Not content with being a leader in banknote substrates, features and print, Crane NXT is certainly gunning for the brand protection market, having acquired three companies in this area since the start of the year – OpSec, De La Rue’s authentication business and the smart packaging assets of TruTag. Presumably, it is hoping to secure the sort of success in this field as it has in currency.
But a word of caution for any company looking to extend from banknotes into brand protection – it’s not for the faint hearted.
Brand protection as we know it today became a ‘thing’ in the early 1990s, with Microsoft and Glaxo SmithKline Beecham among the early adopters of advanced (by the standards of the day) labels to protect their products against the growing problem of counterfeiting.
By the late 1990s / early 2000s a number of high security printers and suppliers, sensing an opportunity for diversification and seeking to leverage their credentials in banknotes, piled into the market. Disappointed that their expertise and experience didn’t secure them easy entry, several just as quickly piled out again.
One of the issues then, and now, is the assumption that brand protection is a ‘market’. In reality, it is an umbrella term for just about every product with brand value, all with differing challenges regarding the impact of illicit trade on their assets. There is, in other words, no such market.
Related to the non-homogeneous nature of brand protection is a fragmented supplier landscape. A recent analysis of the number of players of both components and complete solutions put this at around 600, which is probably on the conservative side. By contrast, the number of suppliers for banknotes (in terms of substrates, features, inks and print) is a quarter of this.
Then there is the nature of the protection itself. For brands, it’s not just the product that needs protection, it’s the increasingly complex, convoluted, extended and porous supply chains.
And the need to protect the brand from various forms of illicit trade – not just counterfeiting, but over-production, simulation, diversion, dilution, tampering etc.
The security device – the label, film, packaging, blister pack, seal – is only a small part of the overall solution, central to which is data, coding, track and trace.
And there is the culture too. In currency, security is all. For brand owners, it’s a tiresome necessity. As a result, their willingness to pay for premium protection is limited. There is perhaps one exception – which is where products and documents intersect, namely tax stamps or labels for excisable products (primarily tobacco and alcohol). But that’s about it.
Those aforementioned companies that jumped in then jumped out again found this out all too quickly.
But there are notable examples of companies in our sector that have made a success of it – generally in specific niche markets. De La Rue was early to market, and stayed the course, with a number of prestigious contracts including Microsoft and several revenue authorities, based on its core holographic labels and track and trace programmes.
SICPA is the undisputed market leader in tax stamps, having recognised early on that production monitoring, track and trace is fundamental to the success of excise recovery programmes, and developed solutions accordingly, even if its security inks still lie at the heart of these solutions.
It has also secured a leading position in fuel marking programmes, as has Authentix, which also has a number of tax stamp programmes under its belt as well.
Crane has made a smart move, both literally and figuratively, in enhancing its portfolio of PROFOUND micro-optics security labels with the coding, tracking and digital management assets of its acquisitions. Not to mention some of the prestigious contracts.
For any company in the banknote sector to succeed in brand protection, the prestige of their name only goes so far, if at all. It’s all about the technology solution.
