Plastic films accounted for 27% of the 13 billion sq meters of label facestock used in Europe in 2008. As per a report by AMI, while the demand for paper-based labels is expected to show little or no growth over the next 5 years, demand for plastic labels is forecasted to grow by more than 6% pa in Europe and at 5% globally in the same period. By 2013, plastic labels will make up a third of the total European label market. Production of film for use in labels is a high-margin, specialty business that film producers are keen to target. The label's importance within the consumer-product marketing mix is fueling demand for plastic labels, and brands remain committed to investing in value-added product presentation. Among the key market drivers: Growing demand for clear-on-clear labels, innovations in plastic containers, plastics' ability to deliver aesthetics and functionality superior to traditional materials and growth in the packaged consumer-goods industry in Eastern Europe.
Self adhesive labels will be the largest application in plastic labels in future. Sleeve is also a large application of plastic label film having more than 20% market share in Europe. Pressure-sensitive labels are the largest European market for plastic-label materials. In sq-meterage terms, plastic p-s labels accounted for 34% of European demand in 2008. There is considerable opportunity for replacement of paper in the p-s area, and this trend will help drive demand growth of 7% pa to 2013. Conversely, plastic glue-applied labels made up a significant 26% of the overall European market last year. This is clearly unlike the US market where the vast majority of all glue-applied labels are paper. New label applications have developed specifically through the use of plastic film, namely in-mold and shrink-sleeve labels. Both are expected to enjoy growth of between 5-6% pa to 2013, driven primarily via new food and beverage container opportunities. A further 10% of the European plastic-label market consists of the release liner used with p-s labels.
The printing and converting of plastic labels across Europe is very fragmented with the top 10 companies accounting for only 39% of production last year. The largest printer of plastic labels, CCL Label, operates several sites across the continent and has a leading position in most plastic-label segments, apart from glue-applied. That sector is led by Constantia and Mondi Packaging. For shrink-sleeves, Fuji Seal dominates as a leading converter with integrated film extrusion and printing operations. Supply of plastic-label film in Europe, on the other hand, is highly concentrated with almost 75% of the total 2008 output coming from only 10 companies. Most of the leading players are focused on a particular segment of the label market, which is a consequence primarily of the film technologies they employ. Nordenia is the top supplier of polyethylene film; Treofan, ExxonMobil and Innovia are the leading polypropylene-film providers to this market; and Klöckner-Pentaplast is the major supplier of polyester and vinyl label films. Polymer material for plastic film used varies according to segment of market. The main polymer used is PP which is the core material used in the production of glue-applied and in-mould labels. PE film is mainly used in self adhesive label, while PET and PVC films find use primarily in sleeve labels. The rapid development of plastic release liner within the self-adhesive labels industry is expected to contribute to annual demand growth of over 10% for PET film in label applications in Europe.
According to a recent report by Freedonia, world demand for labels is projected to expand 5% pa through 2013 to 46 billion square meters. The pressure sensitive segment will continue to see strongest gains, accounting for almost 60% of global label demand by 2013. In contrast, wet glued products will see slowest gains, with demand declining in many developed food and beverage markets where plastic containers continue to make further inroads in place of steel cans and glass bottles and jars. Other presently less significant technologies with favorable outlooks include shrink sleeve, wrap-around film and in-mold. Through 2013, plastic labels will continue to register much faster gains than paper labels that are largely used in wet glued applications. The Asia/Pacific region will expand its share of the world label market from 32% in 2008 to 35% in 2013. China and India will account for much of this increase, while Japan will see weak growth in its market. The market for labels in the US will see below average gains through 2013, but remain strong relative to other developed markets. Western Europe will see a noticeable deceleration in its label market growth, with some highly intensive (relative to population) users of labels in the region such as Ireland, Scandinavia and the United Kingdom expected to see an outright decline in their respective label markets. The remaining regions of the world accounted for just 13% of global label demand in 2008, but will see strongest growth through 2013, with prospects in Latin America and Eastern Europe particularly favorable.
