This could finally be the year when the promise of radio frequency identification (RFID) technology begins to make itself known at the individual item level—at least for some industries. The beverage industry, however, is probably not one of them—yet.

DTechEx, a Cambridge, UK-based RFID technology and consulting company, says that the price of RFID chips is poised to drop dramatically this year. This development could allow the chips to finally become cheap enough to make it economically feasible to use them on items smaller than the case or pallet level. For some consumer product industries, that could mean RFID chips at the individual product level, which would open up all kinds of new possibilities when it comes to supply chain benefits like individual item tracking.

In fact, item-level RFID tags and systems will begin to represent the world’s largest RFID market by value through the next decade, according to IDTechEx. By 2016, it will be $13 billion (with about 550 billion items being RFID-tagged).
To date, companies have tagged pallets and cases, often solely in order to comply with large customer (i.e. Wal-Mart and Target) requirements, regardless of cost-effectiveness. From this point forward, according to IDTechEx, companies will begin tagging at the item level in order to achieve greater cost-effectiveness.

While IDTechEx predicts the consumer goods industry will quickly adopt RFID tagging, it believes the food and beverage industry will be slower to adopt the technology. A recent report from IDTechEx explains: “It is tough to get down to the price that justifies tagging a can of soda in a supermarket.”

However, as technology evolves (including the introduction of RFID ink that makes tagging easier and cheaper), IDTechEx believes that the average price by 2016 will reach just under 1 cent for an item level tag.

Besides cost, another reason that RFID technology has not achieved better penetration into the beverage industry is the inherent nature of the products themselves. That is, the radio waves used by traditional RFID technology are absorbed by liquids and reflected by metal.

“There is a current push in the pharmaceutical industry for ‘track and trace,’” states Matt Ream, senior manager, RFID systems, for Zebra Technologies (Vernon Hills, IL). “I think eventually, this business case will find its way to the food industry, especially related to interest in fresh produce. One would then assume that the technology would get pushed into other segments, such as beverages.”

Currently, Ream believes that advances may be made in the beverage industry with RFID in plastic containers. “However, I find it hard to believe that you will ever get RFID tags on individual aluminum cans,” he says. “But, one thing we’ve learned is never say never.”

Two other companies that “never say never” are Crown (a US-based supplier of packaging at the global level) and QinetiQ (a UK defense and security technology company). In June 2006, they announced that they were jointly developing RFID tagging that will turn metal packaging into an antenna and help reduce the cost of RFID technology. The technology will allow processors to integrate ultra-high frequency (UHF) RFID tags into metal packaging at the item level.
The plan is to target manufacturers of high-end products, such as perfumes, liquors and ink cartridges, before moving to the wider beverage market.

As noted earlier, metal poses problems for RFID with the metal interfering with the signals sent between the RFID tag and the reader. This new technology will mitigate these problems by actually turning metal’s inherent properties into an advantage. One way is by turning the metal itself into part of the RFID system. That is, the metal substrate will have an integral role in the way the technology functions. With beverage cans, the cans themselves would serve as antennas, which would simplify the production of the RFID tags and reduce costs further.

Electronics manufacturer NEC in Japan also is moving forward with item-level beverage product RFID tagging. It is teaming up with a Japanese container company, Toyo Seikan Kaisha, to develop an RFID-enabled bottle cap prototype, and it plans to begin selling the caps to the commercial beverage container industry in Japan by 2008. Japan Crown Cork Co. will begin mass production of the bottle caps in 2008.

The caps, embedded with 2.45 GHz passive RFID tags, will offer bottling companies a way to provide product and promotional information to consumers. That is, customers in stores can use in-store electronic scanners to read the caps and learn about ingredients and other product information prior to making purchase decisions. The technology does not have the problems associated with metal and liquids that traditional RFID chips have had in the past.

Beverage companies also can use the technology to monitor movement of their products, tracking where the beverages are in the stores and how quickly they are selling, which will help to improve inventory management.

n adopting the RFID-enabled caps, beverage companies will be able to continue using their existing manufacturing/bottling equipment, without being required to install new capping equipment.

NEC and Toyo Seikan Kaisha also are exploring technology that would allow the RFID tags to be embedded in metal cans, plastic containers and even paper packages.

idtechex.com • zebra.com • crowncork.com • qinetiq.com • nec.com • toyo-seikan.co.jp

From Beverage World July 15, 2007