We sat down with Jorge Izquierdo, vice president, market development, PMMI, to discuss details of the research and how it relates to trends in the industry. Technologies to combat counterfeiting will be on display at the upcoming PACK EXPO East 2017 (Pennsylvania Convention Center, Philadelphia, PA; Feb. 27 to Mar. 1), the industry’s premier trade show experience in the East.
NW: PMMI recently released a study exploring the impact of counterfeit goods and industry responses to enhance brand protection. Can you give a broad overview of the most important takeaways?
JI: Due to extended supply chains, manufacturers and retailers face increasing pressures to protect their brands. According to PMMI’s report, counterfeiting is predicted to increase 3% per year worldwide. As counterfeiters become more resourceful, manufacturers and brand owners must invest in brand protection technologies. If neglected, counterfeiting and product adulteration could grow to be even more serious threats to consumer safety and to the integrity of consumer brands.
NW: What supply chain vulnerabilities and potential factors can increase a manufacturer's chances of seeing counterfeit versions of its brands appear in the marketplace?
JI: One factor that increases the likelihood of counterfeiting is if there is a supply shortage. Products with a supply shortage are quite likely to have counterfeit versions introduced in the market in order to fulfill a demand and make a profit. Moreover, any product provided in bulk is a target—and this includes most consumer goods.
To protect their brand, manufacturers must pay close attention to points of vulnerability in the supply chain. Raw ingredient sourcing is the first point of vulnerability. It is critical for manufacturers to conduct extensive research to ensure sourcing of ingredients and materials from trustworthy suppliers. Another important stage is right before products reach consumers. Foods and healthcare products, in particular, are vulnerable to adulteration, especially in less-developed countries.
NW: Generally, what is the most important measure that companies can take to protect their brands from counterfeiters?
JI: No one technology will solve all of the challenges. As counterfeiters have become extremely resourceful, a multi-layered approach is increasingly the way to go for optimal brand protection. This will include overt solutions such as holograms and covert techniques such as RFID (radio frequency identification) that require specific equipment to test product authenticity. In the end, it is up to the manufacturer to determine which techniques are most appropriate for a product and brand—and that depends on a variety of factors such as product category, cost and distribution.
NW: Can you offer an example of how a company has applied anti-counterfeiting technologies to minimize the problem?
JI: Walmart has attempted to tackle threats to food safety by experimenting with a new database system called Blockchain. The technology gives manufacturers a detailed analysis by having growers, distributors and retailers record transactions securely as products move upstream. Compared to what retailers currently have access to it provides a lot more information. This enhanced traceability system could allow for consumers and retailers to have a lot more confidence in a product. Furthermore, the technology’s greatest strength lies in the fact that once a transaction has been recorded, it is extremely difficult for it to be reversed or changed.
NW: What steps should manufacturers take if they see counterfeit versions of their products on the market?
JI: The first step is to ensure that all counterfeit products are taken off the market as quickly as possible. Then, they need to take a layered approach—and use different technologies—in relaunching the product and recovering brand identity. They need to apply technologies that are both overt and covert to avoid new counterfeit issues. In the interests of transparency and of repairing and strengthening brand integrity, it is important to include overt technologies so that consumers understand there is a new level of product protection.
NW: Can you tell us about the resources offered at PACK EXPO East 2017 to help manufacturers of consumer goods connect with suppliers of these technologies and the insights necessary to protect their brands?
JI: One third of the nation’s consumer packaged goods companies are located within 200 miles of Philadelphia. For these companies, PACK EXPO East promises to be a top-tier event, bringing anti-counterfeiting solutions right to their doorstep. The show will bring together 400 top packaging technology suppliers for healthcare, food, beverage, cosmetic and personal care, chemical and household and other packaged goods, serving companies of all sizes. The show will also provide free education on the show floor through the Innovation Stage, a series of 30-minute seminars throughout the day on breakthrough technologies, innovative applications and proven techniques. Additionally, the event also offers the Healthcare Packaging and Processing Conference, which gives a complete picture of the current industry landscape and of emerging technologies. The conference features a number of tracks ranging from serialization strategies to supply chain security.
For more information or to register, visit www.packexpoeast.com and www.PMMI.org.