by Dr. William Llewellyn, Vice President, AWA Alexander Watson Associates BV
From stadium cups to bottles for laundry care products, from yogurt cups to paint pails, from ice cream tubs to boxes for medical sharps, the benchmark and quality of container decoration has been improved to the highest standard by the use of in-mold label and decoration technologies.
The Smallest Labeling Technology
In-mold labeling (IML) is the smallest of the four major groups of labeling formats, accounting for around 2 percent of the total global label volume of 39,500 million square meters (61,250 million msi) in 2006.
Global Label Markets by Labeling Technology, 2006
Source: AWA Alexander Watson Associates
The total global demand in 2006 for in-mold labels is estimated by AWA Alexander Watson Associates at 780 to 800 million square meters (1,240 million msi). Europe is the leading regional consumer with an estimated 350 to 370 million square meters (570 million msi), followed by North America with an estimated 200 to 220 million square meters (340 million msi), representing approximately 25 to 27 percent of total global consumption of IML systems.
However, the two leading regions, North America and Europe, are very different in the composition of the in-mold label products used, with Europe heavily orientated toward an injection molded label (IM-IML) product at 90 percent of the demand, and the North American market focused on an extrusion blow molded label (EB-IML) format representing around 90 percent of demand. It is the opportunity to develop in-mold labels for injection-molded containers along the lines of the European model that is supporting the higher-than-average growth rates for this label format in North America. As a product decoration technology, IML enjoys one of the highest growth rates of any labeling format, driven in part by the increasing demand for high-quality decorated injection molded containers in the North American marketplace.
Regional Demand for IML Technologies, 2006
Source: AWA Alexander Watson Associates
The Advantages of In-mold
In-mold labels offer a range of technical and commercial advantages over other label formats:
- Security of the decorated product is enhanced as the label is an integral part of the container wall and is “applied” during the molding of the container.
- Durability of the label is enhanced by the use of plastic films, typically OPP, which are compatible with the extrusion polymers used for the container.
- Resistance to product and environment is provided by the materials used for the labels and also by the labels’ firm incorporation into the container walls so that they cannot be easily removed, distorted by exposure to product leakage, or exposure to extreme environmental conditions.
- In-mold provides a cost-effective product decoration technique for long runs.
- Photo-quality decoration is provided, in comparison to direct printed containers.
EB-IML vs. IM-IML
In looking more closely at the North American market for IML materials, one can see a two-tier market based on EB-IML and IM-IML technologies. The established EB-IML market was estimated at US $140 million of sales value in 2006, equivalent to around 190 million square meters (295 billion msi) and growing at a rate of 3 to 5 percent per annum.
By comparison, the IM-IML market is not established, and at an estimated value of US $15 million, equivalent to around 30 million square meters (140 million msi), is growing at a rate of 20 to 25 percent per annum. However, the majority of this market (70 percent) is provisioned by imports of finished labels from Europe. It is estimated that the current position of the North American IM-IML market is some 15 years behind that in Europe in terms of overall development, but with a volume potential of some three to four times, given the differing approaches to packaging and product presentation. The key questions facing the North American market are as follows:
- Is the IM-IML market now at the tipping point?
- From which sector will a major brand owner/end user emerge who will catalyze and energize the market to provide the key driver for growth?
At the recent IMLCON 07 Conference in Scottsdale, Ariz., organized by AWA Conferences & Events, speakers and delegates addressed these issues through a series of presentations and workshops. The consensus opinion was that the EB-IML market is a mature entity in North America, but that the IM-IML sector is poised for a breakthrough in 2008/2009. Because demand increasingly is being satisfied by North American sourced films and by domestic conversion by printers and molders, the dependency on imports from the leading European converters is being reduced. This breakthrough will be realized as domestic producers demonstrate their capabilities and establish confidence in end users in both the concept of IM-IML technologies and quality local sources.
The IML format faces challenges from other labeling and product decoration technologies. Sleeve labels are a major source of competition, offering 360 degree, high-quality graphics, as are pressure-sensitive labels in the key areas of household chemicals such as under-the-sink and laundry care products. However, IML technologies offer high levels of label security and durability under harsh environmental regimes, with excellent product and chemical resistance and minimal deformation or loss of image, since the label is an integrated component of the container wall. Their use in injection molded tubs for ice creams, butters, margarines, and other foods provides an excellent example of the enhanced levels of product presentation and promotion which can be achieved, compared to the extrusion-coated boards currently used by many leading brands.
New Market Study
AWA Alexander Watson Associates will present a comprehensive analysis of the global market for IML technologies in an upcoming study, AWA Global IML Market & Technology Review 2008, to be published early in 2008. It will include details on the global and regional markets for IML technologies with an assessment of market trends, materials, printing and finishing technologies, and new developments. The study complements the IMLCON series of conferences to be held in Amsterdam, The Netherlands in June 2008, and in Phoenix, Ariz. in October 2008.
For further details of the AWA study and conference program, visit www.awa-bv.com.