According to GlobalData forecasts, total global spending by consumer goods companies on IoT hardware, services, and software in 2022 amounted to $13.1bn. This will increase to $14.2bn in 2023 and $22.7bn by the end of 2027, having grown at a CAGR of 11.6% between 2022 and 2027. This is no surprise as IoT’s use is developing among the consumer goods industries, including consumer goods, packaging, and foodservice.
IoT can be used to improve ESG issues among packaging companies
The breadth of data that packaging companies possess can provide significant opportunities to locate efficiency opportunities. Integrated smart systems, processes, sensors, data, and analytics are helping packaging manufacturers make smart decisions, automate processes, and reach efficiency and cost-saving targets. All of these come under the remit of IoT.
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Packaging companies increasingly use IoT in their factories to operate with greater efficiency and flexibility, allowing them to continuously monitor energy and water consumption. For example, Amcor uses IoT to improve its manufacturing operations’ efficiency and reduce its environmental impact by identifying ways to save energy. Amcor’s sensors monitor the energy consumption of its manufacturing facilities, which are then used to identify ways to save energy, such as by adjusting the temperature of the facilities or by automatically shutting down equipment when it is not in use. The company is also using IoT sensors to track the environmental impact of its operations in the communities where it operates. This information helps identify ways that Amcor can reduce its environmental impact and improve its relationship with the communities in which it operates.
Regulatory initiatives such as the EU’s Sustainable Finance Disclosure Regulation (SFDR) and pressure from shareholders are pushing companies to disclose ESG-related data. The Industrial Internet is helping companies monitor air and water quality and collect greenhouse gas emissions data. According to the World Economic Forum, IoT, when combined with other technologies such as 5G and AI, could help cut carbon emissions by 15%. Ball has partnered with C3.ai, an AI software provider, to collect IoT data from 60 facilities worldwide and use AI to track, aggregate, manage, and report global energy use and company progress against Ball’s goal to increase energy efficiency by 30% by 2030. Similarly, ABB has also developed a model-based predictive emission monitoring system. The system feeds variables like temperature, pressure, and flow rate collected by smart sensors alongside historical data into a neural network to predict process performance.
IoT is being used by foodservice companies to help the cold supply chain
IoT is transforming cold supply chain management by providing real-time data and insights to help businesses improve food safety, reduce waste, and improve efficiency. IoT sensors can monitor all aspects of the cold supply chain, from temperature and humidity to vibration and impact. This data can be used to identify and address potential problems early on before they cause food spoilage or safety issues. For example, IoT-enabled refrigerators can monitor inventory levels and automatically place replenishment orders when supplies run low. They can also independently regulate different temperatures on each shelf and drawer, ensuring food is stored at the correct temperature to minimise quality deterioration. IoT sensors can also monitor cooking devices and ensure food is cooked at the proper temperature to prevent foodborne illness.
Some foodservice companies have successfully implemented IoT solutions to improve their operations in several ways. US restaurant chain The Cheesecake Factory uses IoT-enabled sensors in its refrigeration units to monitor temperatures continuously. This data is sent to a central hub, allowing staff to quickly address any issues, such as temperature fluctuations, to prevent food spoilage. McDonald’s also uses IoT devices in its drive-thru systems to collect and analyse data such as vehicle count, average order value, and wait times. This information helps management optimise staffing levels and improve efficiency. McDonald’s also uses IoT-powered kitchen display systems to improve coordination between cooks, expeditors, and servers, resulting in faster order processing and better service.
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By GlobalDataOverall, IoT is a powerful tool that can help foodservice companies improve their cold supply chain management via:
- Improving food safety: By monitoring temperature, humidity, and other environmental conditions, IoT sensors can help businesses identify and address potential problems before they cause food spoilage or safety issues.
- Reducing waste: By tracking inventory levels and product freshness, IoT can help businesses reduce waste and improve profitability.
- Improving efficiency: IoT can help businesses improve operational efficiency and reduce costs by automating tasks and providing real-time data and insights.
IoT is also being used by consumer goods companies to meet changing consumer preferences
As consumer preferences are ever-evolving, IoT can improve transparency between consumers and product manufacturers, with the payoff of improving trust and loyalty from informed consumers. Companies win consumer trust by attaching scannable tags to products that provide access to information that proves products meet consumers’ preferences. Sceptical consumers will appreciate transparent information on provenance, supply chains, and nutritional values. In 2021, French software company Connecting Food created a platform for consumers to monitor packaged food journeys from field to store. Connecting Food’s packaged goods have QR codes that monitor a product’s entire journey.
Installing monitoring technology across value chains improves traceability and transparency. It also legitimises companies’ claims about provenance, farm-to-fork journey, and factory and packaging practices. Tracking the journeys of individual batches through production enables companies to offer specific details. Such technology also obviates any future need for surveys or tedious research, as the data is collected automatically. Sustainability-minded consumers will also like the waste reduction.
Additionally, IoT devices can be used to create personalised experiences for customers. IoT-integrated supply chains have the agility and flexibility to accommodate the demand for personalised and niche products. Many of these will be health products for children, elderly people, and pets with specific nutritional requirements. Since these parties may struggle to remember to order or are unable to order for themselves, many orders will be placed on automatic shopping lists, which ensures good customer retention. On nicotine products, intuitive controls that manage nicotine levels can help new consumers customise their experience to their liking and allow brands to sell a single strength of tobacco, saving production costs.
To find out more, GlobalData’s thematic intelligence analyst Shabnam Pervez recently published an IoT in Consumer Goods report – please visit here to find out more.
