State of the Industry: Labels, Digital Printing Making Significant Inroads
While flexographic printing will continue to be the dominant technology in label printing, digital printing is making significant inroads.July 2013 By Jack Miller
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.
Jennifer Docshtader, managing director at the consulting firm LPC, Inc., explains that the major trend driving change in label printing is the proliferation of SKUs, and this is led by the brands. "This has led to a downward trend in run length and this has fostered the growth in digital print," she adds.