Vandagraf has been researching and publishing a series of reports on ‘Brand Protection Solutions’. Each report focuses on specific vertical markets or end user industries - In this case Drink & Food Products, which covers a range of product categories:
Drink products - Alcoholic beverages, soft drinks and mineral waters
Food products - Honey, cheeses, smoked meats and other regional speciality products, chilled & frozen foods, limited life fresh foods, processed foods
Though grouped together in this report, Drink & Food products generally have relatively little in common in terms of product related crime. Alcoholic Drink products are often counterfeited and are also widely subjected to various forms of refilling and / or dilution. Alcoholic Drink Products are also widely targeted by smugglers (particularly to countries with high excise duty). Food products are most vulnerable to tampering of various sorts, together with a few cases of counterfeiting most commonly of high margin regional products.
Global financial losses due to Drink products in 2008 have been estimated at $9.6 billion with Food products accounting for a further $2.1 billion in that year (not including the market for ‘quality and freshness’ devices and solutions).
Liquors and spirits and fine wines tend to be priced most highly in the Drink sector and generally have strong margins. These product categories continue to be the primary focus of product related crime in the Drink sector. Other alcoholic and non-alcoholic drinks are also subject to product related crime from time to time.
Alcoholic drinks typically employ complex cap closures / seals to deter re-filling. These cap closures / seals often also carry authentication devices. It is also possible to make life more difficult for counterfeiters by introducing anti-counterfeit technology and features within the labelling, sealing or outer packaging. The use of non-standard special bespoke glass bottles can offer some further barrier to counterfeiters. Liquor / spirits are also a high theft product category and electronic article surveillance tags / labels are widely used at retail.
In addition to liquors and spirits, fine wines which can command very high prices are also vulnerable to counterfeiting. Several systems now exist for protecting vintage wines from counterfeit attacks. RFID is already used in conjunction with security ink marking and other security features at bottle level.
Within the overall market for food, it is branded packaged processed food products and meats most often potential victims to counterfeiting. Tampering in its various forms is generally a more significant and concerning problem in the Food sector today, including grazing (ie: Sampling of products in the retail store without purchasing), tampering for the purpose of obtaining fraudulent cash refunds, pilfering (ie: Removal of some product from its packaging - somewhere along the supply chain or at retail), malicious criminal tampering (poisoning or spiking of products, often accompanied by extortion demands).
The market for traditional brand protection products in the Food sector is relatively small compared to the market for such products for the Drink sector. Tamper evident features and devices are, on the other hand, very widely used in the Food sector.
Within the Food sector, there is also a major demand for products and devices that assure ‘quality and freshness’ of products. Such ‘quality and freshness’ devices may be viewed as being a component of the market for brand protection solutions and are used widely for limited life fresh, chilled & frozen foods including fruit and vegetables, meats, cheeses and other products.
Leading brand owner companies are taking an increasingly robust approach in their fight against product related crime to slow the resulting loss of revenues and erosion of the value of their brands.
This report describes the different approaches to brand protection that are available to Drink & Food products brand owners, outlining the different strategic considerations that are appropriate across the different segments of this diverse marketplace.
An overview of problems and key drivers, together with descriptions of appropriate solutions, including actual case studies are included. The case for 1st, 2nd and / or 3rd level brand protection technologies is examined.
Drink & Food Products - Value of Market for Brand Protection Solutions
Overview - Drink Products
Overview - Food Products
1. Summary Overview - Drink & Food Products
Table Security risks - Product related through the supply chain in Drink & Food Products
Table Countermeasures - Appropriate to product related crime in Drink & Food Products
Table Propensity to produce or consume counterfeited Food and Drink products - OECD
A Brief History of Counterfeiting of Drink & Food Products
2. Drink Products
2.1 Market Overview - Industry structure & leading companies - Drink Products
2.2 Product Related Crime - Drink Products
2.2.1 Key criteria that make certain product categories attractive to counterfeiters
2.2.2 High rates of Excise Duty on Alcoholic Drinks naturally attracts smuggling and counterfeiting within the EU
2.2.3 Panda Soft Drinks Example
2.2.4 Case Study - UK Food Standards Agency Issues Warning on Counterfeit Vodka in 2005
2.2.5 Case Study - Fraud Database Leads to Vodka Raid in the United Kingdom in 2008
2.2.6 Case Study - Counterfeit Product / Packaging - Johnnie Walker Whisky
2.2.7 Counterfeiting and Product Quality in the Wine Industry
2.2.8 Case Study - Perrier Sparkling Water Benzene Contamination - Handling a Product Recall - Limitation of Damage to a Brand
2.2.9 Case Study - A Public Relations Disaster for Coca-Cola Dasani brand bottled water in the United Kingdom
2.3 Brand Protection - Drink Products
2.3.1 Security Packaging / Labels / Shrink sleeves in the Liquors / Spirits market - Tamper evident and Holographic Devices