograms and optical structures can be printed using conventional printing equipment with a special attachment and software that the company provides to security printers and converters, notes Lieberman. In this way, the holograms are instantly produced, different from each other and printed in one pass, with the other inks of the printing machine in perfect register.
Schreiner MediPharm offers a diverse product range for brand protection. These solutions include customized sealing products for medicine packs or containers to provide clear tamper-evidence and enhance product integrity. In addition, label-integrated authentication features, ranging from overt and covert to digital technologies, are an important aspect for effective protection against counterfeiting. Additionally, track-and-trace solutions allow digital identification and tracking of products within the supply chain.
“Schreiner MediPharm’s innovative approach can be seen in our security concept Cap-Lock, combining a cap adapter and a label,” explains Dul. “The adapter is placed on top of the syringe’s primary closure and interlinked with it to equalize the diameter differences of the syringe body and closure. The label wraps around the syringe body and cap adapter, supporting product integrity up to the point of use. Once opened, it provides irreversible tamper evidence due to an integrated perforation.
“Additional authentication features can be included in the label to allow different stakeholders within the supply chain to verify product authenticity,” he adds.
Systech works with numerous brands that actively deploy several layers of product protection technologies. The challenge comes in managing these layers, adapting over time to what is working, what may not be having an impact and keeping up with business requirements.
“At Systech we offer one of the most comprehensive portfolios of product traceability and brand protection solutions,” explains Eastman. “That means that we can work with our customers to design solutions that address their specific challenges and business requirements. Our core technology is called ‘e-Fingerprinting.’ By taking a picture of the UPC, QR code or data matrix that is already being printed, we can exploit micro-variations in the print to create a unique digital identity for each individual label or unit of packaging, which is impossible to replicate.”
Systech boasts the motto, “We change everything without changing anything.” The initial capture works in line with the current packaging or printing process so there is no impact to production. By using what is already being printed, there are no artwork changes required.
The e-Fingerprint is stored in the cloud, and anyone in the supply chain – for example, distributors, retailers or consumers – can authenticate the product and track it through its journey via a smartphone. Systech technology also provides the ability to geo-locate product and alert customers when product is found outside of its intended location.
By Ian Beresford, head of marketing and development, Essentra Tapes
Recent estimates suggest that between 5-9% of all global trade is accounted for by counterfeit goods. Brands can no longer take first impressions for granted – a consumer may develop a negative impression of a product that they have never genuinely experienced after buying a fake. Even if the customer realizes the forgery, any future purchasing decisions will be tainted by suspicion. How do they know a product is the genuine article at a glance?
The answer lies in improved labeling technology. However, there is not a one-size-fits-all solution. Several technologies are available for a variety of applications, each offering a different level of security. Essentra Tapes has over 100 years of experience, which helps its brand security technologies stay one step ahead of criminals. It develops brand protection solutions for every stage of the manufacturing and converting process, ranging from simple brand enhancement to forensic authentication systems that require lab equipment to verify.
A holographic label is often ideal for FMCG brands seeking to add an extra level of complexity to their packaging and is also very easy for converters to add to their lines. This complexity makes it more difficult to forge and will instantly reassure a consumer that your brand is the real thing. Essentra Tapes took this concept one step further and now offers easy-open SupaStrip tapes printed with pearlescent ink. This not only acts as an eye-catching proof of authenticity, but it also acts as proof the product is new, as advertised, and has not been tampered with.
When packaging sensitive products, such as prescribed and over-the-counter (OTC) pharmaceuticals, brands will require more sophisticated solutions. The Centers for Disease Control and Prevention (CDC) estimates that in low- and middle-income countries up to 41% of medications can be counterfeit. Pharma packaging converters may need to use several layers of overt and covert security to ensure their clients do not become synonymous with fake products in some international markets.
Covert and forensic authentication measures require specialist equipment to verify. They add security at every level of the supply chain and, when combined with overt security measures such as holograms or colorshift inks, can be impossible for criminals to detect, let alone imitate.
Weaving proof of authenticity labeling into an easy-open strip around a medicine bottle cap or a carton of strip-packaged tablets serves multiple purposes. It acts as a preventative measure to deter counterfeiters from even attempting to imitate your packaging, and if they do, it makes the fake easy to spot. It also shows the consumer their medication is sealed and has not been tampered with. Perhaps most importantly, though, it provides a positive opening experience for consumers who may struggle to open standard packaging films. Providing this experience should be top of the priority list for any brand – as it should be for the converters and manufacturers of their packaging.
This aspect of brand protection should not be overlooked. Not only can easy-open tapes be used as proof of authenticity labels, but they can also reassure consumers (particularly those who struggle with motor skills) they have the right brand by providing a comfortable opening experience. This positive experience can only help draw them toward your brand and your packaging in the future.
Deterring potentially negative experiences with counterfeits while creating an initial positive opening experience with the real thing is key to protecting and enhancing your brand image. This should be something any brand strives for in its packaging, no matter what sector it occupies.