Counterfeiting is a devastating problem, and one that will never be fully eradicated. But, just how much of an impact is it actually having on the marketplace? Check out these startling statistics estimating the value of counterfeit goods worldwide, which was presented to HP Indigo press owners during the February 2007 Dscoop Digital Solutions Cooperative (www.dscoop.org) at Saddlebrook Resort in Tampa, Fla.:
• Pharmaceuticals—$49B
• Automotive and aircraft parts—$12B
• IT and software—$10.9B
• Music and film—$5B
• Apparel—$2.1B
• Cosmetics and toiletries—7 percent to 10 percent
of the worldwide market
Overall, counterfeiting has put a $250 billion dent in the United States’ economy, and has resulted in the loss of hundreds of thousands of jobs. For those fortunate few thus far unscathed by the growing problem, be warned that if competitors are having problems with counterfeiting, chances are excellent you will be targeted next. And, the damage to a company is not limited to lost revenue, but diminished consumer confidence and even liability issues.
Most brand owners are left scrambling for cost-effective solutions to secure and validate their products. Industry experts recommend leveraging many different deterrents, such as variable security data printing on packaging and labeling and tamper-evident substrates and adhesives.
At Labels West, Woodinville, Wash., director of sales and marketing Lance Wilson said the company continues to experience a growing demand for security label products. “We have seen more interest in combining variable data with special security, destructible materials and the use of black light-invisible inks,” he reported. “We have also seen activity with the need for micro-text on labels, which would be run on our HP Indigo digital label press.” Markets driving the majority of the demand for security labeling at Labels West are the pharmaceutical, software, personal care and wine industries. “With some projects, continued Wilson, “it’s a situation of proving authenticity [as opposed to] showing that something was tampered with.”
Supplying products with value-added security features requires special production capabilities, and Labels West recently added inline variable data printing abilities to its flexo equipment, and also updated the software for the company’s digital label printing process. “The latest HP Indigo digital label press [the 4050] offers a very sophisticated approach to security labels. Every label can have a unique color, different number, invisible ink and micro-text,” said Wilson.
In addition, Wilson explained the company’s suppliers are developing more sophisticated, tamper-evident materials and tamper-evident/aggressive adhesives.
For example, labels produced from destructible vinyl prevent someone from being able to remove the label from the surface it was applied to. Once the label is applied, it simply cannot be removed in one piece. However, the nature of the substrate makes it very difficult to work with, and requires manufacturing expertise which can be reflected in pricing. “Dealing with some of the unique security materials can be very challenging for converters not familiar with the process,” observed Wilson. “By the nature of some tamper-evident materials being extremely ‘fracturable’ it takes some [research and development] to [be able to produce] a good security label product.”
Of course, such specialized, value-added products do allow for excellent profit margins, and successful distributors are those able to get customers to see the products as security devices rather than labels.
Scott Steiner, president of All Barcode Systems, Garden Grove, Calif.—a manufacturer of self-adhesive labels and tags and a distributor of thermal transfer ribbons for most printers—pointed out that retailers’ product diversion issues are generating demand for security labeling at his company, while schools and government/public offices are increasingly requesting secure ID cards.
“We have recently added different security options to our four main product lines,” he said. “Firefly is a thermal transfer ribbon that fluoresces under a UV light, and TrackSure is an invisible UV thermal transfer ribbon for printing ... text or numbers, and it, too, can only be seen with a UV light source. TrackSure also will print a UV barcode that can only be decoded using a proprietary barcode scanner.
Steiner went on to say All Barcode Systems has the ability to print UV numbers or barcodes on its Mark Andy Flexographic label/tag press. The UV printing can be used on almost any label/tag substrate, including papers and films. “The hidden number or image can be printed along with four-color labels and tags,” he explained. “This allows the [end-]user to have an added, unknown security benefit. Going forward we anticipate a number of uses with both our retail and distribution customers.”
In addition, the company has added a variable data unit to its press to service the growing business for consecutive barcodes and numbering. “Our distributors know their customer base. Many specialize in certain vertical markets. The hidden UV feature can be added to a name badge for a hospital or business that can be scanned at the security desk to validate its authenticity,” said Steiner. “It most certainly can be used by distributor[s] of retail products to ensure their products are authentic and not knock-offs. We have a potential customer who wants to add a hidden number to products [the company] manufacture[s] to identify the employee and shift [when] a product was manufactured, and pull random products for [quality control] purposes. The imagination of the distributor is the only limitation [when it comes to] which customers and products these features can [benefit].”
Said Wilson, “Distributors must really dig to understand the challenges their customers may have with fraud and theft. Distributors tend to be experts at developing systems, and security labels are all about systems and programs. With technology today, the ability to create a unique security label is limitless.”
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- Companies:
- Labels West