Article provided courtesy of AWA Alexander Watson Associates
The changing nature of product packaging has brought a whole new world of meaning to the concept of labeling. Labels today must not only decorate and promote the contents of the package but also perform a long list of additional roles. These include responding to the legislative demands for ever-increasing amounts of factual contents information and adding product authentication and brand security devices, such as RFID tags. There is also the fast-growing desire of brand owners to communicate directly with their customers via packaging using “smart” tools, such as QR codes. Then, of course, there is the matter of the product packaging itself, which today often performs the additional role of the label good examples are pouches and other flexible packaging. To add to this long list, there is the option of printing directly onto a rigid product container itself, thereby eliminating altogether the need for a physical label.
Global market update
The complex and ever-changing world of labeling and product decoration is a core market studied by international market research company AWA Alexander Watson Associates, and it is the subject of an annual global update that keeps industry participants – at all levels of the supply chain – abreast of the latest market data. The recently-published 2018 AWA Labeling & Product Decoration Annual Review covers not only the world’s geographical marketplaces, but also all the different technologies and their associated material components – from substrates and price trends through converting and application technologies – and, of course, documenting the key topics of current growth by technology and forecasts for the future growth of each. The following is a summary of AWA’s findings.
Pressure-sensitive labels, which in 2017 claimed 40 percent of the total global label market and are still the major overall growth driver, were early adopters of plastic film substrates – particularly for the much-used “no label” look on see-through glass and plastic packaging substrates. Plastic films are also important performers as label release liner base material, where their physical properties help deliver print, converting and application accuracy. Although today, concerns remain at the high volumes of spent release liner generated, despite a variety of initiatives being in place to improve recycling rates. BOPP film is the leading choice of film facestock for pressure-sensitive labels, with PE and PET also favored.
The mature glue-applied label market, still representing 35 percent of all labeling, also uses film substrates – mostly BOPP, driven by its use in conjunction with hot melt adhesives for wraparound glue-applied labels. PVC and foamed OPS films are also used in such applications.
Today the traditional label technologies are experiencing serious competition from the relatively young sleeve label formats, particularly in the food and beverage markets. Their growth is promoted by the proliferation of -on the go – single-portion packaging, as well as snack foods and drinks, delivered in easy-to-handle plastic containers or metal cans, for which sleeve labeling technologies provide a convenient and clever answer. In 2017, the sleeving technologies (heat shrink TD; stretch sleeve; RFS/ROSO™ MD) accounted for around 18 percent of global label volumes, and the technologies employ 100 percent film label substrates.
Heat shrink TD sleeve volumes are dominant, growing fastest in most geographical markets and show a healthy global growth rate of 5.8 percent. In AWAs industry supply chain survey, more than 30 percent of respondents said they consider shrink sleeves to offer the greatest growth potential of all the label technologies, with pressure-sensitive and in-mold labels in second and third place. The healthy growth levels in shrink sleeves are driven by the North American, European and Asian markets. PET, PVC and OPS/PET-G hybrids are the main film choices for heat-shrink TD sleeves.
RFS MD shrink-sleeve label formats remain an emerging technology, showing high growth rates – albeit from a low volume base. Growth is frustrated by the higher costs of application technology; but the development of mid-cost-range equipment and continued, although slowing, investment in higher-volume equipment is driving growth to some degree.
In-mold labeling is another technology that uses film substrates in more than 90 percent of applications – and this aspect of a mainstream packaging medium is growing apace now, at 4.2 percent in 2017, with North and South America particularly lively markets.
An area of product identification of growing interest is in the direct digital printing of plastic, glass and metal containers. Technology and equipment developments in this arena are showing signs of growing commercialization, with investment particularly noticeable among European brewers and manufacturers of health and personal care products. At a time when raw material and energy costs are escalating, and the supply chain and end users are trying to maintain profitability, direct-printed formats can, of course, offer substantial cost savings, as well as cost-effective marketing opportunities in terms of product personalization and limited editioning.
Eliminating the need for a separate label altogether, this solution also helps the sustainability agenda, which is today a major focus in all aspects of packaging that involve plastics’ recyclability and actual physical recycling.
As the AWA study shows, the world is not a homogenous marketplace, and there are major regional geographical differences, many of which are determined by local political and economic issues. Label industry growth is healthy today in Europe, North America and Asia, thanks to the recovering Chinese market and positive developments in India and the South East Asian countries.
Following recent years’ static/negative growth in South America, there are also signs of regional recovery, and this is a market where more than 70 percent of all labeling employs films, and not papers. Africa and the Middle East are a small but growing market where glue-applied labels remain the mainstay technology today, but where both pressure-sensitive labels at 4.1 percent, and in-mold labeling grew faster last year, at 4.1 percent and 4.2 percent, respectively.
Plastics continue to be real game-changers in the field of packaging, thanks to both their physical abilities and the broad spectrum of decorative possibilities they bring. Demand for lighter-weight/higher-yield materials is evident across all label formats and material types and across the value chain. This is leading to the continuing development of newer generations of films.
The extended supply chain in the packaging industry embraces raw material suppliers, substrate suppliers, converters, application machinery and, of course, end users/brand owners. The AWA Labeling & Product Decoration Annual Review is a valuable monitor of the trends, innovations and challenges across this important global manufacturing platform as a major user of plastic films.
AWA Alexander Watson Associates is a global business-to-business market research, publishing, events and advisory services company with a unique focus on the specialty packaging, coating and converting industries. For more information or to access the full review, visit www.awa-bv.com.