Pressure-sensitive labels dominate the global labeling industry today. But that may not always be the case based on data presented at yesterday’s AWA Label Release Liner Industry Seminar 2010. Here’s a quick Converting Curmudgeon rundown on the stats and SWOTs (strengths, weaknesses, opportunities and threats) facing labelmakers and the materials converters that serve them—by way of AWA vp & senior consultant Dr. William Llewellyn.
Global Market Forecast
- From about 16 billion sq meters of materials in 2009, the global p-s label market will grow to roughly 19 billion sq meters in 2014.
- From a -1.5% growth rate last year, p-s labels will climb to about a 4.0% annual growth rate in 2014.
- Regionally, p-s labels accounted for the following market shares in 2009: North America—49%, Europe—41% and Asia-Pacific—37%.
- P-s labels will see the following CAGRs for 2009-2014: Global—3.7%, Asia-Pacific—7.0%, South America—6.5%, North America—4.8%, Rest of the World—2.2% and Europe—1.0%.
- P-s labels are a truly “modern” label format, and as the market-share leader in North America, they become a significant global force in packaging, with that region making up about 30% of the total global field.
- P-s labels’ flexibility of application via a wide range of facestocks, adhesives and release liners means they are a “clean label” technology compared to older glue-applied materials.
- P-s labels tend to have a more complex and extended value chain than competitive label formats. This allows plenty of chances for complications to enter the system.
- Release liners are being treated as “packaging waste, not production waste” and are facing pending legislation in Europe, China and South America. Think taxes a la “The Green Dot.”
- P-s labels’ perceived cost is higher, discouraging new customers in some markets.
- As a mature technology and with high penetration levels in key end-use segments, there are fewer future sales opportunities.
- End-use markets seeing new sales opps: food, beverages (beer and non-alcoholic drinks), pharmaceuticals, stadium cups and large-scale containers.
- RFID, functional and security p-s labels as well as VIP (variable information printing) labels are growing for retailing, transport and logistics applications.
- The BRIC countries of Brazil, India, China and Russia offer new opps being located in the burgeoning markets of South America and Asia-Pacific.
- Heat-shrink sleeves and IMLs (in-mold labels) constitute the biggest threat in other label formats. These are giving p-s labels greater competition in food, beverage, household, cosmetic and functional/technical-goods markets.
- Flexible packaging in its myriad forms is a threat because the whole flexible package is a label, making a separate decoration method unnecessary.
- Retailers now command the market dynamics, deciding more and more what the packaging may be or what type of labeling will be used.
My Thoughts: P-s labels and all the silicone-coated release liners that go with them aren’t going away anytime soon. Sure, there are plenty of challenges and competitive label formats that are chiseling away at their market share, but I think that the potential of new regional sales markets and end-use apps more than offset these downsides. Also, what other label types have the low total applied cost or flexibility and scaleability of p-s labels? Nothing else on the market today!