Among the various market segments, the smaller pharmaceutical sector will register particularly strong gains, aided by improving health care in the developing world and an ageing population in the developed world. The food and beverage sectors will see weaker gains as a result of market maturity and stagnant population growth in the developed world, combined with the increasing penetration of cans, pouches and other packaging media that utilize printed product descriptions rather than labels. Certain label products that are part of the “other” segment will see strong growth. Among these are retail sector radio frequency identification tags (RFIDs) that allow labels to assume inventory control and management as well as informational functions. Smart labels will also see healthy growth in safety, security and surveillance applications in areas as diverse as patient monitoring in hospitals, electronic article surveillance in libraries, and next generation military applications.
An earlier report by Freedonia had predicted global label market will advance at 5.5% pa to 42 bln sq. mts in 2011. In dollar terms, demand will grow 8.3% pa, topping US$100 bln. Gains will be fueled by expansion of the world’s packaged consumer-goods markets—specialty beverages, personal-care products and medicinals offer especially good prospects. Also important will be the diffusion of advanced logistics and data-processing systems throughout the developing world, and the development and penetration of technologically sophisticated, value-added labels that serve a range of functions in addition to product identification. Some examples include RFID smart labels; authentication, tamper-evident and other security labels; and expanded-content booklet labels.
The best gains are expected in the world’s emerging economies, which already account for over 40% of global label demand by area. Label markets in developing countries will enjoy robust growth, fueled by generally healthy economies, rising populations and expanding consumer sectors increasingly able to satisfy desires for foods, beverages, HBA and other highly packaged consumer products.
China, which recently surpassed Japan as the world’s second largest label market after the US, will continue to log double-digit demand growth, and is likely to leapfrog the US itself within a decade. India and East European markets such as Poland and Russia also offer especially favorable prospects. Traditional packaging uses are more mature in the developed economies of North America, Western Europe and (especially) Japan, where labels also face stiff competition from direct printing. Still, labels will find opportunities in new applications in inventory control, product security and other areas.
Pressure-sensitive labels, which bested glue-applied as the leading label type in the late 1990s, will account for 55 % of the global market by 2011. P-s label gains have slowed in recent years, however, as growth markets such as wine and electronic security have matured and plastic sleeve, in-mold and wraparound labels have cut into pressure-sensitive’s strongholds such as beverage packaging. In terms of materials, plastic labels will continue to penetrate traditional paper applications, capturing 38% of the world market by 2011.
Gains will be fueled by expansion of the world’s packaged consumer goods markets - specialty beverages, personal care products and medicines offer especially good prospects. Also important will be the diffusion of advanced logistics and data processing systems throughout the developing world, and the development and penetration of technologically sophisticated, value-added labels that serve a range of functions in addition to product identification. Examples include smart radio frequency and interactive packaging labels; authentication tamper evident and other security labels; and expanded content booklet labels. The best gains are expected in the world’s emerging economies, which already account for some 45% of global label demand by area. Label markets in developing countries will enjoy robust growth, fueled by generally healthy economies, new free trade agreements, rising populations and expanding consumer sectors increasingly able to satisfy their desire for foods, beverages, personal care items and other highly packaged consumer products. China will experience explosive growth, surpassing the US as the world’s largest label market within a decade. Traditional packaging uses are more mature in the developed economies of North America, Western Europe and (especially) Japan, where labels also face stiff competition from direct printing. Still, labels will find opportunities in new applications in inventory control, product security and other areas.
Pressure sensitive labels, which surpassed wet glues as the leading label type in the late 1990s, will account for over 60% of the global market by 2011. However, gains have slowed in recent years as growth markets such as wine and electronic security have matured and plastic sleeve, in-mold and wraparound labels have cut into pressure sensitive strongholds such as beverage packaging. In terms of materials, plastic labels will continue to penetrate traditional paper applications, capturing 38% of the world market by 2011. Technological, financial, aesthetic, performance and environmental considerations will all favor the use of plastic over paper substrates. Paper labels, by contrast, will be adversely affected by changes in the packaging mix; paper labels are widely used in slow growing segments like metal and glass packaging, whereas plastic labels are favored in the robust plastic bottle market.