The Impact of Upcoming Packaging Regulations on the CPG Industry

Understanding the New Regulatory Landscape

1. Digital Product Passport (DPP):The Digital Product Passport is a regulatory framework designed to provide detailed information about a product’s lifecycle, including its environmental footprint, materials, origin, and end-of-life handling. This initiative is part of broader efforts within the European Union to promote a circular economy, ensuring that products are designed for longevity, reuse, and recyclability. DPPs aim to empower consumers with transparent information, thereby encouraging more sustainable consumption patterns.
2. GS1 Sunrise 2027:The GS1 Sunrise 2027 initiative mandates the use of 2D barcodes (such as QR codes) on all retail products by the year 2027. Unlike traditional linear barcodes, 2D barcodes can store a vast amount of information, including product attributes, batch numbers, expiry dates, and more. This shift is intended to enhance product traceability, improve inventory management, and facilitate a more seamless shopping experience, both online and offline.

Impact on the CPG Industry

The implementation of DPP and GS1 Sunrise 2027 presents several challenges and opportunities for the CPG industry:

1. Compliance and Adaptation Costs:Companies will need to invest in new packaging technologies, data management systems, and supply chain processes to comply with these regulations. This includes updating packaging to incorporate 2D barcodes and developing systems to generate and manage the digital information required for DPPs.
2. Increased Transparency and Consumer Trust:By providing comprehensive product information, these regulations will enhance transparency and allow consumers to make more informed purchasing decisions. This can foster greater trust in brands, particularly those that prioritize sustainability and ethical sourcing.
3. Operational Efficiency and Supply Chain Visibility:The data-rich 2D barcodes and DPPs will significantly improve traceability across the supply chain. This can lead to better inventory management, reduced waste, and quicker responses to recalls or product issues. Enhanced visibility can also streamline logistics, optimize stock levels, and reduce costs.
4. Competitive Differentiation:Companies that proactively embrace these changes and use them to highlight their sustainability efforts can differentiate themselves in the market. This can be a significant advantage as consumers increasingly prioritize sustainability in their purchasing decisions.

Connected Packaging as a Comprehensive Solution

Connected packaging, which integrates digital technologies into physical packaging, emerges as a key enabler for meeting the requirements of DPP and GS1 Sunrise 2027. Here’s how:

1. Seamless Integration of Data:Connected packaging allows for the easy integration of 2D barcodes and digital product passports. This can be done through QR codes or NFC tags, providing consumers with instant access to detailed product information. For instance, a scan of a QR code can reveal a product’s ingredients, environmental impact, and recycling instructions.
2. Enhanced Consumer Engagement:Beyond regulatory compliance, connected packaging can be used to engage consumers in new ways. Interactive elements such as AR experiences, digital loyalty programs, and personalized content can enhance the consumer experience, build brand loyalty, and encourage repeat purchases.
3. Real-time Data and Analytics:The data collected from connected packaging interactions can provide valuable insights into consumer behavior, product performance, and supply chain dynamics. This real-time data can help companies make informed decisions, optimize operations, and personalize marketing strategies.
4. Sustainability and Circular Economy:Connected packaging can facilitate circular economy practices by providing consumers with information on how to return, recycle, or repurpose products. This not only helps in reducing waste but also aligns with the growing consumer demand for sustainable products.
5. Enhanced Traceability and Authenticity:The use of digital technologies in packaging enhances traceability and authenticity, crucial for industries dealing with issues like counterfeiting and safety recalls. Blockchain technology, integrated with connected packaging, can provide a tamper-proof record of a product’s journey, ensuring authenticity and compliance.

A Path to Compliance and Innovation

The upcoming packaging regulations, DPP and GS1 Sunrise 2027, are more than just compliance challenges; they are opportunities for innovation and growth within the CPG industry. Connected packaging stands out as a holistic solution that not only meets regulatory demands but also enhances consumer engagement, operational efficiency, and sustainability efforts.

As the CPG industry navigates this regulatory transformation, companies that leverage connected packaging will be better positioned to thrive in a more transparent, data-driven, and consumer-focused market. Embracing these technologies will not only ensure compliance but also foster a deeper connection with consumers, driving brand loyalty and long-term success.

For more information on how we can help you with our Connected Packaging insights, processes, benchmarks, tools and technologies contact mark.hewitt@cec-hq.com

Written by Mark Hewitt, CEO | Strategy & Innovation lead.

Mark has spent his career helping businesses grow and lead in digital transformation. For the last 10 years he has successfully led brand, digital, technology and packaging businesses and worked with leading CPG brands, helping them operationalise Connected Packaging Programmes around the world. In 2022 he co-created the multi-award winning Accessible QR code with Zappar.

CEC Overview

For more than 5 years, CEC has been helping clients quantify the true potential of their Connected Packaging. From revealing the true business case for Connected Packs to establishing the infrastructure and helping clients scale, CEC’s talent, tech and data insights are helping businesses better understand consumer behaviour when they have the product in their hands.