rfid.averydennison.com
New Market Opportunies
for Label Converters
Wrien and produced by the
editors of RFID Journal
Avery Dennison
Smartrac
White Paper
Converter Leverage
Sponsored by
In the past three years, RFID has
begun to gain a foothold in other
sectors, including cosmecs and
beauty, food producon and
distribuon, aviaon, automobile
manufacturing and logiscs and
fulfillment. IDTechEx Research,
a firm that has been tracking the
RFID market for nearly 20 years,
esmates that the market for RFID
products will grow to $13.4 billion
in 2020, from $11 billion in 2018.
Other research firms are predicng
even faster growth.
The adopon of intelligent labels in
new industries is creang addional
opportunies for label converters.
This white paper provides insights
into where the biggest market
opportunies are and how to seize
them. At the end of the paper, we
will provide addional resources
that label converters can use to
aid expansion into the RFID market.
Radio frequency idenficaon (RFID) has
been used to idenfy, track and manage
objects for several decades. For most
of that period, the technology was used
in niche applicaons, such as tracking
nuclear materials, automated toll collecon
and access control. Over the past decade,
our labels embedded with an RFID inlay
have proven to deliver big benefits to
apparel retailers. This year, more than 16
billion inlays will be consumed and an
esmated 10 billion of those will be used
to track apparel in retail applicaon.
RFID has begun to gain a foothold
in other sectors, including:
Aviaon
Cosmecs
& Beauty
Food Producon
& Distribuon
Automobile
& Manufacturing
Logiscs
& Fulfillment
Page 1
Page 2
Market Opportunes
In 2018, the Internaonal Air
Transport Associaon (IATA) voted
to require its airline members to
begin tracking passenger luggage
starng in 2019. At its 75th annual
General Meeng, held in Seoul,
South Korea, in June of 2019, IATA
adopted a resoluon supporng
the global deployment of RFID
tracking for checked airline baggage.
The move to RFID has been a wide-
scale collaboraon between all
stakeholders across the industry,
including airports, airlines, luggage
handlers and technology providers.
IATA reports that it plans to work with
airlines and airports to bring RFID to
80 percent of checked for air travel
baggage within the next three years.
Delta Airlines has already transioned
to RFID hands-free technology at
84 of its largest domesc staons,
which handle, more than 85 percent
of the bags in the Delta system.
Delta says that due to its use of RFID,
99.9 percent of bags are now being
accurately scanned and tracked,
compared to an industry average
of 85 to 90 percent with bar codes.
Airlines served more than 4 billion
passengers in 2018 and handled
4.86 billion bags. With the current
handling system, an esmated
27 million bags will be lost in 2020
and will cost the industry $2.7 billion,
creang a powerful incenve for
airlines to adopt RFID technology.
And with passenger trac expected
to nearly double to 7.8 billion in
2036, the number of baggage tags
required will also likely double,
creang a huge opportunity for
label converters in this sector.
According to a 2018 report by
Zion Market Research, the half
a trillion dollar global cosmec
products market is expected to
consistently grow by about 7 percent
a year through 2024. Cosmecs has
typically been a tricky product to
track with RFID due to the problems
created by the small size of many
of the products (lipsck, eyeliner,
and so on) and the materials used in
some of the packaging. But recent
advances in inlay designs have
largely overcome these issues. Avery
Dennison, for example, has developed
the AD-163u8 (60mm by 4mm) and
the AD-180u7 (26mm diameter)
RFID inlays specifically for cosmecs.
Aviaon
Cosmecs & Beauty
Roughly $1 trillion worth of food
produced annually is wasted,
according to the Food and
Agricultural Organizaon of the
United Naons. That’s about $130
worth of food for every man, woman
and child on Earth each year.
In developing countries, about
40 percent of losses occur at post-
harvest and during processing.
In industrialized countries, more
than 40 percent of losses happen
at retail and consumer levels.
