Its new report – The Future of Labels and Release Liners to 2021 – tracks how a global market valued at $34.5 billion (€31.4 billion) in 2016 will grow at an annual rate of 5.4% to reach $44.8 billion in 2021. Demand for label stock will advance in step with that for release liners. The latter segment Smithers Pira predicts will rise from $6.36 billion in 2016 at 4.6% annually during the period 2016–2021 to reach $7.98 billion.
Reasons for growth
Smithers Pira’s analysis shows how label market growth is being driven by economic, social, demographic and lifestyle changes, including:
- An increasing focus from brand owners on source reduction and sustainability in packaging
- Consumer demand for convenience food
- The growing footprint of large retail chains.
These trends are supported by the relatively low cost at which labelling can be replaced or changed and a continuing need for barcodes and other secondary packaging applications that meet a growing raft of food safety and pharmaceutical compliance issues. Another legislative trend – requirements to provide more information on pack contents – will also fuel expansion in this segment; as do certain security-related issues.
With the labels market, there are different fortunes forecast for different label types. Pressure-sensitive labels are the dominant sub-segment – with a projected 44.4% share of global labels consumption by area and 63.3% by value in 2016. Wet-glue labels is the second largest category with 35.6% of global labels consumption by area and 22.8% by value. Shrink sleeve labels account for 15.1% by area and 10.6% by value. Stretch sleeves, pre-gummed and in-mould labels each account for a very low market share by area and value.
The dominance of pressure-sensitive labels will expand across the study period, with stretch and shrink sleeves also increasing their modest market shares. In contrast, wet-glue and in-mould labels will have witness average growth across the next five years, and consumption of pre-gummed labels will be virtually static.
Flexography is the main print process for label production accounting for a projected 37.4% share of global labels output by area in 2016. Most label presses are configured with multiple printing processes. An eight-colour flexo press may also have a gravure or screen coating unit, an offset station, and increasingly an inkjet unit.
Offset lithographic is the second most important print process with a projected 2016 share of 25.9%, followed by gravure with 14.3%, and screen printing with 9.2%.
In terms of regions Asia is the largest labels market, representing a projected 40.7% share of global labels consumption in 2016. North America accounts for 22.4% of global labels consumption, followed by Western Europe with a share of 19.9%.
Asia is forecast to grow labels consumption at the fastest rate, led by the evolving packaging markets in India and China. This contrasts with slower growth in the established Japanese market.
The mature regions of Western Europe and North America are forecast to grow labels consumption at rates below the global market average rate. Eastern Europe and South & Central America are also expected to grow labels consumption at lower than market average rates, largely due to expectations of faltering economic growth.
Shrink sleeve increase
The shrink and stretch sleeves are offering new options for brands and converters that account for a significant expansion over the Smithers study period. This is principally due to a greater appreciation of how full-body sleeves that provide 360° pack decoration – increasing the appeal of goods for sale. There is also scope to versionise such sleeve packaging – an option that has been embraced by brands, such as Smirnoff vodka.
Simultaneously in a number of applications, shrink sleeves are being used to fulfil a tamper-evidence function – assuring the customer that a bottled product has not been opened and refilled or otherwise interfered with since leaving the bottling plant.
The shrink sleeve sector is also benefitting from technical advances, such as ultrathin shrink films, matt films, opaque films, co-extruded films, and films with higher levels of shrinkage. The trend to downgauge films will restrain growth in consumption of such packaging in terms of material weight and volume, though the surface area purchased will expand.
Environmental concerns are leading a market trend away from PVC, which has traditionally dominated the shrink sleeves market. This is being replaced by polyester-based alternatives that are easier to recycle at end of life as they do not contain chlorine. Simultaneously other green options are opening up due to the development of shrink sleeves made of polylactic acid (PLA) to wrap containers made of the same biopolymer.
Paper-based products — calendered krafts, including glassine, clay-coated, polyethylene coated, and other grades — will continue to dominate the release liner segment, representing almost 85% of 2016 consumption.
In contrast plastic film-based release liners account for just under 15% of consumption by area in 2016. Film-based liners are, however, showing the highest volume growth for pressure-sensitive and film products due to rising demand from beer, beverage, home and personal care and food brands. In particular there is call for polyethylene terephthalate (PET), polypropylene (PP) and polyethylene (PE) liners driven by the increased demand for clear-on-clear labels that enable sophisticated ‘no-label’ look applications.
However, variable information print – which accounts for around half of the label market for release liners – will always remain paper-based.