Its new report – The Future of Labels and Release Liners to 2021 – tracks how a global market valued at $34.5 billion (€31.4 billion) in 2016 will grow at an annual rate of 5.4% to reach $44.8 billion in 2021. Demand for label stock will advance ahead of that for release liners. The latter segment Smithers Pira predicts will rise from $6.36 billion in 2016 at 4.6% annually during the period 2016–2021 to reach $7.98 billion.
Reasons for growth
Smithers Pira’s analysis shows how label market growth is being driven by economic, social, demographic and lifestyle changes, including:
- An increasing focus from brand owners on source reduction and sustainability in packaging
- Consumer demand for convenience food
- The growing footprint of large retail chains.
These trends are supported by the relatively low cost at which labelling can be replaced or changed and a continuing need for barcodes and other secondary packaging applications that meet a growing raft of food safety and pharmaceutical compliance issues.
For brands a continuing major trend is to achieve a no-label look, with high clarity plastic label materials for use on glass beer bottles, plastic soft drink and food formats, and many cosmetic and personal care packs. This clear-on-clear proposition enables the premiumisation of packaging and is spurring brands to invest in clean graphics than can stand out from the packaging.
Within the labels market, there are different fortunes forecast for different label types. Pressure-sensitive labels are the dominant sub-segment – with a projected 44.4% share of global labels consumption by area and 63.3% by value in 2016. Wet-glue labels is the second largest category with 35.6% of global labels consumption by area and 22.8% by value. Shrink sleeve labels account for 15.1% by area and 10.6% by value. Stretch sleeves, pre-gummed and in-mould labels each account for a very low market share by area and value.
The dominance of pressure-sensitive labels will expand across the study period, with stretch and shrink sleeves also increasing their modest market shares. In contrast, wet-glue and in-mould labels will have witness average growth across the next five years, and consumption of pre-gummed labels will be virtually static.
Print process shifts
Flexography is the main print process for label production accounting for a projected 37.4% share of global labels output by area in 2016. Most label presses are now configured with multiple printing processes. An eight-colour flexo press may also have a gravure or screen coating unit, an offset station, and increasingly an inkjet unit for serialisation.
Offset lithographic is the second most important print process with a projected 2016 share of 25.9%, followed by gravure with 14.3%, and screen printing with 9.2%.
The disruptive print technology for label producers is digital – inkjet and electrophotography (toner) systems. Smithers Pira data shows that in 2010 digital label printing was 6.9% of the world market by volume. In 2016 this has grown to 11.2%. The ascent of digital is even more evident when figures for value are considered – it accounted for 17.5% of worldwide demand in 2010, but in 2016 this has climbed to nearly 26.2%.
Inkjet and toner
The digital segment is itself divided between inkjet and toner technologies, with the former now seeing the fastest expansion. As digital label segment matures and brands come to see customised digital run labels – first witnessed with campaigns like Coca-Cola’s Share a Coke promotions – as a standard part of their promotional portfolio, volume as well as value is being built into the market. In response to this press builders are designing higher productivity machines to exploit labels work, as more conventional print segments decline. This will foreshadow a wider trend that is now beginning to affect other packaging segments too.
In label production, the narrow-web segment is already highly congested with top speeds of 75m per minute now possible. The emphasis is now on developing wider, higher throughput presses. HP’s Indigo presses are one of the most popular label platforms. At Drupa 2016 in May/June, the latest iteration – the Indigo 8000 – was launched. This operates at speeds up to 80m per minute in full colour using a three-colour enhanced productivity mode, double that of the Indigo WS6800.
Inkjet label print is now developing much faster than toner, though the latter still represents 61% of the digital segment market in 2016, the world inkjet label market will overtake toner label prints in 2020.
In terms of regions Asia is the largest labels market, representing a projected 40.7% share of global labels consumption in 2016. North America accounts for 22.4% of global labels consumption, followed by Western Europe with a share of 19.9%.
Asia is forecast to grow labels consumption at the fastest rate, led by the evolving packaging markets in India and China. This contrasts with slower growth in the established Japanese market.
The mature regions of Western Europe and North America are forecast to grow labels consumption at rates below the global market average rate across 2016-2021.
Developing world supermarkets
Eastern Europe and South and Central America are also expected to grow labels consumption at lower than market average rates, largely due to expectations of faltering economic growth. This is partially mitigated however by the expansion of supermarket chains into these regions with packaged goods carrying labels replacing more traditional with local and independent artisan retailers, largely offering unpacked food.
In the longer term expansion of supermarket shopping and the intensity of competition within the grocery retailing sector as a whole will open up a wide range of new opportunities for label printers in these regions. These will vary from the production of simple price-change flash labels to more sophisticated labelling systems of the type now being used for packed fresh produce.
