Converters Strike Back

Product security and brand theft are serious problems, and converters can play a significant role in combating them. From holographic technology to “track-and-trace systems,” there are a host of solutions for converters to apply in their operations. The following is a glimpse of some of the most popular security applications and how converters are putting them to use.

Shoplifters Beware
An increasingly popular approach to protecting products from potential shoplifters has been the use of source tagging, a method of applying thin RF (radio frequency) or AM (Acousto Magnetic) tags to folding cartons, labels, and other packaging during the converting process.

One of the technology's early pioneers is Mebane Packaging, a MeadWestvaco packaging resource specializing in pharmaceutical, beauty, and healthcare packaging. With in-line and off-line tagging capabilities, Mebane facilities can apply the tags, commonly referred to as Electronic Article Surveillance (EAS) tags, to carton exteriors or interiors, place them under product labels, or incorporate them as actual components of the packaging.

According to Tim Freeze, manager of products, solutions, and systems at Mebane, “source tagging eliminated costly retailer tagging and, because source tags are an integrated part of packaging, they are not as vulnerable to inadvertent deactivation or removal as are manually applied tags. Also, the source tags do not obscure brand identity, instructions, or other pertinent information on the package, enhancing the package's shelf presence.”

Despite this step forward, many manufacturers today continue to apply tags manually. Not only is this labor-intensive, but products without tags may have to sit in storage waiting for the tags to be applied, which delays their sale and slows cash flow.

“One of the immediate impacts on our production,” says Freeze, “is now there are three separate inventory items for the same SKU. It impacts the cost positively, because the production runs are shorter.”

Continues Freeze: “We still manufacture packaging the same way; it's just that at a certain point in our manufacturing area, when we are folding and gluing the cartons, we're applying the EAS tag to the inside of the package, so when the product manufacturer receives the packages, the EAS tags are pre-applied. As they load the product inside the packages, the EAS tag is hidden to the consumer.”

Folding Cartons Foil Theft
Also doing its part in protecting consumer products from potential shoplifters is another MeadWestvaco packaging resource, AGI/Klearfold. Headquartered in New York, the packaging specialist is a leader in the development and marketing of creative and visual packaging, specializing in premium quality paperboard folding cartons, rigid set-up boxes, and litho-laminated corrugated packaging.

Staying abreast of the need for product security, AGI/Klearfold has introduced Durafold™ security packaging, a theft-resistant option designed to help consumer product companies reduce the incidence of pilferage in retail environments.

Durafold is a sealed-end-style folding carton manufactured using a proprietary polypropylene-based synthetic paperboard said to provide greater tear resistance and stronger seals than traditional folding carton substrates.

According to AGI/Klearfold, the increased durability of Durafold cartons prevents products from being removed from their packaging in the store, making it harder for thieves to defeat EAS tags or conceal pilfered merchandise.

“As major retailers increasingly turn to consumer product marketers for anti-theft solutions, packaging is being called upon to play an ever greater role,” says Steve Onufrey, AGI/Klearfold's VP of sales and marketing. “Durafold is not only an effective deterrent against pilferage, but it helps increase retail sales by delivering high-impact graphics and allowing open merchandising.”

The company also contends that even with their enhanced strength, Durafold cartons are nearly identical to paperboard cartons in appearance and weight, and they are easier for consumers to open at home as compared to rigid plastic clamshells and other forms of security packaging.

Inspection Perfection
No matter how inventive the security solution, you have to make certain it works. Every converter that prints or coats wants to make sure the ink or coating is being applied correctly. When the ink or coating is part of a security system, it is even more vital. Promo Edge Co., Neenah, WI, a specialist in game pieces, coupons, and labels, recently invested in Unilux's UV Illumination Kit.

The kit, available for use with Unilux's Litho-O-Light Series, is said to enable press operators to monitor the application of coatings at full production speeds across the full width of the web.

“We run the game pieces [coupons or labels] and then we run the black light on them. We use it to verify that it is printing, but there are other uses. We use it to make sure we have varnish coverage, to make sure it is not breaking,” explains David Sturm, technical resource specialist at Promo Edge.

