While many parameters exist for checking the pulse of the industry, let's take a holistic look at developments falling within the parameters of university research, supplier innovation, supplier acquisitions, solutions actually used by brand owners, government regulations, and new market growth drivers.
On the research front, universities continued to focus on material-based security features in 2023, including optical meta-surfaces, physically unclonable functions (PUFs), features embedded into the product itself, and edible codes.
Regarding optical technologies, a collaborative research team from universities in Singapore and Shanghai, China, fabricated a 3D-printed nano-optical security label providing 33 to the power of 100 possible combinations for security in optical anti-counterfeiting. And a team of chemists from the University of California, Riverside developed new methods to create chiral structures.
Optical PUFs have attracted growing attention as anti-counterfeiting tools, and a group of researchers at the University of Hong Kong used diamond-based PUFs to create anti-counterfeiting labels. Furthermore, researchers from MIT developed a tiny, biodegradable tag for direct application to seeds, providing a unique, randomly created code that cannot be duplicated.
Professor of Polymer Chemistry Markus Gallei and his doctoral student Lukas Siegwardt, from Saarland University, Germany, created 'perfect polymer particles' (ie. particles of identical size and shape) with a hard centre and soft shell for building 3D-printed structurally coloured objects – something that had not been possible before.
A research team led by Prof Ji Shulin from the Hefei Institutes of Physical Science of the Chinese Academy of Sciences developed a transparent heating film made of silver nanowires. Applying a low voltage across the nanowires caused rapid temperature changes which, in turn, changed the colour of thermochromic inks. Multiple and overlapping high-resolution thermochromic patterns could be printed onto a substrate so that various image elements could be revealed, and change colour, at different nanowire temperatures.
All of these developments opened up applications in anti-counterfeit technology, sensing, and optoelectronics.
In 2023, security solution providers continued developing optical features and solutions, often combined with covert security, tamper-evidence, unique identifiers, and associated data management systems. This re-confirmed the position and importance of overt security features. At the same time, suppliers embraced physical/digital ('phygital') solutions that drew them into the realm of near-field communication (NFC), blockchain, and non-fungible tokens (NFTs).
While established players like Crane, Oberthur, De La Rue, and IN Groupe offered their micro-optic solutions, a new name in nanotech authentication, Distinkt, launched a new optical ink using phase-change materials to create unique visual and covert effects.
Meanwhile, Meta launched QUANTUM™ stripe, which, according to the company, was the world’s first fully nano-optic banknote security product, ushering in a new era of security for the banknote industry. And Eluceda developed a rapid, portable solution to identify counterfeit human growth hormones, based on its E-Sens™ device for detecting and analysing the hormones’ unique electrochemical ‘fingerprint’.
On the NFC front, TOPPAN showcased its new NFC tag for contactless detection of the volume of liquid inside a container, targeting the cosmetics, medical, pharmaceutical, and liquor industries. The tag used NXP® Semiconductors’ NTAG® 22x DNA StatusDetect, an NFC chip with capacitance measurement capability. With this solution, TOPPAN made it possible for liquid to be detected with a smartphone.
While many solution providers continued their acquisition drive, IN Groupe led the race in 2023. The group operates four reference brands: IN Groupe for physical and digital identity solutions for governments and administrations, Nexus for secure identity solutions for professionals and physical objects, SPS for electronic components and solutions for banking and ID, and SURYS for optical and holographic components for banknotes and ID. After acquiring SURYS (2019) and Nexus (2020), IN Groupe went on to acquire Portals’ secure component business, as well as Gleitsmann Security Inks, and Nexi’s eID business, all in 2023.
Also in 2023, OpSec Group went public, as well as acquiring Zacco and Global Trim, and securing a strategic investment from SAKATA INX, a manufacturer of printing inks. And Crane NXT, which produces micro-optics technology for securing physical products, separated from Crane Company, to become an independent, publicly traded company.
In the same year, TOPPAN changed its name for the first time since its founding in 1900. TOPPAN Inc became TOPPAN Holdings Inc, and transitioned to a holding company structure. TOPPAN also completed the acquisition of Skymark and acquired Colombian card manufacturer Hogier Gartner & Cia.