RFID can reduce food waste by up
to 20 percent by accurately aligning
inventory with variable demand,
improving processes, opmizing
producon, increasing visibility of
expiry dates and facilitang food
donaons. In fact, food traceability
technologies, including RFID, can
enable food loss reducon by
85 million tons by 2030, according
to the World Economic Forum.
Given that the Earth’s populaon
is expected to grow from 7.7 billion
today to nearly 10 billion in 2050,
the demand for food and the need
to reduce waste is likely to drive
demand for improved tracking and
management of food from farms
to tables. New RFID tags, such
as Avery Dennison’s microwave
resistant (AD-25Xr6-P), which is
suitable for accidental microwave
usage, making tracking food easier,
safer and more ecient.
Food Producon & Distribuon
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Global automobile sales topped
$4 trillion in 2018, and while growth
has slowed, global compeon
amongst automobile companies
has increased. This growth is
pushing companies to look for greater
eciencies to improve margins
and gain a compeve advantage.
Some companies, such as Johnson
Controls, have begun tagging parts
bins (Johnson Controls has tagged
nearly 1 million containers to
date) to reduce the need to
buy addional containers each
year and to have beer supply
chain visibility. Key manufacturers
and other parts suppliers are also
starng to track crical parts to
ensure customer safety, and this
trend will accelerate in the coming
years. RFID is an ecient and
reliable opon for this segment.
UPS says it ships 20 million packages
a day and while FedEx delivers
another 14 million. With e-commerce
connuing to grow in popularity –
global e-commerce sales grew
18 percent in 2018, according to
Internet Retailer – the pressure on
logiscs and fulfillment companies
is increasing. Some leading
companies such as Deutsche Post
have turned to our technology to
track packages. Growth in this
sector is just beginning to accelerate,
but the market potenal is massive
as RFID increases in popularity and
ease of use.
These are not the only market
opportunities for label converters
looking to expand in the intelligent
labels market. Health care is a
growing market, as more hospitals
use RFID to track consumables,
such as bandages, gauze, surgical
sponges, intravenous fluids and
even patients and other personnel.
Some pharmaceutical distributors
are using RFID internally to
manage shipments and deliveries.
Events companies are using RFID
to manage attendees, and more
hotels are beginning to use RFID
to manage linen and consumables,
such as soap and shampoo. In
addition to these industries,
companies in other industries
are continually finding new
uses for RFID, creating business
opportunities for label converters.
Automobile Manufacturing
Logiscs & Fulfillment
Other Opportunies
Page 4
The first step toward growing your
business by oering our technology
is to become more knowledgeable
about the basics of RFID and the value
it can provide. Label converters do not
need to be experts in the technology
or its applicaon, but sales sta
need to be able to speak intelligently
to customers about the dierence
between Near-field communicaon
(NFC) and passive UHF RFID (RAIN
RFID), about inlays that will work on
dierent products and environments
and about the range of label opons
for each individual use case.
Manufacturing teams need to develop
skills in converng regular labels
into intelligent labels. They need to
understand the dierent substrates
available for inlays, how dierent
antenna shapes perform in dierent
applicaons, and other factors that
relate to how customers use our
technology in their operaons.
Resources available to educate sales
and manufacturing sta are listed at
the end of this white paper.
High-end RFID inlay inseron
equipment can be expensive, but
label converters can get into the
RFID market without invesng
hundreds of thousands of dollars.
For small to mid-size volumes,
converters can use a “wet” RFID
inlay (one with adhesive) in a
tradional label applicaon process
to produce intelligent labels. This
low-cost approach is ideal for jobs
that don’t require a high level of
customizaon labels.
For mid-to high-volume orders,
converters can purchase dry inlays
from a company such as Avery
Dennison and use an on-pitch inlay
form and a laminaon/mul up
converng process. This allows for
a custom face stock, but requires
a Servo press. The same process
can be used with Avery Dennison’s
Smarace
TM
technology, which
replaces the PET substrate with
a paper substrate to reduce the
environmental impact of inlays.
