A new report from industry consultants, AMI Consulting, notes that, despite the economic hardships of recent years, plastic label demand grew on average by 6% per year since 2008. While the end-use applications are relatively mature in Europe, plastic labels converters are taking market share from paper at an increasing rate.
According to the study, Plastic labels in Europe, the increasing penetration of plastic labels is driven by factors including improved brand positioning, more frequent brand revamps and paper/pulp price volatility.
Other factors pushing up demand for plastic labels include technological advancements which are driving major changes. New technology converters to print smaller batches, much quicker lead times, creating greater operational flexibility, reduced stock holding and improved cash flow. The ability of label makers to adopt and exploit new technology helps define winners from losers. These factors are described in the report as “complex supply chain issues” with far-reaching implications.
“Plastic glue applied labels illustrated the paper to plastic transition best, through the wrap around labels in the beverage industry, which resulted in 400 million square meters additional demand in the past three years. Plastic dominates the in-mould labels segment as well,” ABI reported.
“In self-adhesive labels, the key issue is inter-material competition of PP and PE. PP is expanding penetration, driven by the growing demand of clear-on-clear labels allowing for no-label look. Similarly, PET increased its penetration versus PVC in shrink sleeves.”
There are segments of the industry for which economies of scale are important and in these segments companies like Avery Dennison and Raflatac dominate. In other segments and at points of the value chain the industry is fragmented.
