Covert operation: how to beat the counterfeiters

Brands are under attack. We’re not talking about the war on sugar or range rationalisations. We’re talking about counterfeiting.

Once an issue predominantly confined to luxury and premium brands, it is becoming more widespread. “Counterfeiters will target any product where they perceive they can profit easily,” says Rupert Taylor, global category manager – household, food & drink at Essentra, an international supplier of packaging products. “This extends to virtually every industry from alcoholic beverages to skincare, beauty and cosmetics.”

Brands’ reputations are put at risk as a result but they’re not the only ones to suffer – governments also lose out. As Taylor points out, the UK’s Institute of Economic Affairs estimates that counterfeit spirits alone result in a £1.2bn annual tax loss to the Exchequer.

But the highest risk comes from safety issues to consumers, says Andy Hobsbawm, founder and chief marketing officer at EVRYTHNG, a smart products platform that connects products to the web and manages real time data. “It’s one thing to have a fake Gucci bag, it’s another if your medicine is phoney or your food or drink product contains harmful substances,” he says.

So, what can brands do to keep their products and consumers safe? And how much will this cost?

“When considering the cost of brand protection, there are really two questions brand owners must ask themselves: How much do they value their brand and what could they lose if it were compromised?” says Taylor. “These questions will help brand owners define the amount they need to spend on such measures. Authentication and security should not be viewed as an additional cost but rather an investment that will result in the protection of their consumers and the brand.”

He believes a multi-layered approach is best, with solutions varying from overt (instant authentication through visual inspection), covert (which requires specialist equipment like UV-invisible ink) and forensic (molecular markers and biological trackers identifiable using lab equipment) solutions.

EVRYTHNG’s solutions are typically made of three parts: on-pack identifiers (QR codes, NFC tags or smart printed electronics labels); smartphone apps (for brand inspectors and/or consumers to identify and interact with physical product); and cloud software intelligence (to manage and analyse real-time data).

Brands can use consumers’ interaction to their advantage as these products need to be scanned to ‘come alive’, which has potential drawbacks depending on the size of brand protection teams. Now though, says Hobsbawm, brands can enlist consumers to help.

“As they interact with a product’s physical packaging to access customised, engaging marketing content, they simulate thousands of product authenticity checks,” he explains. “Suddenly this shifts the odds back towards the manufacturers. Armed with masses amount of data insight, they can take targeted action to tackle these security breaches at source.”

Prices vary according to the type of solution, says Hobsbawm, with a typical price ranging from $3 (£1.96) to $150 per thousand depending on the level of sophistication required. “Prices are falling dramatically,” he adds. “Within one to two years the cost of even the most sophisticated on-pack sensor-based technology will make them viable for even low-cost goods.”