Converters will also need to invest
in an RFID verificaon reader to
ensure our labels have not been
damaged during the converng
processes. Anstac material on
the floor is recommended around
working staons to reduce the
chance of damaging our labels with
an electrostac discharge (ESD).
Employees handling finished labels
should also wear special clothing
and shoes to reduce ESD damage.
As a converter’s business grows,
it can consider invesng in a high-
end inlay inseron machine from
a company such as Bielomak,
Melzer, Muhlbauer or Tamarack.
Seizing the Market Opportunity
Technology Required
Product Porolio
It is important to choose an inlay
provider that has a broad product
porolio so that tags with inlays will
work on a wide variety of products.
Avery Dennison, for example, provides
not just passive HF, NFC and passive
UHF RFID inlays, it provides an array
of inlay sizes and shapes to ensure
its label converter partners can meet
the needs of their customers.
Quality
Just as important as a broad product
porolio is a high quality product. A
fracon of RFID inlays in a producon
run can have a short read range or be
completely dead due to a defecve
chip or other issue. It’s important that
these not be converted into labels
and delivered to customers. Avery
Dennison has extensive quality control
processes at each stage of the inlay
producon process to ensure that all
inlays are working properly, and it not
only marks defecve inlays (as most
inlay providers do), but also smashing
the chip so the tag will not work,
cannot be used and therefore will not
enter the market. Avery Dennison has
received ARC accreditaon for quality
from the Auburn University RFID Lab.
Sampling Service
Geing sample tags quickly is
important so that converters can
provide samples to their customers,
as they begin exploring whether
RFID will work in their applicaons.
Avery Dennison will provide samples
of most of its inlays within 24 hours.
It also provides samples of all
new inlays developed for its label
converng partners when available.
Technical Support
Choosing the right inlay for a specific
item a customer wants to tag is
crucial. It’s important to work with
an inlay provider that can provide
advice on the right inlay to use and
the right placement of the finished
label on the product. In some cases,
Avery Dennison will take product
samples to its systems labs and
reproduce the scenario in which
the customer plans to use our
technology (tracking cases moving
past a portal or down a conveyor,
for example). They will generate a
professional analysis of the best
inlay to use and the best locaon to
place the finished label.
Some projects will also require
custom tags. Avery Dennison design
facilies can develop custom inlays,
and if there is enough demand for
them, the design can be created at
no charge to the converter.
Avery Dennison also has deep
experse in label converng, can
provide inlays in the proper formats
(four dry inlays across a sheet, for
example), advise on direct converng
without inserng the inlays and
ensure converters are producing the
highest quality finished labels.
Choosing an Inlay Provider
The key to developing a successful
business is choosing the right inlay
provider. An inlay is the RFID transponder
embedded or inserted in the label
structure, thus making it an intelligent label.
There are several key factors you should
consider when choosing a provider.
Capacity
It’s important to choose an inlay
provider that has the manufacturing
capacity to deliver the inlays you
need in a mely manner. Avery
Dennison, for example, has invested
in expanding its capacity over the
past five years, and it has set up
distribuon facilies around the
world in order to deliver the inlays
when and where they are needed.
In September 2019, it opened a
new RFID manufacturing facility
in Timisoara, Romania. This facility
will help service the demand for
intelligent labeling across the
European market.
Market Development
Beyond the factors above,
converters should also work with
inlay providers that are helping
to develop new markets. Avery
Dennison has worked with GS1 to
beer understand the needs of
retailers and other users of our
labels, parcipated in IATA meengs
to understand the benefits of
airlines using RFID to track baggage
and engaged with the re industry to
help promote the use of our labels to
track res. These eorts ulmately
benefit label converters, as well as
the inlay provider.
