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FLEXO Magazine : November 2011
Industry Indicators U.S. Demand for Labels to Reach $20 Billion in 2015 Paper outperforms Plastic; significant shifts are Forecast Label shipments in the United States are forecast to rise 4.8 percent annually to $20 billion in 2015, accord- ing to Fredonia Group researchers. They say that the pressure sensitive segment will continue to dominate output, accounting for more than 70 percent of the total. Growing competition will come from alternative labeling methods, such as stretch sleeve, heat-shrink and in-mold labels. Predictions point to heat-shrink labels advancing at the fastest rate through 2015, with gains attributable to their ability to form-fit contoured containers, providing 360-degree graph- ics and a broad promotional area which enables consumer products to stand out on crowded store shelves. These and other trends are presented in Labels, a new study from The Freedonia Group, Inc. Researchers report that paper will remain by far the leading stock material in the label industry for the foresee- able future. However, it will continue to lose market share to plastic, which will account for more than one-quarter of label shipments in 2015. Plastic stock materials will gain popularity due to their aes- thetic and performance advantages over paper, as well as a broad shift in favor of plastic packaging. Moreover, plastic is heavily utilized in pressure sensitive, heat-shrink, stretch sleeve, in-mold and thermal transfer labels, each of which is expected to grow at a healthy rate. Among plastic label resins, Freedonia maintains that polypropylene and polyvinyl chloride are widely used, but says the latter will lose out to other plastic substrates with lower perceived environmental and health risks. In particular, trends favoring more environmentally friendly substrates will propel gains for polylactic acid, albeit from a very small base. Primary packaging represents the leading application for labels in the U.S . market. Label demand in this sector will be driven by a shift in product mix favoring higher-value label types (including large, full-body labels, plastic labels and those featuring higher-end inks and printing technologies). US LABEL SHIPMENTS (million dollars) % Annual Growth Item 2005 2010 2015 2005- 2010 2010- 2015 Label Shipments 13220 15840 20000 3.7 4.8 Pressure Sensitive 9160 11000 14160 3.7 5.2 Glue-Applied 2445 2735 3200 2.3 3.2 Stretch Sleeve & Heat-Shrink 830 1180 1520 7.3 5.2 Thermal Transfer 230 265 340 2.9 5.1 In-Mold 185 260 330 7.0 4.9 Other 370 400 450 1.6 2.4 ©SoURce: The FReeDonia GRoUp, inc. Freedonia Group findings substantiate the fact that labels play a crucial role in the building of brand identity in an in- tensely competitive consumer product marketplace. However, the secondary packaging and mailing and shipping seg- ments will achieve more rapid demand gains. In secondary labeling, advances will be supported by the penetration of barcoding labels in the transportation and distribution sector, along with the significant potential for smart labeling markets, such as food safety applications. n Editor’s Note: “Labels,” published in August 2011, is a new, 349-page study, available for $5,100 from The Freedonia Group, Inc. , 767 Beta Dr., Cleveland, OH 44143-2326. For further details, please contact Corinne Gangloff by phone 440-684-9600 , or e-mail email@example.com. FREEDONIA’S FINDINGS • Labels play a crucial role in the building of brand identity in an intensely competitive consumer product marketplace • Paper will remain the leading stock in the label industry for the foreseeable future. • Trends favoring environmentally friendly substrates will propel gains for polylactic acid resins. • Demand will be driven by a shift in product mix favoring higher-value label types including: large, full-body labels; plastic labels and those featuring higher-end inks and printing technologies. 10 FLEXO november 2011 www.flexography.org FLX_November11.indd 10 11/8/11 3:46 PM