What’s the Next Move
To stay in the game, package printers must play to their strengths in a changing landscape.
March 2006 by Corey Reardon
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In today’s packaging markets, constant change is just the starting point. Technology is moving rapidly, with flexible packaging now playing a major role—in the form of pouches, often barrier-coated—as the container of choice for many snack foods, drinks, and other consumer products. Molded packaging is a major feature on supermarket shelves, as are all rigid plastics; and metal containers are also showing growth.
Increasing awareness of the good environmental characteristics of paper-based products has led to a resurgence of interest in cartonboard as a packaging medium. In the product-decoration field, sleeving in all its forms, is growing fast.
Print technologies have also moved on, with flexo now the dominant narrow- and medium-web print technology, and digital label printing continuing to grow, and developing a broader base of market niches. Above all, the advent of RFID is creating interest throughout the packaging supply chain—particularly in the self-adhesive label world.
All these developments are happening within the context of a broader geographic playing field which, as well as creating significant opportunities worldwide, also represents a threat in many areas of the package-printing industry.
In North America for example, our recent research in the label market shows 3-4 percent overall annual growth. However, the “traditional” product decoration and identification technologies are somewhat static. Glue-applied label usage is declining at 0.5-1 percent, and self-adhesive label usage is growing at just 2-2.5 percent. The newer technologies are performing better: in-mold labeling (from its small but growing base of 2.3 percent of the market) is increasing at 4 percent per year; and the sleeving technologies as a whole are showing the highest growth, with annual rates in excess of 15 percent (shrink sleeving at 7 percent).
The influence of world-leading product manufacturers such as Procter & Gamble and global retailers like Wal-Mart is felt throughout the package-printing industry. The volumes of packaging involved in doing business with these two prime industry sectors today are at the center of their aggressive purchasing policies, which have created margin pressures throughout the packaging value chain, and show no signs of diminishing.
For FMCG (fast moving consumer goods) companies, the importance of maintaining brand identity and integrity across continents is now also a major driver of their purchasing practices. Manufacturing and packaging products from a central location for export is one way to achieve this—but the costs of exporting can be high and the logistics complex.
There are strong arguments for establishing manufacturing and packaging facilities in the developing economic regions of eastern Europe, China, India, or South America, where labor costs are lower, production can be oriented to the local market, and import tariffs and transport costs avoided. Packaging industry suppliers—paper, board, film, label substrates—are already establishing a supply base in these new markets, and many of them offer the globally-available products that enable brand owners to protect the consistency of their brand image throughout the world.
Increasing awareness of the good environmental characteristics of paper-based products has led to a resurgence of interest in cartonboard as a packaging medium. In the product-decoration field, sleeving in all its forms, is growing fast.
Print technologies have also moved on, with flexo now the dominant narrow- and medium-web print technology, and digital label printing continuing to grow, and developing a broader base of market niches. Above all, the advent of RFID is creating interest throughout the packaging supply chain—particularly in the self-adhesive label world.
All these developments are happening within the context of a broader geographic playing field which, as well as creating significant opportunities worldwide, also represents a threat in many areas of the package-printing industry.
In North America for example, our recent research in the label market shows 3-4 percent overall annual growth. However, the “traditional” product decoration and identification technologies are somewhat static. Glue-applied label usage is declining at 0.5-1 percent, and self-adhesive label usage is growing at just 2-2.5 percent. The newer technologies are performing better: in-mold labeling (from its small but growing base of 2.3 percent of the market) is increasing at 4 percent per year; and the sleeving technologies as a whole are showing the highest growth, with annual rates in excess of 15 percent (shrink sleeving at 7 percent).
The influence of world-leading product manufacturers such as Procter & Gamble and global retailers like Wal-Mart is felt throughout the package-printing industry. The volumes of packaging involved in doing business with these two prime industry sectors today are at the center of their aggressive purchasing policies, which have created margin pressures throughout the packaging value chain, and show no signs of diminishing.
For FMCG (fast moving consumer goods) companies, the importance of maintaining brand identity and integrity across continents is now also a major driver of their purchasing practices. Manufacturing and packaging products from a central location for export is one way to achieve this—but the costs of exporting can be high and the logistics complex.
There are strong arguments for establishing manufacturing and packaging facilities in the developing economic regions of eastern Europe, China, India, or South America, where labor costs are lower, production can be oriented to the local market, and import tariffs and transport costs avoided. Packaging industry suppliers—paper, board, film, label substrates—are already establishing a supply base in these new markets, and many of them offer the globally-available products that enable brand owners to protect the consistency of their brand image throughout the world.
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