The appeal is spreading, but RFID for beverages
still poses problems
Anything worth doing is
worth doing well. It’s an old adage, but
certainly applicable to the current state of Radio Frequency Identification
(RFID) technology. Originally designed to streamline supply chain
management, RFID has had its share of supporters and detractors, and even
though criticisms have slowed the adoption of this technology, it
hasn’t halted its process of innovation.
According to RFID: Technology, Applications and
Market Potential, a new study from BCC
Research, the global market for RFID hardware, middleware and IT market
reached $640 million in 2005. In 2006, the global market is projected to
grow to more than $713 million, and is forecasted to reach $1 billion by
2011, an average annual growth rate of 8.0 percent.
Retail RFID is currently estimated at just less than
27 percent of the overall RFID market, and supply chain management (SCM)
applications, when considered as separate from warehouse and
transportation, represent a little more than 15 percent of the overall RFID market.
Retail applications and supply chain management
applications are each growing at a considerable pace. The retail market
segment has been driven by mandates from retail giants like Wal-Mart,
Target and Metro. Since inventory control is a major financial concern, the
return on investment for this sector is more apparent than in others.
Propelled by retailer mandates, as well as ISO
regulations, many suppliers have either already implemented RFID or are in
the midst of doing so.
“[Wal-Mart’s] announcement obviously gave
passive RFID technology a kick start,” says Mark Dessommes, marketing
director at LXE Inc., Norcross, Ga. “The announcement has required
companies to purchase RFID equipment in order to become compliant, spawned
countless trials and some full-blown implementations [as a result of the
Despite the number of retailers mandating or even
leaning toward RFID, adoption is causing suppliers to take a close look at
their bottom-line return on investment. “With more manufacturers
being required to comply with the Wal-Mart mandate, more ideas are being
trialed that involve RFID, and more and more trials are moving from trial
mode to full implementation … not at the speed some experts
predicted, but it is happening,” Dessommes says. “Manufacturers
and suppliers also are looking at innovative ways beyond SCM to use RFID
data to generate ROI, such as promotion management.”
Bringing down costs
The prevailing impediment
to item-level tagging has been the “high” cost of RFID tags.
Three years ago, ARC Advisory Group, a Dedham, Mass.-based research firm
listed the average unit price of a tag at $0.91 for a passive HF tag and
$0.57 for a passive UHF tag. The firm expected that by 2008, the unit price
would drop to nearly $0.30 each for passive HF tags and an average of $0.16
for passive UHF tags. That cost continues to decline, but not at the rate
manufacturers and suppliers had hoped.
In May, RSI ID Technologies, a Chula Vista,
Calif.-based manufacturer and systems integrator of standards-based,
turnkey solutions and tags for RFID, data collection and product marking,
launched its iTrack product line, which offers the first finished,
second-generation label for less than $0.10. The new label, made
specifically for tracking products at the item level, leverages Gen 2 UHF
technology and works on items that historically have been challenging, such
as unique packaging designs, liquids and on metallic products.
“We have seen a noticeable decrease in
RFID Solution component prices, from tags to readers to software,”
observes Andrew McGrath, senior product manager for RFID solutions at
Manhattan Associates Inc., Atlanta, Ga. “With the innovative
solutions available in the market today, many organizations can see how
their RFID investments can lead to true ROI. These efficiency gains will be
realized by turning the vast amounts of RFID read data into information
that can be used by businesses to make better, more informed
As with any technology that has begun the maturation
process, there comes innovation on what’s considered to be “the
norm.” Tagsys USA, Cambridge, Mass., recently announced the
availability of its AK Family of UHF Gen 2 tags, which feature
The-Package-Is-The-Tag integrated packaging approach for item-level RFID.
Touted as the world’s first Adaptive EPC Gen 2 family of tags, the
tags consist of two parts: a universal low-cost and ultra small UHF
“Kernel” module converted into the package; and an adaptive
antenna that is customized to be incorporated within the packaging of the
item and also placed in close proximity to the AK Tag module.
According to the company, the adaptive antenna allows
the tag to become an integral part of the packaging. It is fully adaptable
to customers’ packaging shapes, materials and sizes, as well as the
nature of the goods inside the packaging. It is also fully adaptable to the
customer’s industrial environment, processes organization, reading
distances and conditions, privacy requirements and region of use.
The tag customizability provides economies of scale
and lower costs while allowing customers to deploy tags to meet their
specific needs by using an antenna that is delivered in different form
factors and using materials such as conductive ink, aluminum or copper.
RFID beverage solutions
The liquid aspect of beverages can pose tricky
problems for accurate and reliable RFID implementation. The radio frequency
absorption and reflection characteristics in beverages and beverage
packaging present more challenges with tag placement and tag read issues.
“Even with the advances in read rates with Gen2
functionality, UHF RF signals are still readily absorbed by liquids,”
says Manhattan Associates’ McGrath. “Metal cans and packaging
create RF reflections and ‘null spots,’ consequently reducing
overall readability of tagged product. Passive tag UHF Gen2 technology is
available for beverage packaging. Provided the tags and readers are
optimally positioned, read rates can be very good in conveyor environments
for single cases of product.”
