Sleeve-label market forecast: No shrinkage in sight

Whether as heat-shrink labels, stretch sleeves or those ROSO (roll-on, shrink-on) shrink sleeves, the global sleeve-label market shows no signs of contracting. And, if anything, it will expand faster than industry averages in the next few years. Here are some key insights provided by Dr. William Llewellyn, vp/senior consultant with AWA Alexander Watson Associates, at that group’s recent “2011 International Sleeve Label Conference” held last week in Amsterdam, The Netherlands.

• Overall, sleeve-type label technology made up 12% of the worldwide market in 2010, preceded by glue-applied labels (41%) and pressure-sensitives (40%). As a primary label type, sleeving accounted for 15% of the global market.
• Broken down by region, the world’s sleeve-label sales last year were Europe—38%, Asia-Pacific—32%, North America—25%, Africa—3% and South America—2%.
• By format, heat-shrink sleeves dominated with 76% of the global market in 2010. Stretch sleeves took 16%, and ROSO shrink sleeves had the remaining 8%.
• Future growth for all sleeve-label formats is estimated at 5% to 5.5% a year. Demand remains the strongest in South American, Chinese and Indian markets for heat-shrink. Top end-users overall are foods and beverages, with sleeves seeing new competition from IMLs for household chemicals and from p-s labels for cosmetics.

Among developments impacting converters:

• Materials: Thinner films, matte films, opaque films, coextruded films, and films with higher levels of shrinkage possible are opening up opportunities in container decoration.
• Sustainability: Market development of PLA-based shrink sleeves to wrap PLA-based containers may answer environmental concerns about all-petroleum-based packaging. Meanwhile, European eco concerns are heightened at any materials used to label PET containers, thus making them problematic to recycle.
• Prices and availability: Rising crude-oil prices are driving up polymer costs and creating greater competition among and shortages of polymer types or lengthening delivery lead times of raw films. Low-price film imports from China are exacerbating the problem, while difficulty with availability of PET-G film in North America continues.
• Direct competition: Worldwide, the rapidly rising number of sleeve-label converters is adding pressure for companies to both maintain margins and prove their technical competence and product quality to customers.