Promo Edge has been using the Unilux illumination kit for just three months, but it is already pleased with the results. “It makes the job a lot easier,” says Sturm. “It also makes the job a lot faster, because now with the Unilux black lights, we don't have to stop the press; we can inspect things at full press speeds.”

Before changing to the Unilux illumination kit, Promo Edge was using a black light bar that slowed production down, Sturm explains, because operators were not able to use it while the press was running.

The Unilux kit is said to more than double the ultraviolet emitted from its standard stroboscopic inspection lights. Reportedly, it also allows press operators to see more details and images that have been virtually invisible in real time under normal strobe lighting.

Holographic Magic
One of the most innovative and popular methods used for product security, especially brand protection, is holographic technology.

A leader in hologram security applications, The Kurz Group has led the way for many years as one of the world's largest suppliers of hot stamping foils. In addition to the company's Kinegram®, which is used for high security and governmental applications such as bank notes, travel documents, IDs, and credit cards, Kurz has also developed Trustseal® brand protection. The Trustseal is produced with a sophisticated proprietary technology and is based on diffractive optics. Thanks to its extreme brilliance with clearly defined optical effects, even an untrained eye can distinguish easily between originals and counterfeits.

Trustseal is said to meet three primary requirements for an optically variable device (OVD): It is easy to communicate, easy to verify, and hard to copy. Products using the Trustseal can be security-labeled manually or by machine. For high volume applications, the product packaging can be protected by hot stamping.

Oliver Moesgen, North America's sales and marketing manager of security products for Kurz, says one of the biggest problems for converters and end-users is recognizing not all holographic technologies are suitable for brand protection.

“The concept of using a hologram or holographic technology as a security feature has been compromised in some cases through its use in decorative packaging applications,” says Moesgen. “At Kurz we work hard to avoid confusing ‘brand protection’ with ‘brand promotion,’ and, therefore, we focus the Kinegram and the Trustseal exclusively on security applications.”

Moesgen adds, “Kurz differentiates itself from other hologram manufacturers because we would not supply our two proprietary security technologies — the Kinegram and the Trustseal — for purely promotional applications such as chewing gum [packaging] or other decorative applications. We would rather propose one of our standard diffractive patterns as a more cost-effective solution.”

Another fact converters must face is product security is a costly endeavor, although it is one, Moesgen maintains, worth investing in. “That is one of the challenges we face when talking about our value-added products to the converting industry. It is, however, a tremendous tool to show to your customer. It says, ‘Look, I am doing something to protect my product against knockoffs.’ And for the marketing side of the business, it adds some additional dimension to the whole design of the package.”

Coming Attractions
We have only scraped the surface of the many security applications available to converters. There are many others, from chip and chipless technologies to innovations in security inks. Another recent technology is taggants, individual multicolored particles that can be used for tracking and tracing in packaging, labels, documents, etc.

H.B. Fuller Co. and Tracking Technologies have formed a strategic alliance to market and service micro-particle security systems for applications in the pharmaceutical industry. These systems, which utilize taggants, are designed to be used as a defense against counterfeiting, product diversion, and brand piracy by adding covert chemical codes to many applications, including packaging, paper, plastics, and adhesives.

Explains Pam Sleet, sales/marketing manager at H.B. Fuller, “In our preliminary discussions on pharmaceutical packaging, [we learned] because of the nature of the product, we could provide a unique code that may communicate who the manufacturer is. It may identify the lot number. It may identify the location of the manufacturer. Whatever information they want to communicate, we could specify a code that could be utilized for that purpose.”

Continues Sleet, “In the field, it could be utilized for authentication purposes. One of the key features is the readability of this item, at least in this technology, because it is a simple technology that has forensic capability [hidden features that aren't obvious to the naked eye] but is also field-readable.”

As Sleet explains, taggants aren't a new phenomenon. “There is some similar technology. It's been around for a while, at least conceptually. Our strength is the ability to manufacture and mass-produce these codes in high volume, quickly.”

H.B. Fuller will be working as the distributor for these taggants, which have been developed at Tracking Technologies and are available now.

It is a big responsibility for converters to invest the manpower, time, and money in product security, but now more than ever, it a responsibility that many converters are eager to undertake.