Meanwhile, Authentix, which has been active on the acquisition trail over the last few years, added a few more to its tally (2019 – Security Print Solutions, 2020 – Traceless Authentication Group, 2021 – Strategic IP Information, 2023 – Royal Joh Enschede).
The other buyouts were Giesecke+Devrient acquiring German IoT tracking specialist MECOMO, Luminescence Sun Chemical Security acquiring InData Systems, Zeiser acquiring Inspectron, HID acquiring Evolis, Oberthur buying stakes in Rolling Optics, and VerifyMe acquiring assets of a digital identity brand protection company. By the end of the year, Spectra Systems had announced the acquisition of Cartor Security Printers.
The formation of partnerships between suppliers, in 2023, continued to generate new classes of security features and solutions.
For example, De La Rue partnered with C3i Europe, the intelligence-driven brand protection enforcement company; Royal Canadian Mint announced a collaboration with aXedras, a digital solutions firm working with precious metal supply chains; Merck collaborated with p-Chip Corp for advancing a platform for customers to create digital twins of single physical products; and Oumolat Security Printing entered into a strategic alliance with SICPA to print enhanced tax stamps and track activities through the integration of advanced technologies.
It was also as a result of a partnership that the copy-protected, direct-print ValiGate® QR code from SCRIBOS (a KURZ company) could be used as a plug-in for HP digital presses worldwide. ValiGate uses the entire QR code to embed a patented copy-protection pattern, which SCRIBOS developed from its knowledge of holographic security features.
Other HP partners included VerifyMe, with its VerifyInk™ security ink taggants for HP Indigo's 6000 series of digital presses, and Jura, with its security design software, variable security features for digital printing, and smartphone authentication expertise.
As far as actual applications by brand owners were concerned, while some brands continued to apply material-based security features in the form of labels, we heard a lot more about digital applications in the area of 2D barcodes, microchips, NFC, blockchain and NFTs, especially with regard to collectible items and luxury goods.
For example, Apple iPhone introduced a UV-activated QR code, invisible in normal light, on its iPhone 15 series; Parmigiano Reggiano embedded microchips into the rind of its parmesan cheese wheels; and NFC tags were increasingly being used on sneakers and other sports and luxury apparel, with Dior, Adidas, Fila, Puma and Hugo Boss adopting NFC.
We also heard a lot about how authentication was being carried out on pre-owned consumer goods such as sneakers by e-commerce sites like eBay. Rather than using security features for authentication, the emphasis was on checking a multitude of specific details inherent to the item itself, or even just checking photos of those particular details.
This practice of not using security features to authenticate something tied in with a finding by the International Trademark Association that only 40% of brand owners actually used authentication features as part of their anti-counterfeiting strategy.
On the other hand, a trend observed with big e-sellers was their entry into authentication. For example, eBay acquired Certilogo, a provider of digital product IDs, and Amazon reported a 40% growth in brands adopting its Transparency product serialisation service. The service involves registered brand owners applying unique 2D codes, generated by Amazon, to every single unit of a selected product. The code is then verified for authenticity by Amazon before the product is shipped to the customer.
In 2023, several government-led initiatives around anti-counterfeiting and supply chain security had the potential to accelerate the move towards universal solutions for authentication and traceability on different products. Take pharmaceutical products, for instance, where UAE, India, and Kyrgyzstan launched new regulatory drug tracking systems, although the US delayed its drug tracking programme.
Sustainability projects like the EU Digital Product Passport and MaDiTrace mineral traceability project were also viewed as opportunities for security solution providers to extend their brand protection technologies into the circular economy.
For example, France became the first country to implement the Digimarc Recycle solution nationwide. The solution links covert digital watermarks (used to identify plastic packaging to any desired level of granularity) with a cloud-based repository of product attributes (such as brand, SKU, product variant, packaging composition, food/non-food use), helping to overcome the limitations of optical sorting technologies.
We must not, however, forget that the new growth drivers outlined in this review – which are essentially digital in nature – could also present a threat to the authentication industry. They could, for instance, drive brand owners and other stakeholders even further away from using physical security features for authentication, laying the foundation for new players, with more of an IT background, to enter – and, potentially take over – the industry.
So, we must remain vigilant and receptive to change, while continuing to uphold the values of utmost trust and security that made our industry great.