Readability issues for beverages and other liquid
products can be especially problematic for Wal-Mart suppliers, since the
company’s RFID mandate is based on a frequency range that is affected
by water and metals. This pitfall can present challenges pertaining to tag
placement and application during the manufacturing process.
“Struggles between tag placement and image marketing on the product
need to be resolved in order to achieve a working solution for both
parties,” says Steven M. Dods, product development manager, labeling
at Diagraph, a division of ITW Co., St. Charles, Mo. “The good news
is that there are methods to make the tags work on these types of products.
While there are many advanced software programs on the market to identify
the optimal location of the tag location for any given product, there seems
to be a simple rule of thumb that works most of the time: place the tag in
the air gap. On most liquid-based products shipped in cases or traypacks,
there is usually a location at the top of the container between the
products where there is an air gap. This location usually gives the best
reception for the tag to communicate to the reader.”
But there are still issues related to reading a
palletized population of tags, since the inner-most product containers are
shielded from the reader by the surrounding liquids. “In some
instances, reading may only be achievable through de-palletization or
specialized antenna configuration tags,” Dods says. “The latter
increases the tag costs beyond the typical $0.10 to $0.14 range by twofold.
Many first-tier suppliers have come to understand this limitation, and have
chosen the route of de-palletization. The important part to remember here,
there are solutions for liquid products, so it is doubtful that they will
ever be exempt from mandates.”
Beverage packaging at the traypack and case-level can
use the same widespread RFID tag technology as non-liquid-based products,
Dods points out. These tags are generally short double dipole antenna tags,
which exist in sizes as small as 4 inches by 0.5 inches. “This type
of tag is offered by four top providers in the industry at about $0.14 for
low quantities,” he says. “This tag can have a white paper face
to print information, such as the human-readable EPC number, or product
name identification. The tag can be placed inside a larger sized label such
as a 4-by-2-inch or 4-by-6-inch shipping license plate. There are alternate
tag antenna configurations that increase antenna area and allow better
signal reception on difficult products, such as liquids and metals, but at
a cost of usually two times the standard ‘on-pitch’ tag.
Typically, if there is any usable air gap in the product’s container,
the standard tag will get the job done.”
In addition to the problems posed by liquids, beverage
lines run at very high speeds and presently, most RFID systems simply
can’t keep up. In response, Markem Corp., Keene, N.H., built the 800
Series High Speed RFID Applicator, which can tag cases in excess of 100
cases per minute, employs a patented system for rejecting bad tags and
features a tamp applicator configuration
designed to apply on-pitch tags such as the Alien “Squiggle”
and Avery Dennison “Strip” without conversion — all of
which allows flexibility in tag placement and potentially reduces tag
Additional options for beverage manufacturers include
lift-truck-mounted RFID readers, which are great for the improving speed
and accuracy of full pallet shipping, receiving and general warehouse
moves, as well as case some picking and quality control operations. The RX2
lift-truck-mounted RFID reader from LXE addresses a need for an
easy-to-install, vehicle-mounted RFID reader for use with standard
RFID-based forklift pallet applications such as shipping, receiving and
picking. In addition, it can be used for put-aways in environments that use
EPC RFID-based identification of pallet loads and locations. The
RX2’s mounting solution requires no permanent lift modifications or
lift-truck downtime for installation. Shipped ready-to-work with the
Windows CE operating system and an 802.11 radio, the unit can run off its
own battery or the lift truck’s power and supports the reading of EPC
Class 0, Class 1 and C1G2 (Gen2) tags.
To date, the RFID market is growing steadily,
although, not as fast as originally expected. Michael Putnam,
Markem’s marketing manager, solutions, puts the still-burgeoning
segment in perspective. “Keep in mind that barcodes took 25 years to
really take hold,” he says. “Compared to that, RFID
implementation is moving quickly. It just takes time for technology and
standards to mature and for suppliers and
customers alike to build systems that work as required.”
Wal-Mart expands RFID
Despite the debates surrounding RFID, Wal-Mart seems
to be moving ahead with its RFID initiative, announcing recently that it
will add another 300 suppliers to the list of companies using RFID
technology for its stores. The new companies will begin testing shipments
next month and are expected to go live in January 2007. It also said it
will be adding another 500 stores that will be capable of handling
RFID-tagged items by the end of the year, bringing the total to more than
I want to hear from you. Tell me how we can improve.
The February 2020 issue dives into Essentia water, their high-pH and high aspirations for ongoing innovation. Speaking of innovation, this issue also features a special report on how (and why) the zero-proof functional beverage market is growing. Also, check out what types of rifts and shifts are shaking up the wine category and discount variety stores, as well as the latest ingredient highlights (hint: exotic fruits make an appearance). To cap it off, peruse new product releases, the latest appearances in packaging, and holistic approaches to cognitive health. Thirsty for more? Subscribe to get the latest stories delivered right to your inbox.
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Check back throughout the month for additional content.