Defining Brand Theft
According to recent statistics, 7% of all consumer products are victims of brand theft. More surprising is the government's recent findings that brand theft (mainly counterfeiting) is suspected of funding terrorist activity around the world.

Brand theft is any activity that results in loss of product quality or consistency, devalues the customer's perception of a product, or causes a company to lose either revenues or profits. Following are the six forms of brand theft:

  • Counterfeiting: Producing products or packaging that are similar to the originals and then sold as authentic products.
  • Diversion: Buying legitimate goods at a low price in one region and selling them at a higher price in competition with legitimate vendors in another region.
  • Duplication: Copying products, labels, packaging, and instruction/usage information.
  • Substitution: Placing inferior products in authentic or reused packages.
  • Tampering: Altering packaging and labels and using diluted, pilfered, or stolen goods in place of the real product.
  • Returns and Warranty Fraud: Returning counterfeit or stolen stock for refunds.
Definitions courtesy of Westvaco Brand Security

Setting Up a Program to Guard Against Brand Theft
According to research done by Westvaco Brand Security Inc. (WBS; a wholly owned sub. of MeadWestvaco Corp.), a leader in developing and implementing brand protection programs for end-users and their converters, brand theft is a huge and growing problem costing brand owners an estimated $500+ billion in annual revenue and growing at the rate of 15% a year. The World Trade Organization estimates from 5%-7% of all current global transactions are counterfeit.

To fight this growing trend, what's needed is a proactive approach and a strategic vision to address the issues associated with brand theft, says Dr. J.E. Parker III, VP of technology and technology services at WBS, who suggests the following steps in setting up an individualized program to guard against brand theft.

Take Ownership
The implications of brand theft, a term covering counterfeiting, diversion, duplication, substitution, tampering, and related criminal activities, can be vast and far-reaching.

First, brand theft has the potential to siphon off revenue and dilute profits. Second, there is the potential for damage to the corporate reputation. Lastly, to ignore the brand-theft issue is to run the risk of inconsistent product quality, wide price swings, and “hearsay” experiences that reduce consumer confidence and negatively impact the price/value relationship that defines a brand for consumers.

A successful, enterprise-wide brand protection strategy requires senior management be apprised of how thieves threaten your brand, thereby securing their commitment to champion the initiative within the organization.

Create a Team
Now that you have senior management's ear, it's appropriate to let people know an environment is in place to solve the problem. A company should assemble a cross-functional team of executives that includes brand managers, intellectual property lawyers and others — empowered to make decisions — and to create a system for controlling the flow of information both within the organization and between suppliers. The company also should look to other organizations within its industry that may be facing similar problems. More and more coalitions are being formed worldwide, with brand owners pooling resources to ensure that the proper legislative and regulatory bodies understand their concern.

Assess the Situation
An initial step is to evaluate the current threat by region and by brand. Is it counterfeit products or counterfeit packages? Is it product substitution or product diversion? What markets are affected and how? How, and at what point in the supply chain, is the product authenticated?

Once the initial assessment has been completed, existing policies to deter brand theft should be initiated and reviewed. The impact of brand theft to your firm should be calculated. Then develop clearly defined benchmarks to gauge overall program effectiveness.

Define Your Objective
Control, deter, catch, or prosecute? The objective of a brand-protection program is often defined in terms of controlling or deterring the problem, catching or prosecuting the perpetrators, or a combination thereof. Which option a company chooses may depend on a variety of factors, including the severity of the problem, the options available, and the company's philosophy, all of which can vary depending on regional and cultural differences.

Find the Right Solution
With a strategic plan now in place, it's time to begin addressing the specifics of a comprehensive brand protection program using traditional and emerging technologies combined in new ways to help brand owners stay one step ahead of the counterfeiter.

Finally, your brand security program should address communication. Each brand owner needs to determine how specific to get in discussing the program internally as well as externally. For obvious reasons, the complete elements of the program should be balanced but restricted, so that only a few people know all the components (particularly when consumer authentication is required).

MeadWestvaco, Stamford, CT; 203/602-4400;

Unilux Technologies, Saddle Brook, NJ; 201/712-1266;

Leonhard Kurz GmbH & Co., Fürth, Germany; +49 9117141-0;

H.B. Fuller, St. Paul, MN, 651/236-3000;

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