Label Industry (CONT’D FROM PAGE 41)
Direct Thermal Labels : There has been a rise in the use of direct thermal labels, particularly in applications requiring short-term variable data, such as online shop- ping logistics and inventory management. This trend re- flects the broader shift towards e-commerce and process automation. Decline in White Uncoated and Sheet Labels : In contrast, the market share for white uncoated rolls and sheet labels has halved since 2005, reflecting changing consumer preferences and the increasing importance of brand differentiation through high-quality packaging. Looking ahead, the forum highlighted cautious opti- mism tempered by risks and uncertainties: Economic recovery : There is an expectation of mod- erate economic recovery as inflation gradually eases and consumer confidence improves. This recovery, however, is likely to be uneven, with some regions and sectors re- bounding faster than others. Sustainability and regulatory pressures : Sustainability remains a key concern for consumers and, by extension, brand owners. Recent revisions to Extended Producer Responsibility (EPR) schemes are pushing companies to take greater responsibility for the environmental impact of their products, including labels. This is driving demand for eco-friendly materials, such as recycled paper and biode- gradable substrates, and pushing companies to optimize their label procurement processes to reduce costs and waste. CONTINUED ON PAGE 45
the consequences of excess stockpiling, which occurred during the supply chain disruptions of 2022. This has re- sulted in a significant drop in demand for new labelstock in 2023, adding to the industry’s current difficulties. In the first half of 2024 however, stock levels appear to have re- turned to normal. The European label market experienced a notable downturn in 2023, according to data presented at the fo- rum. Overall labelstock demand decreased by 25.8 per- cent, bringing it back to levels not seen since 2013. This decline was largely due to destocking efforts as convert- ers worked through excess inventories built up during the supply chain disruptions of the previous year. In the first half of 2024, however, labelstock demand recovered strongly, with year-on-year increases of 29.4 percent and 22.7 percent respectively. Regardless of the volatility experienced in previous years, the demand for different types of labelstock has also seen structural shifts: Filmic Roll Labelstocks : Despite the overall market contraction, the share of filmic roll labelstocks has con- tinued to grow, reaching nearly 30 percent of the market in 2023. This growth is driven by the increasing use of polypropylene (PP) rolls, particularly in high-quality prod- uct decoration films for sectors like health, beauty, and food, where transparency and the “no-label look” are highly valued.
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September 23, 2024
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