Leads
Some inlay manufacturers will
also steer customers to their label
converter partners. Avery Dennison,
exhibits at a wide variety of events
worldwide, including RFID Journal
LIVE! and Labelexpo, and meets with
potenal users of our technology. It
will then ulize its network of label
converter partners to fulfill the
orders. This is an important aspect of
growing a label converter’s business,
especially when it first enters the
intelligent label market. Avery
Dennison also facilitates contacts
with reader manufacturers and
systems integrators.
Page 5
Governments around the world are
looking to increase recycling and
reduce waste going into landfills,
especially waste that can leach
chemicals into soil and groundwater.
It’s important to partner with an
inlay manufacturer that takes
sustainability seriously. A key is
making sure that our technology
used in a product doesn’t prevent
that product from being recycled.
Avery Dennison has been making its
label materials more environmentally
friendly for years, and it is also able to
manufacture inlays on paper, rather
than polyethylene terephthalate
(PET), to reduce the contaminaon of
the recycled paper with plascs.
Some label converters might go
a step beyond looking at inlay
manufacturers that provide
environmentally friendly inlays and
consider how the inlay is produced.
Many companies use antennas that
require harsh chemicals to etch
away aluminum to create an antenna.
Avery Dennison uses laser-cut
aluminum antennas that require no
chemicals and create no waste (the
as excess aluminum is reprocessed
and can be used in future runs. The
amount of aluminum in the antenna
is typically less than the amount of
metal used in decorave packaging.
A Word about Sustainability
Page 6
Avery Dennison RFID
Americas / Europe / Asia Pacific
866-903-RFID (7343) / +1-770-965-0807
rfid.info
@
averydennison.com
rfid.averydennison.com
Avery Dennison RFID
Avery Dennison’s website has
informaon on how to get started
using RFID, as well as informaon
about industry soluons, Avery
Dennison’s large RFID product
porolio, as well as news about RFID.
RFID Journal
RFID Journal is the leading source
of news and informaon about
radio frequency idenficaon and
its many business applicaons.
RFID Journal publishes news
stories about RFID products and
deployments daily. In addion,
premium members have access to
a vast archive of end-user case
studies and recording of presentaons
done at RFID Journal events.
RFID Journal LIVE!
RFID Journal LIVE! is the world’s
largest conference and exhibion
focused on radio frequency
idenficaon and its many business
applicaons. It features keynote
addresses by leading end users and
an extensive conference program
broken up in to tracks focused on
vercal-industry applicaons
(retail, manufacturing, health care,
etc.) and on various aspects related
to RFID deployments, such as
integrang RFID and blockchain
technology. This year’s event will
feature a special educaonal
seminar for label converters,
hosted by Avery Dennison.
RAIN RFID Alliance
RAIN RFID is a global alliance
promong the universal adopon
of UHF RFID technology in a way
similar to other wireless technology
organizaons including NFC Forum,
WiFi Alliance and Bluetooth SIG.
GS1
GS1 developed the standards for the
Electronic Product Code numbering
system and the original passive
UHF RFID air interface protocol.
It’s website has a wealth of data
about these standards as well as the
applicaon of them in retail, general
merchandise, consumer product
goods and other industries.
Addional Resources
Free RFID Seminar for Label Converters
RFID-enabled labels are currently
being adopted in many industries,
and we are seeing an increase in
demand for the technology from
customers across mulple segments.
RFID improvesitem-level visibility
throughout the supply chain, which
is enabling traceability and boosng
eciency, making it increasingly
important for companies across the
world to adopt this transformave
technology. This workshop, presented
by Avery Dennison, will oer advice
on how to enter and understand the
RFID ecosystem.
Experts will explore the trends
and demands shaping the future
of RFID, provide insights into
selecting the appropriate chips and
inlays, share best practices for the
converting process and provide
insight into what the future holds
for connected products. Discover
how our labels can unlock new
business opportunities.
For your free pass, please contact:
customerservice@rfidjournal.com.
Understanding the Value of RFID & the Future of Avery Dennison Smartrac
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