Blockchain is a record keeping technology. It is widely used in cryptocurrency to store the information and in security labels to protect packaged products from counterfeiting. Security labels enable smart tractability of the product in the supply chain, ensure the authenticity of the product. Moreover, use of security labels also helps to avoid tampering, adulterating, and counterfeiting of original product. Security labels are a vital part of the anti-counterfeiting solutions.
Counterfeiting is a major concern across the global food and beverage industry, specifically the alcohol industry, and beverage companies worldwide lose over billions of revenue. For instance, alcohol companies in Europe are losing sales revenue of around US$ 3.5 to 4 billion every year owing to counterfeiting of wines and spirits. Advance packaging, which includes smart security labelling, can help consumers to check authenticity of the beverage. This would provide consumers genuine products and enhanced revenue for beverage companies. As a result, the companies are implementing smart labelling solutions for alcohol packaging. For instance, Adelphi, a Scotland-based alcohol manufacturing company, has adopted blockchain-verified security labeling for its limited edition single malt bottles. The authenticity of the bottle can be confirmed by scanning the QR code labeled on the neck of the bottle. Furthermore, Beer brand Downstream, a beer company, has implemented QR code labeling which is an integral part of their bottle aesthetic.
Data breach is a major challenge faced across the global security labels market, as security labels are integrated with data about the product manufacturer, authentication code, among other. If data from the label is hacked or breached during the supply chain of the product, it may lead to duplication of the security label and counterfeiting of the product. Moreover, data breach may cause damage to the brand name and reputation, and loss of customer trust. Adoption of security labels is also costly, as various software and hardware have to be installed in packaging process.
Global Blockchain Based Solutions for Security Labels Market - Impact of Coronavirus (Covid-19) Pandemic
With the persisting impact of COVID-19, physical shopping has been radically altered. Several countries in Europe including the U.K., Spain, France, and Italy have implemented precautionary measures for their consumers. Enterprises in these countries are shifting their business operations to e-commerce platforms in order to support their consumers’ need to make purchases of goods across all sectors.
Various sectors are moving towards the digital space which is expected to increase the thread of counterfeiting. More official brands are showcasing designs of their products on the internet which can enable counterfeiters to copy the products and sell duplicates. As a result, there is a need to implement security solutions such as labeling solutions to adequately protect their unique design and brand reputation against infringements.
|Base Year:||2019||Market Size in 2019:||US$ 22,311.2 Mn|
|Historical Data for:||2017 to 2019||Forecast Period:||2020 to 2027|
|Forecast Period 2020 to 2027 CAGR:||6.3%||2027 Value Projection:||US$ 36,373.8 Mn|
3M Company, Avery Dennison Corporation, CCL Industries Inc., Honeywell International Inc., UPM Raflatac, Inc., OpSec Security, Inc., Tesa SE, Brady Corporation, Covectra, Inc., and Mega Fortris Sdn. Bhd.
|Restraints & Challenges:||
North America is expected to hold dominant position in the global blockchain based solutions for security labels market during the forecast period.
North America held dominant position in the global blockchain based solutions for security labels market in 2019, accounting for 32.7% share in terms of value, followed by Asia Pacific and Europe.
Figure 1: Global Blockchain Based Solutions for Security Labels Market Share (%), By Region, 2019
North America held dominant position in the global Blockchain Based Solutions for Security Labels market in 2019 and is projected to retain its dominance throughout the forecast period, owing to product developments done by the Security label companies in North America.
In March 2017, FIR-Gmov Ltd started the development of the world’s first anti-counterfeit system equipped with 3D label technology. With this platform, end users can easily distinguish between authentic and counterfeit products. The company is planning to partner with multiple 3D label manufactures in 2020 to offer secure labelling solutions across the North America market.
Major players operating in the global blockchain based solutions for security labels market are 3M Company, Avery Dennison Corporation, CCL Industries Inc., Honeywell International Inc., UPM Raflatac, Inc., OpSec Security, Inc., Tesa SE, Brady Corporation, Covectra, Inc., and Mega Fortris (Malaysia) Sdn. Bhd.
Among end-use segment, the FMCG sub-segment is expected to dominate the market during the forecast period owing to the increasing adoption of smart labels in the food and beverage industry.
Food and beverage industry is most prone to food fraud and affected the health and safety of the consumer. Therefore, the F&B industry manufacturers are using smart labels, as it helps to track the deliberate tampering, adulteration, and misrepresentation of food, which poses risk to consumers.
Moreover, the increasing counterfeiting of food products across the globe is also a major reason behind rising adoption of smart labels. For instance, according to the report published by the EU Food Fraud Network and the System for Administrative Assistance - Food Fraud, food counterfeiting is costing the global food industry over US$ 32.4 billion annually. This means companies operating in the food and beverage sector are facing huge losses owing to which they are preferring use of smart labels.
Figure 2: Global Blockchain Based Solutions for Security Labels Market Value (US$ Mn), 2017 - 2027
The global blockchain based solutions for security labels market was valued at US$ 22,311.2 Mn in 2019 and is expected to reach US$ 36,373.8 Mn by 2027 at a CAGR of 6.3% between 2020 and 2027.
Counterfeiting is jeopardizing brand image and adversely impacting revenue of companies by affecting their sales across the global market. As a result, companies primarily operating in the food & beverages, healthcare, beauty and automotive industries are investing in anti-counterfeiting solutions such as security labels to build customer trust and enhance the sales.
Security labels enable smart tracking and anti-counterfeiting. This helps supply chain companies to keep track of their consignments, and goods manufacturers are able to avoid counterfeiting of their products and maintain brand trust among the users. Moreover, decentralized ledgers help to speed up delayed authentication across the supply chain and securely accelerate the process.
Demand for security labels among end-use industries is rising rapidly due to the increasing need for authentic protection of packaged products. This is one of the major factors that is expected to fuel growth of the blockchain based solutions for security labels market.
Furthermore, demand for security labels among the food & beverages sector is increasing owing to the rising consumer preference for packaged and branded products. Therefore, increasing awareness about protection of brand image and data security has led security label manufacturers to integrate 3D security labeling technology with blockchain and protect the products throughout the supply chain and prevent counterfeiting.
Label manufacturers are integrating mobile-based product authentication platforms with blockchain to secure the overall supply chain ecosystem from counterfeiters.
Therefore, the rising demand for blockchain-based platforms from end-use industries is expected to drive growth of the security labels market globally.
Key features of the study:
“*” marked represents similar segmentation in other categories in the respective section.