Shrink sleeve increase
Simultaneously shrink and stretch sleeves are offering new options for brands and converters that account for a significant expansion over the Smithers Pira study period. This is principally due to a greater appreciation of how full-body sleeves that provide 360° pack decoration – increasing the appeal of goods for sale. There is also scope to versionise such sleeve packaging – an option that has been embraced by brands, such as Smirnoff vodka.
Simultaneously in a number of applications, shrink sleeves are being used to fulfil a tamper-evidence function – assuring the customer that a bottled product has not been opened and refilled or otherwise interfered with since leaving the bottling plant. This is also a useful function in other segments, especially pharmaceuticals and cosmetics.
The shrink sleeve sector is also benefitting from technical advances, such as ultrathin shrink films, matt films, opaque films, co-extruded films, and films with higher levels of shrinkage. The trend to downgauge films will restrain growth in consumption of such packaging in terms of material weight and volume, though the surface area purchased will expand across 2016-2021.
Environmental concerns are leading a market trend away from PVC, which has traditionally dominated the shrink sleeves market. This is being replaced by polyester-based alternatives that are easier to recycle at end of life as they do not contain chlorine. Simultaneously other green options are opening up due to the development of shrink sleeves made of polylactic acid (PLA) to wrap containers made of the same biopolymer.
Paper-based products — calendered krafts, including glassine, clay-coated, polyethylene coated, and other grades — will continue to dominate the release liner segment, representing almost 85% of 2016 consumption.
In contrast plastic film-based release liners account for just under 15% of consumption by area in 2016. Film-based liners are, however, showing the highest volume growth for pressure-sensitive and film products due to rising demand from beer, beverage, home and personal care and food brands. In particular there is call for polyethylene terephthalate (PET), polypropylene (PP) and polyethylene (PE) liners driven by the increased demand for clear-on-clear labels that enable sophisticated ‘no-label’ look applications.
However, variable information print – which accounts for around half of the label market for release liners – will always remain paper-based.
A low environmental profile is a key consideration for many brands and packaging converters. An increasingly popular way to demonstrate this is through the use of recycled material in common formats like PET bottles – and this can increasingly be sourced from a previous generation of drinks containers. Investment has been made to ensure paper and plastic labels can be removed from waste bottles, to ensure the recycled plastic is pure enough to make more clear PET bottles.
In Q4 2016, two major label users have published details of new technologies to also recycle waste liners.
A project by Dow Chemical has successfully tested a technology developed by Belgian company Reculiner. This takes paper liner waste from self-adhesive stock and breaks this down into loose fibres that are then converted in dry fibres that can be used as house insulation material. Significantly the presence of silicone on the liner means it has superior flow through application machinery compared to other recyclate stock, like waste newspapers.
Meanwhile Avery Dennison and Coca-Cola in Europe in 2016 are promising to yield an extra 70 tonnes of PET per year by repurposing PET release liner stock after labels are added to the brand’s Smartwater bottles. A trial project has shown that this waste can be shredded and reconstituted into other useable plastics, including PET staple fibre, strapping, and thermoformable sheets. Avery has previous developed a system to allow for the easier removal of labels from glass bottles, so as to prevent them contaminating glass recyclate.
The same imperative is driving the further penetration of linerless labels, where the top surface acts as the release layer for labels in a reel. Major material and adhesive developers – including Appvion, Ashland Coatings, Innovia, Evonik, Henkel and Ravenwood Packaging – are pushing evolution of these labels into the packaging segment.
To the converter these new style labels offer less change over time and reduced transportation costs. Coveris claims, for example that its Compac linerless labels weigh 40% less per reel than conventional liner-mounted stock. Recent innovations in this field include slidable, skin-pack, and super protruding labels for bulky products in the food sector, such as joints of meat.
A major change for labelling for the pharmaceutical segment is now on the horizon with the implementation of mandatory unique identifiers and 2D data matrix codes via the EU’s Falsified Medicines Directive. These will be obligatory from February 2019, but some firms are looking to introduce them before that date.
This is also prompting the development and implementation of new label formats. A key example is the extended content label (ECL), where multiple pages are stored in a booklet-style or concertina design. These allow the storing of necessary regulatory or product specifications and other information – like, instructions of use in multiple languages, coupons or other promotional data – without increasing the overall space the label occupies on a pack’s surface. ECLs are particularly suited to certain pharmaceutical packaging designs like vials for pills.
On pack contents
Another legislative trend – requirements to provide more information on pack contents – will also fuel expansion in this segment. Again Europe is leading this trend, with the imminent implementation of the Food Information Regulation 1169/2011.
Becoming effective from 13 December 2016, it will mandate a host of new information on food packaging, in a minimum font size. These include:
- Allergen information
- Nutrition labelling for most other foods, with the option to provide a simplified version of this more prominently on the front of the pack
- The country of origin, of the food and of the principal ingredients for most fresh and frozen meat
- The water content of fresh meat products
- Caffeine content, with linked warnings for children, pregnant women, and nursing mothers
- The types of vegetable oil used.