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Authentication that also engages consumers

Technology once viewed exclusively as a means of brand protection and authentication is now seen as a dynamic new way to communicate with consumers.

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Implementations of brand-protection solutions can be found in products as varied as shampoo, high-end balsamic vinegar, and wine. But if any group of packaged goods manufacturers knows what it’s like to do battle with today’s counterfeiters and gray marketeers, it’s those who market personal care products through exclusive agreements with salons and specialty retailers.

Management at one such company, Intelligent Nutrients, decided to waste no time in including an authentication component in their packaging. This Minneapolis-based start-up sells a certified-organic line of personal care products such as pure-seed face serum that sells for $60 per 1.7-oz bottle. From the day IN’s product was made available to consumers, their bottles, cartons, cases, and pallets have all carried the unique identification numbers that are tied into the DATT (Digital Authentication, Track and Trace) system from Verify Brand LLC (www.verifybrand.com).

“Diversion in the salon channel and other channels we move through has become such a problem that we wanted a way to identify where our product was at any given point in the chain, from manufacturing to consumers in their homes,” says Rick Goldberg, directing manager at IN. “DATT emerged from the pharmaceutical industry, where certain drugs have to be tracked every step of the way. It’s an extremely effective defense against diverters and counterfeiters.”

For each bottle of IN certified-organic health and beauty product, Verify Brand generates a unique code that gets printed in both alphanumeric and 2D bar-code format on each bottle’s label. Corrugated cases and pallets of cases also get unique codes, and in each case, the codes establish a parent/child relationship. So the case code identifies the case as the parent of all the bottles it holds, and the pallet code identifies the pallet as the parent of all the cases it holds.

When a pallet reaches a Distribution Center, the pallet code is scanned. The Verify Brand database records this pallet code so that IN knows for certain that the pallet, its 150 corrugated shippers, and the 1,800 bottles in those shippers have been received by Distributor A and are available for valid sale to customers. As customer orders are picked from Distributor A, each case of bottles is scanned so that the database knows which unique bottle codes have been sent to which customers. If IN finds one of its bottles has been diverted to eBay or a Kmart store, the identity of the party responsible for this breach of contract is easily revealed, thanks to the unique codes generated and tracked by the DATT system.

A Web portal set up by Verify Brand has an investigator interface that lets IN employees scan in the 2D bar code or enter the human-readable alphanumeric code to check it against the central database. The person doing the scanning sees immediately a record of who filled the bottle, where it was packaged, and what the lot number, batch number, and expiration dates are.

Salons that are authorized to carry IN’s products can access a separate Web portal by entering a user name and password. They also enter the unique alphanumeric code that’s on a bottle, and if the code is not authentic, they are presented with a form asking them to identify the distributor from whom that shipment came.

The same Web portal accessed by authorized salons can also be accessed by consumers. Not only does the unique code enable them to verify the authenticity of their containers, but they can also redeem purchase points that can be used to win gifts. When a consumer enters the unique code on a bottle, a code-check mechanism built into the Verify Brand software automatically converts that code’s status from “active” to “redeemed” to prevent consumers from redeeming a code more than once.

“DATT permits us to engage the consumer at two levels,” says Goldberg. “First, we give them the unique code to verify the authenticity of their container and the product in it. And second, because they are registering their purchase, they build up points that can be exchanged for gifts.”

And the cost of implementing this track-and-trace functionality? Goldberg estimates it’s about 20 cents/bottle. But he expects that to come down, “maybe significantly,” as volumes increase.

Transition underway

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