Changing Environment
The tag and label industry marches forward with the continuing evolution in markets and technologies.
March 2007 by Tom Polischuk
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The tag and label industry continues on a steady path of change. It wasn’t too long ago that primary product labeling meant one of two decoration formats—pressure-sensitive or glue-applied paper labels. But with major inroads being made by film materials and competition from other product decoration methods, tag and label printers find themselves dealing with a multitude of challenges and opportunities.
Corey Reardon, president and CEO of AWA Alexander Watson Associates, acknowledges the changing landscape of the tag and label industry. “Product decoration and identification has become a much broader platform in recent years, with the two macro technologies—pressure-sensitive and wet glue labels—now competing actively with a variety of sleeving technologies, with in-mold labeling, and, most significantly, with direct print onto unsupported film and paper webs, i.e., flexible packaging.”
AWA was the architect of the just-released Tag and Label Manufacturers Institute (TLMI) 2007 North American Label Study (NALS). AWA’s research for this extensive study showed a still-hefty 46 percent North American market share for pressure-sensitive labels, along with 44 percent for cold glue, wrap-around cut-and-stack, and wrap-around reel-fed labels. Growth for pressure-sensitive labels in the NAFTA region is predicted to be 1.5 to 2.0 percent annually during the 2006 through 2010 time frame.
Although this growth rate is a far cry from the “good old days,” the expanding scope of product decoration is not necessarily a detriment to the label printer, says Reardon. “Today’s high-tech, narrow-web presses—particularly combination presses—enable printers traditionally specializing in pressure-sensitive labels to offer their customers packaging print for many of these alternative technologies, in addition to their core label printing capability.”
Along these same lines, John Hickey, chairman of the TLMI Board of Directors and owner of Smyth Companies, Inc., believes the future is being written by what is taking place today. “You just need to look at our well-funded, innovative suppliers for presses and substrates who continue to spend R&D dollars on servo technologies, platform presses, thinner films, etc. to see where the future is going.”
Many label printers are currently positioning themselves for these realities. According to the NALS, 38 percent of TLMI converters are currently producing packaging other than labels, particularly unsupported flexible packaging films and laminates. They are taking advantage of the multi-substrate capabilities of the state-of-the-art presses to provide their customers a broader range of product offerings.
Challenging economics
The North American tag and label printing industry is characterized by a large number of relatively small, privately owned companies that can easily be caught in a supply chain pricing squeeze. Reardon believes that label printers will continue to be pressured from both sides of their value chain, which in many cases can be suppliers or customers that have scale advantages well beyond those of the printers.
Corey Reardon, president and CEO of AWA Alexander Watson Associates, acknowledges the changing landscape of the tag and label industry. “Product decoration and identification has become a much broader platform in recent years, with the two macro technologies—pressure-sensitive and wet glue labels—now competing actively with a variety of sleeving technologies, with in-mold labeling, and, most significantly, with direct print onto unsupported film and paper webs, i.e., flexible packaging.”
AWA was the architect of the just-released Tag and Label Manufacturers Institute (TLMI) 2007 North American Label Study (NALS). AWA’s research for this extensive study showed a still-hefty 46 percent North American market share for pressure-sensitive labels, along with 44 percent for cold glue, wrap-around cut-and-stack, and wrap-around reel-fed labels. Growth for pressure-sensitive labels in the NAFTA region is predicted to be 1.5 to 2.0 percent annually during the 2006 through 2010 time frame.
Although this growth rate is a far cry from the “good old days,” the expanding scope of product decoration is not necessarily a detriment to the label printer, says Reardon. “Today’s high-tech, narrow-web presses—particularly combination presses—enable printers traditionally specializing in pressure-sensitive labels to offer their customers packaging print for many of these alternative technologies, in addition to their core label printing capability.”
Along these same lines, John Hickey, chairman of the TLMI Board of Directors and owner of Smyth Companies, Inc., believes the future is being written by what is taking place today. “You just need to look at our well-funded, innovative suppliers for presses and substrates who continue to spend R&D dollars on servo technologies, platform presses, thinner films, etc. to see where the future is going.”
Many label printers are currently positioning themselves for these realities. According to the NALS, 38 percent of TLMI converters are currently producing packaging other than labels, particularly unsupported flexible packaging films and laminates. They are taking advantage of the multi-substrate capabilities of the state-of-the-art presses to provide their customers a broader range of product offerings.
Challenging economics
The North American tag and label printing industry is characterized by a large number of relatively small, privately owned companies that can easily be caught in a supply chain pricing squeeze. Reardon believes that label printers will continue to be pressured from both sides of their value chain, which in many cases can be suppliers or customers that have scale advantages well beyond those of the printers.
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