- The global market for track-and-trace packaging was valued at $1.59 billion in 2022, having grown by more than 76% since 2017
- Market value is forecast to increase at a CAGR of 9.5% to reach just over $2.5 billion by 2027
- Market growth is likely to result from the ongoing development of blockchain technologies and the Internet of Things (IoT), which permit better tracking of assets and recording of transactions.
LEATHERHEAD, Surrey, UK and AKRON, Ohio, USA – July 19, 2022 – Supply chain security has emerged as a business priority in the wake of the global pandemic, with many companies now keen to leverage smart packaging and coding print to enable more efficient, dynamic and responsive logistics.
Smithers’ brand new market data study – The Future of Track and Trace in Packaging to 2027 – shows Covid has already accelerated demand. The total value of taggants, RFID antennas, and coding print in these applications has grown by 76% since 2017 and will be worth $1.6 billion in 2022. This reflects not only two years of unprecedented disruption, but also a new appreciation of the business efficiencies item-level tracking can deliver, especially in new sales channels.
Smithers’ in-depth commercial and technical investigation shows the upward trajectory is in no danger of plateauing. It forecasts that the market will experience a compound annual growth rate (CAGR) of +9.5% through to 2027, yielding a total value of $2.5 billion in that year.
Traceability features, including item-level tracking, are already mandated in higher-risk segments, mainly pharmaceuticals and medical devices. Healthcare will remain the biggest end-use market as mandated track-and-trace systems proliferate worldwide, with its value doubling between 2021 and 2027.
The most lucrative element of the track-and-trace market will remain industrial and transit packaging, where large unit packaging has long justified the cost of bespoke solutions, such as active RFID tagging.
These concepts and technology can now be appraised, evolved, and refined to bring the same security and efficiencies to other supply chains. There will be a rapid adoption of these track-and-trace technologies into multiple other consumer segments – food, drinks, and cosmetics – that ship perishable or valuable goods. Direct-to-consumer sales in particular will benefit from the fall in pricing for individual tagging components, and the wider trend to replace physical retail sales with e-commerce delivery.
The most lucrative element of the track-and-trace market will remain industrial and transit packaging, where large unit packaging has long justified the cost of bespoke solutions, such as active RFID tagging. Covid-19 disruptions have revealed the fragility of transnational supply chains, and while this threat is receding, it is not yet over. When it does fade totally, the imperative to develop resiliency and flexibility for the future will remain.
There is additional official interest, from the US Food and Drug Administration (FDA), for example. It has pledged to employ technology to enable smarter food supply chains, with digital product recalls taking place in a matter of minutes, rather than months.
In the short term, the market will continue to rely principally on coding print – unique alphanumeric identifiers, 1D barcodes, 2D barcodes, etc. There will be a wider interest in on-pack RFID and NFC frequency antennas to provide more dynamic monitoring in more expensive applications. Simultaneously covert taggants will prove a popular option for brand owners concerned about counterfeiting.
The greatest potential will come from software systems that process product identities, with Blockchain fast emerging as an affordable, scalable platform that can ensure security, transparency, and intelligent inventory management. Software companies are creating dedicated service lines to capitalise on this opportunity, which are actively engaging with packaging and logistics company partners.
The early adoption of track-and-trace in pharmaceuticals and rising e-commerce shipments will see paperboard account for the largest share of this market. There will also be strong demand for tracking components that can operate with other common formats, including metal, rigid plastic, flexible plastic, and paper substrates.
Historic, current and future demand for track-and-trace technology across the packaging supply chain is available now in The Future of Track and Trace in Packaging to 2027. This segments the market by tracking component, end-use application, packaging material format, and geographic region.
This is complemented by profiles of the latest technology advances, post-Covid market trends and the broader impact smarter distribution chains will have on the supply of goods across the globe.