Market Trends

| 27 August 2012

FINAT Market trends sub-committee: Labels. Global breakdown of label demand (Part 2)

According to Labels & Labeling International, global label demand (across all technologies) is expected to reach over 50 billion m2 by 2015. World label demand growth for 2012/13 will be approximately 6-7%.
The prime volume markets are foods, beverages, personal care products, and pharmaceuticals. The world’s emerging economies – particularly the BRIC countries – are driving that growth. Self-adhesive labels, along with glue-applied labels, still represent together nearly four fifths of the total label market, but face competition today from sleeving and in-mould labels – both of which are exhibiting positive growth, particularly in the food and beverage markets.
In Europe, the dynamic development in recent years in the eastern countries has slowed somewhat, but remains a key factor in the region’s positive growth.   North American self-adhesive label demand growth has been was driven primarily by VIP applications.   Asia Pacific takes the largest global share of the overall label market today, and here self-adhesive labels demonstrate healthy growth, with new label laminating companies, as well as converters, proliferating.   The newest label market, Africa and the Middle East, combines both mature and unstable economies, but is evidencing healthy overall growth for self-adhesive labels.

Raw materials inflation and sustainability: push for downgauging
With its complex make-up, the self-adhesive labelstock is particularly susceptible to raw material price increases – and these have characterised the market for nearly two years, creating margin pressures at every level of the value chain.  Prices for platinum – the initiator for silicone release coatings – remain extremely high, and crude oil prices, fluctuating in response to world political issues, continue to be of high concern, particularly in relation to plastic films. While paper labels and release liners continue to dominate self-adhesive label use, film facestocks and release liners are gaining market share.   Environmental concerns and the quest for sustainability are encouraging the use of ‘downgauged’ self-adhesive labelstocks – in order to reduce material usage;  to save cost;  to reduce inventory storage space;  to save (thanks to lighter weight) on transport costs.   Lower-gauge film facestocks and release liners are key players in this arena, with significant reductions in basis weight achieved.
Secondary use of label materials: towards commercially-viable solutions
In papers, the manufacturers have more limited opportunities to downgauge, but are concentrating on specialties, like wash-off labelstocks for bottles, security papers embedded with forensic and other taggants, and wine label laminates offering ‘ice bucket’ performance. The proven recyclability of glassine release liner is now beginning to encourage the continuing use of paper labelstocks.
At the same time, the skills of the papermaker are being increasingly employed in the ‘cradle to cradle’ repulping of glassine release liner. It is a sad fact of life, however, that the label industry and its customers have yet to fully take advantage of such schemes: their commercial capacity has not yet been filled.   It is important to add that the remainder of the waste stream created by converting self-adhesive labels – namely the matrix waste – has yet to find a ‘cradle to cradle’ solution – although, as has been proven over a number of years, it can be successfully used in industrial incinerators for waste-to-energy recycling.
The continuing popularity of the ‘no label look’, created using clear film label facestocks, is not the only driver for film usage in self-adhesive labels today. Film release liner, PET or PP, is increasingly a choice today. The combination of film facestock and film liner enables serious downgauging of label laminate, to deliver more labels per reel, fewer roll changes on press and on the labelling line, and therefore significant time and cost savings. Cost savings are additionally enhanced by recycling the film release liner:  world shortages of PE granulate and high demand have made recycled liner a financially viable commodity.

(to be continued)

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