Labels: The State of the Industry
World demand for labels by region 2011 (Source: AWA Alexander Watson Associates)
North American label market 2011—market share by technology (Source: AWA Alexander Watson Associates)
Labels in every format continue to perform an essential function for product identification and various value-added functions: decoration, brand promotion, and security. As such, they represent a key element of the packaging, logistics, and brand promotional market in every segment, from food and beverages to electronics components, and pharmaceuticals, and are a key indicator of economic health around the globe.
Despite the ongoing impacts of the global economic crisis, world GDP is set to grow this year at 2.4 percent, with much of that growth centered in the world’s emerging economies, particularly China (7.5 percent), India (6.9 percent), and Brazil (3.3 percent). These are healthy growth rates—but they have slowed significantly over recent years, reflecting the slowdown in exports to the struggling developed markets of North America and Europe, as well as the implications of the lack of financial controls governing inflation in many ‘young’ economies.
North America and Europe—the world’s most mature markets—cannot hope to match these growth rates; and in the U.S., GDP is forecast to reach 2.3 percent in 2012—slightly lower than the global average. This is still a better projection than that for Europe, where the IMF considers economic health to be weak, with concerns on a return to recession, sovereign debt, and high unemployment. The Euro zone is forecast at -0.6 percent growth, and countries outside the Euro, while not exhibiting negative growth, show limited possibilities.
Label market today
Label market growth is certain to reflect these economic growth patterns across all the technologies currently employed to decorate and identify products, including the ‘non-labeling’ technologies: flexible packaging; cartons; and direct-printed bottles and cans. 2011 evidenced an overall slowing of demand in the second half of the year because companies de-stocked, driving down costly inventory in the hope that 2012 would see reductions in some raw material prices—particularly paper pulp and PET film—and reductions in high energy costs which were impacting manufacturing, distribution, and converting.