Avery Dennison uses RFID in sustainability solutions

On exclusive interviews with the IoP Journal, the global company defined the concept of the Regenerative Retail Economy and explained why brands must be ready for it

Edson Perin

Sustainability is on the agenda of companies and consumers, today. During the Covid-19 pandemic, according to market studies, there was an increase of 22 percentage points in the importance of sustainability as a crucial item in the choice of a brand by buyers, which now reaches 55% of consumers.

On the subject, Tyler Chaffo, global sustainability manager at Avery Dennison Smartrac, explains how radio frequency identification (RFID) technology has helped companies in various sectors, including food, among others. On the concept of the Regenerative Retail Economy, Chaffo explained that the term “regenerative”, which is now used with a focus on retail, has historically been associated with the agriculture sector. “Now we’re seeing that sort of thing being transcended into other industries. And regenerative means different things to different people.”

According to Chaffo, the concept of “regenerative” is part of the Circular Economy and is a systemic approach to economic development, really designed to benefit companies, societies and the environment. “There’s really a contrast when you look at taking it [buying it] and generating waste, which is the linear model. Therefore, a circular economy is generally regenerative by design, a kind of decoupling of growth from consumption of finite resources, which makes us consider the source of materials to make products.”

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Tyler Chaffo

“[Hence the question:] how can I get more plastic out of the ecosystem than I’m putting in there with my retail products? And then you start to see companies that have publicly made the commitments to adopt a regenerative approach, that are really basing their strategies on the positive or regenerative future in terms of resources. And I think that’s really what you’re going to see happening more and more,” says Chaffo.

The whole movement of several retail companies in this direction shows that sustainability is not just a matter of the future, but something for now: a problem that we must solve every day from now on. “In supply chains, having more resilient, more regenerative and more sustainable initiatives has been a positive factor,” says Chaffo. “We are looking for RFID products that have less environmental impact, better plastic-free production methods for retail apparel applications, for example.”

“We recently announced that our climate goals were approved by an organization called Science Based Targets Initiative, which is, I would say, the gold standard in terms of weather. Here we have the biggest impact: our solutions help customers measure and validate their emissions. We recently launched Atma.io, which works in conjunction with our physical products to create connected products and take this digital idea and make it more powerful,” says Chaffo.

“By using technology, products and solutions, we create ways to make other things possible, that’s where we think we have the greatest potential for impact. And that represents our focus on innovation and sustainability to actively remove carbon emissions from our broader supply chain solutions, not just from our solutions but from our customers’ supply chains as well. We also have a very strong focus on reducing food waste.”

The changes produced by the COVID-19 pandemic, which have promoted the growth of e-commerce operations, with home delivery or in-store collection of purchases made online, are other opportunities in Avery Dennison Smartrac’s sustainability vision, as far as to RFID solutions. “Delivery is expected to increase to 30% by 2030. And online retail is driving this on a massive scale, with 36% of that growth,” says Chaffo. “As an omnichannel enabler, RFID helps reduce environmental impacts. Our solutions are critical to enabling omnichannel and are helping to mitigate some of the increased landfill of items being returned, as well as issues with products that are often being shipped less efficiently.”

Avery Dennison: Regenerative Retail Economy

The food supply chain is the single largest contributor to global greenhouse gas emissions at 26%. “Compare that to other industries like automotive and apparel, which hit 4.2%,” says Chaffo. “A 2021 report released by the World Wildlife Fund, says that food waste is responsible for 10% of greenhouse gas emissions worldwide. This is waste. And that’s a big number. Think about it, especially considering that the number of people suffering from food insecurity has increased during the pandemic”, he attests.

“We thought about how to make eating more people safer and it turned out that there is a net benefit of 73 billion annually if food waste is addressed,” announces Chaffo, saying there is a very real ROI. “We’re starting to see a lot of investment happening to address food waste and really use technology to address it.”

RFID is at the heart of sustainability solutions. “When we think about what our RFID has done, historically, we’ve measured it in terms of inventory accuracy, but what we haven’t said is that we’re also reducing waste. If we manage to have an increase in sales, say 1.5% to 5%, we reduce inventories by 2% to 13%. Obviously, we’re on board with that, reducing waste in our supply chain.”

Estefania Bernal

“If you are able to provide better visibility into food exploration, things like cold chain management, managing product recalls, but also packaging, then we will have a strategic focus to enable reusable packaging, using RFID and other technologies to enable the circularity of packaging”.

Estefania Bernal, executive at Avery Dennison Smartrac, in Latin America, spoke about the company’s success story Algramo, from Chile. The project consists of reusing packaging, making them smart with RFID tags “This Avery Dennison tag, when connected, allows it to enter certain refill programs or mobile supermarket dispensers or use it in other spaces, such as cars or automobiles, that sell branded products. The user can do two things: reuse the packaging, obviously this helps to mitigate the environmental and economic impact; and choose what really should be used or what you want to use – that is, you don’t waste it, because you only buy what you need to use”.

Brands of cleaning products and products for pets, among others, also use this solution. “Something that I found very cool is that the user of these programs participated in a loyalty program, with a bonus for the next purchase of the same product”, reported the executive of Avery Dennison. “For me, sustainability is a word that involves collaboration. In other words, success would not have been possible without technology, without the collaboration of brands. And also without this engagement and consumer participation”, concluded Estefania.