FINAT Market trends sub-committee: Labels. Connections (Part 4 – Final)

Connecting the global label industry network
In an increasingly-global label market, there is a real need for a ‘living’ network for the whole base of industry players, sharing information and knowledge, transcending the boundaries of countries and languages. Within less than three years, the L9 – the global collective of label industry associations, of which FINAT is a founder member – has made enormous strides in this direction, sharing knowledge and experience on sustainability and recycling;  jointly promoting the label industry’s ‘best-in-class’ at the World Label Awards;  introducing benchmarking and standardised best practices; And thus bringing benefits for all members and their end-user customers.

Labels: the interactive medium connecting product and consumer
Label content is becoming increasingly an issue as the requirements of brand owner and retailer are transcended by the requirements of legislation on information and food safety, security and logistics input, and customer-accessible additional information via QR codes and similar devices. As a result of this broader agenda for label content, label size has increased; and leaflet label usage has grown considerably – particularly for pharmaceuticals. In the pharmaceutical field in particular, in the face of growing instances of counterfeiting, the addition of Braille content, and overt and covert security and track-and-trace devices is extensive.
In this context, there are real opportunities for label printers to engage with commercial packaging companies – in cartons, for example – to add value in terms of enhanced customer experience and engagement with a particular brand.   Self-adhesive labels can certainly enable mainstream sectors of the packaging industry to benefit from 21st century brand identification strategies, without the need to change their core technology base.

Corporate strategies for the label printer
The self-adhesive label converting industry came into existence very much as a family concern, based on small businesses, initially serving regional or specialist markets. The international nature of today’s leading brands and growing globalisation have necessarily changed the face of the industry via a continuing stream of mergers and acquisitions. However, the industry values its origins, and there is a strong desire to retain the ‘family’ aspects of the business, even in the context of ‘growing’ the company.
As a relatively young industry in the context of printing, and a downstream user of a variety of raw materials, there are many things label converters can learn from old-established industries like paper and board, and from new packaging formats like flexible packaging.   Their successes can be analysed, and could indeed be replicated in part in label converting businesses.   Equally, there are lessons to be learned from other industries about what NOT to do.

Succession planning a key factor…
Succession planning is therefore a key factor today: many companies were set up in the 1980s, and their senior management needs now to embrace the younger generation. In this context, cross-border/cross-specialty business partnerships can create a viable alternative to formal M&A activity, and is an increasingly popular choice for label converters today. Succession planning and management are topics which are central to FINAT’s and TLMI’s philosophy, and topics which initiatives like the FINAT Young Managers’ Club are addressing in a practical fashion.

… but partnering strategies equally important
But there are other, complementary strategies to prepare label companies for the future – strategies that have brought growth and even greater success for some of the world’s leading companies, in industries far removed from making labels.   The options are wide.   Label companies can make a conscious decision to stay local, serving a local market with an intensely-focused service platform.   Alternatively, they can specialise in high-end solutions for specific markets – like pharmaceuticals.   They can enter into different kinds of partnerships to create flexibility, manage complexity, and share risk.   One option is to develop international business alliances with other label companies of similar status to build a network – perhaps to supply major global brand owners.  Another is to partner with similar companies in creating commodity “buying centres”, with which all participants can enjoy reduced costs through leveraging economies of scale.   Creating knowledge and learning hubs through industry communities like FINAT enables the label converting industry as a whole to move forward, professionally, in external technology platforms, with resultant benefits for all.  These are all strategies for growth.

A dynamic and creative sector of the packaging chain
Packaging has come a long way since the original paper bag – and labelling has had to move with the times to embrace developments that have encompassed tin cans, plastic bottles, and flexible packaging. Self-adhesive labels have proved themselves perfect, innovative partners in all these developments. They continue to represent a dynamic and creative sector of the packaging chain, offering unparalleled flexibility and versatility. What is more, they are the product of a value chain that is deeply committed to sustainability, lean manufacturing, and – above all – meeting the buyers’ needs in terms of aesthetics, applied performance, and price.

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