Label printer

On the face of it, the American label industry is showing positive signs with a small but respectable growth predicted at 2.5 percent for 2012-2013. While the emerging markets such as China, India and southeast Asia consistently post high estimates of around 10 percent for annual growth, these statistics are based on growing disposable incomes, increased supply and demand, and immature market conditions. Overall, the Americas market (including Canada and Latin America) is well placed and now accounts for more than 40 percent of global consumption. The United States is the largest single label market with 27 percent of total global consumption. 

While it cannot be denied that this is a mature market and one dominated by some of the industry's multinational players, the label sector in North America still has a long way to go in its own right, especially in its embrace of fast-developing technologies and more sustainable solutions.

Growth opportunities
Surveying North American converters earlier this year, we uncovered an interesting insight into the current state of the market and where the challenges lie for converters in growing their businesses while meeting brand owners' exacting expectations. As to be expected, it revealed that downward pressures on prices and rising costs are the main barriers facing printers, with just under 50 percent of respondents citing them as being the two major obstacles in growing their business. Finding new customers and direct competition were prioritized as the next key threats, but interestingly, obtaining finance for investment was viewed as of little concern, with less than 10 percent of participants citing it as an issue. Indeed, 58 percent of converters said they were looking to invest in a new press or other capital equipment during the next 12 to 24 months.

The survey highlighted that converters are still heavily reliant on the food/supermarket industry for business, with slightly less than 70 percent of respondents producing labels for end-users in this segment. This was followed by consumer and industrial products at more than 50 percent and healthcare and pharmaceutical label production at just less than 50 percent. While more than 60 percent of converters were producing tickets and tags and slightly less processing flexible packaging orders, 100 percent are supplying customers with self-adhesive labels, followed by wraparound and sleeve labels, respectively. 

Label rolls

The main printing processes appear to offer converters the biggest and most lucrative growth area, particularly where product segmentation is high—as it is in the food and beverage and personal care industries. Just more than 50 percent of surveyed printers said they are using digital technologies, with 95 percent of respondents favoring flexo and 65 percent using UV flexo. 

In the ever-changing world of labels, where run lengths have decreased, label variations have increased and the demand for label personalization grows, the challenge for conventional press users is to increase commercial viability by reducing setup and changeover times without compromising durability or print quality. As 69 percent of those surveyed agreed, digital printing technology for labels is the biggest growth opportunity for their businesses, especially for short runs. And, as innovation is key to business growth, the argument for digital is compelling.

Introduced in the 1990s, digital printing is still continuing to grow in popularity throughout the industry as converters realize the full potential the technology offers them and brand owners alike, especially as the quality and speed of digital presses continues to improve. Already into third generations of toner-based digital press technology solutions, it is the next generations of digital inkjet label presses that have for long been regarded as offering the ultimate potential in higher speed, quality, digital printing for the future.

Capable of being used in standalone digital press formats or as add-on spot color and personalization units on conventional presses, inkjet is perhaps the simplest and potentially fastest digital printing technology available today and maybe the most flexible for today's fast-changing marketplace conditions. Already well-used for the highest quality of color proofing, the target is to print proof-quality inkjet labels at conventional press running speeds on a digital press line, but with all the flexibility, job batching, changeover, marketing, variation and personalization options brand owners require.

A digital capability will become an important piece of capital within a converter's overall business portfolio. By leveraging the benefits of a using a multi-platform printing model, it will substantially help converters achieve longer term success. Though digital printing suits the modern supply chain in that it simplifies complexity and reduces costs, it is vital for converters to continue to work with brand owners to reinforce the message that digital printing can add value to their business.

In the food and personal care manufacturing sectors, having a conventional press and no digital offering can be a make-or-break proposition. Where multiple SKUs are a necessity for the brand owner, digital can be a significant tool for the converter in successful food or cosmetic product label printing. Its impact on the production line is minimal except for file management. Yet the results for the brand owner are immense because the technology enables them to realize mass variation with specific retailer personalization and even seasonal or regional campaigns at reduced costs.

Challenges
While the end-user has been instrumental in pushing the industry forward in producing higher quality labels, the brand owner has been impacting on the supply chain with environmental concerns. No longer a question of if, but when, the wider label industry needs to adopt more stringent environmental management systems if they are to answer to increasing pressures from external influences such as retailers, government legislation and consumer demand.

Sustainability has come a long way in the past few years, with many initiatives being introduced across the supply chain from substrate manufacturer right through to converter. As will be widely exhibited at the forthcoming Labelexpo Americas, Avery Dennison and UPM Raflatac have pioneered specially formulated adhesive materials that do not gum up recycling streams, while many water-based and eco inks have been introduced to the market by category leaders such as Sun Chemical and Flint Group. Armor has also been recognized for its sustainable 100 percent solvent-free ribbon by being the first global thermal transfer ribbon manufacturer to be awarded LIFE certification by the TLMI. Meanwhile converter Spear Inc. has connected its customers with recycling groups that can collect expended release liner after application. Currently 75 percent of its customers are participating in the PET liner collection scheme, including Heineken, and so far it has salvaged 7.8 million pounds of P-S liner going to landfill.

Our sample of converters echoed the need for printers to adopt better environmental management schemes with approximately 60 percent of them saying that sustainability was of importance to their business. Sixty percent of respondents stated that lean manufacturing/waste reduction and it being the right thing to do were more important factors in relation to their businesses than the ability to realize cost savings from being more environmentally conscious.

Asked what the industry needs to do to help stimulate future growth and investment, 42 percent of the converters who participated in the survey felt that better end-user market information was of paramount importance. With successful partnerships central to the future of the label industry, it is essential that the supply chain work together as one from label designer through to converter and retailer to ensure that the North American label industry continues to maximize every opportunity and avenue for growth.

Mike Fairley

Armor, +33 2 40 38 40 00. www.armor-tt.com
Avery Dennison, 626-304-2000. www.averydennison.com
Flint Group, 734-781-4600. www.flintgrp.com
Labelexpo Americas, 262-782-1900. www.labelexpo-americas.com
Spear Inc., 800-627-7327. www.spearinc.com
Sun Chemical, 708-562-0550. www.sunchemical.com
UPM Raflatac, 800-452-4127. www.upmraflatac.com

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