State of the Industry: Labels, Digital Printing Making Significant Inroads
Global label production was 146.9 billion sq. ft. in 2012, with North America representing 22 percent of this volume. Global volume is projected to grow at an average annual compound rate of 3.4 percent from 2012 to 2016 (see Table 1 in the photo tab to the right). While conventional print, led by flexo, will continue to dominate, the greatest growth in label printing will be in digital printing, which is growing at 27 percent per year.
The greatest growth is in the Asia/Pacific region, which grew at more than 6 percent in 2012, while the slowest growth is in Europe, which grew less than one percent in 2012. North American growth was just over 2 percent (See Figure 1 in the photo tab to the right).
Corey Reardon, president and CEO at AWA Alexander Watson Associates, notes that growth in labels has been constrained by alternatives such as flexible packaging (which is replacing rigid packaging), as well as direct printing on rigid packaging. Indeed, flexible packaging is growing faster than either labels or rigid packaging and "the impact of direct inkjet printing is significant," says Reardon.
Labels are available using a variety of substrates, including coated and uncoated paper, metallized paper, metallized or opaque films such as biaxially oriented polypropylene (BOPP) or polyolefins, and pressure-sensitive (ps) media from companies such as MACtac, UPM Raflatac, and Avery Dennison. Labels include ps, sleeves and wraps, in-mold, and glue-applied (cut-and-stack). Wraps and sleeves represent two of the fastest growing segments.
Consolidation continues to be a major factor in label printing. In 2012, Multi-Color Corp. acquired Labelgraphics of Scotland and in 2011 acquired York Label Group in the U.S., plus other printers in Italy, Poland, and China. Similarly, CCL Labels made numerous acquisitions in 2011 and 2012, and most recently announced the acquisition of Avery Dennison's office and consumer label business, plus an Avery Dennison unit that provides designed and engineered solutions. The $910 million deal will push CCL annual revenue above $2 billion and is expected to close during the third quarter of 2013.
Jack Miller is founder and Principal Consultant at Market-Intell LLC, offering Need to Know™ market intelligence in paper, print and packaging. Previously, he was senior consultant, North America, with Pira International.
Known as the Paper Guru, Jack is the former director of Market Intelligence with Domtar, where he also held positions as regional sales manager, territory sales manager and product manager. He has presented at On Demand, RISI’s Global Outlook, PRIMIR, SustainCom World and at various IntertechPira conferences. Jack has written for Printing Impressions, Canadian Printer, Paper 360, PaperTree Letter and Package Printing, along with publishing a monthly e-newsletter, MarketIntellibits.
He holds a Bachelor of Arts degree in Economics from The College of the Holy Cross and has done graduate studies in Statistics and Finance.