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Avery Dennison to Buy Smartrac's Transponder Business

The acquisition will give the California-based adhesive company a greater presence in the RFID industry, by providing tags and inlays for retail, industrial and other markets in the UHF, HF and LF frequencies.
By Claire Swedberg

Although growth in RFID has been fueled, in large part, by the tagging of apparel, Melo says, the market is broadening even within retail applications. "If I look within retail," he states, "I see big growth in the food space, especially in elements around sustainability." By tracking tagged food items, retailers and food companies can reduce the amount of waste, thanks to the improved visibility in the supply chain and on store shelves afforded by using RFID tags to access and store data regarding every item's history.

Avery Dennison has also developed a high-performance on-metal tag for use on metallic food packaging. However, the broader platform of products and customers will enable Avery to provide on-metal solutions to other markets as well. The company released its microwave-safe UHF RFID tags in 2018, for use with its WaveSafe and Freshmarx solutions for managing food throughout the supply chain (see Avery Dennison Provides RFID System for Food Management). "That's one of our core strategies," Melo says, "and an area we've been developing in."

Under normal conditions, Melo explains, the inlays are not expected to turn up in a microwave, though the tags have been tested and deemed safe if that were to happen, thereby assuring brands that the tags will not create safety risks. "We have a number of pilots underway," though he is unable to name the companies piloting the new tags.

Among its own portfolio, Smartrac provides labels for the aerospace industry, as well as for maintenance, repair and overhaul companies (MROs), which are applied to metallic parts. In addition, the company offers sensors that could enable the tracking of conditions around a tagged item, such as identifying a leak near a sealed part.

Avery Dennison's expanded portfolio means new areas for RFID-based solutions may be found, Melo predicts, using UHF, HF, NFC or LF. "These are areas where we have not been very active previously," he notes. Avery's goal is to increase its strength and grow its business by helping customers improve their supply chain or employ RFID for other use cases that will become possible with Avery's acquisition of Smartrac's products.

Approximately two and a half years ago, Avery Dennison established a Converter Leverage Team representing its materials division, which works directly with label converters. With the Smartrac acquisition, Avery intends to expand that effort to more actively partner with RFID label converters as well. "I fundamentally think the capabilities of both entities will provide another platform for research and development of new solutions," Melo states, while increasing Avery's competitiveness regarding its existing solutions.

Uhl says the acquisition will enable both companies to offer a broader technology platform, expanded product lines and added manufacturing capacity, which he claims will create "a broad, dynamic and very attractive RFID portfolio serving a wide variety of today's and tomorrow's customer and market needs."

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