The 3.3% growth in the global pressure-sensitive label market that AWA Alexander Watson documented for 2019 will certainly be impacted in 2020 by the COVID-19 virus – but not necessarily negatively in every aspect.   All the world’s regions have experienced market changes as they negotiate life in a pandemic but, on a positive note, ‘lockdown’ has in fact increased demand for e-commerce, online consumer shopping, and therefore for VIP labeling.   Additionally, as some regional markets emerge from the pandemic, AWA are now seeing a consumer desire to enjoy the ‘live’ shopping experience again, restoring activity in primary product labeling, and therefore benefiting pressure-sensitive labels – the leading label format, with a 40% share of the total global labeling market

Corey Reardon | Alexander Watson Associates

Regional Markets

The Asian Market

The Asian region continues to claim the highest percentage of the pressure-sensitive label market, with a 38% share, and it is continuing  to grow – by 5.1% in 2019 over 2018 — albeit at lower rates than in the years of dynamic regional development.   Asia also hosted the world’s highest estimated number of active label printers and converters in 2019, with a 39% share of the global total.  

North America & Europe

North America and Europe also experienced growth in pressure-sensitive label consumption in 2019, at 2.3%, and 2.2% respectively. These were slower rates than in recent years, reflecting geographical and international trading tensions, and it is worth underlining that both these regions already enjoy high levels of pressure-sensitive labeling penetration in all the prime end-use sectors, making them vulnerable to competition from other labeling technologies.  

South America

South America has partially recovered from its regional economic and social unrest crises to grow its label market at 2% in 2019, and it is expected in the long term to continue to enjoy the benefits of developments in retail and distribution networks, and of increasing personal incomes, that are driving global brand owners’ interest in selling their products across South America.  However, South America will undoubtedly be hit harder by the effects of COVID-19 than the more economically-stable markets of Europe and North America.   

Africa & Middle East  

Even the pressure-sensitive label market in the Africa and Middle East region is enjoying positive growth – at 3.6%  in 2019, and with a CAGR of 4% for 2019-2022 — albeit from a low starting base.   Israel and South Africa already have well-established pressure-sensitive label markets, but per capita consumption in other parts of the region is low, and represents a significant demographic driver for additional volumes.   This region is unquestionably a new focus point for the labeling and packaging industry as a whole.  

End-use markets:  food and beverage labels

Globally, food remains the biggest single end-use market segment for pressure-sensitive labels of all kinds – primary, secondary, and on-pack VIP labeling, as well as specialty and promotional label features.   The diverse nature of ‘foods’ brings a number of specialist requirements that primary pressure-sensitive labels’ specialist laminates are well-positioned to meet, such as resistance to oils and fats and to high and low temperatures;    US, FDA, BGA, and other health and safety regulations;  leaflet labels;  product identification/sell-by dates;  tamper evidence and freshness indication; and combination label/pack seals.  24% of all pressure-sensitive labels were recorded as serving food labeling applications in 2019.  The beverage end-use segment also commands a high usage of pressure-sensitive labels, with a strong 12% share of the global market.  

However, significantly, transport and logistics applications represent an even higher 14% share of pressure-sensitive end-usage today – a sign of the times, since variable information printing is the key factor in supporting a safe, trustworthy e-commerce/internet sales supply chain.  

Other specialist and often market-specific functional, durable, and security label applications claim an additional 5% share of the total market. 

Additional core end-use markets

Other core end-use markets for pressure-sensitive labels today are health and personal care, pharmaceuticals, and household and industrial chemicals;  and retailing itself claims an additional 9% of the end-use market for such purely-functional applications as point-of-sale priceweigh labeling, on-pack and on-shelf price reductions, inventory management, and distribution.

Pressure-sensitive labelstocks offer a key functionality for high-value consumer durables labeling.   Durable pressure-sensitive labels for  automotive and electronics product components, for example, will meet related product compliance requirements, as well as certification to UL, CSA, or other safety standards.

Promotional labels today may represent only 4% of pressure-sensitive label usage, but their definition is currently constantly changing, with the advent of such trends as product personalization, limited editioning, and on-pack access to product data.

Product authentication and security

Product authentication and security labeling remain a key high-value market for pressure-sensitive labels.  The pressure-sensitive laminate is in itself a recognized contributor to product safety, and applications are increasing.   Today they include active and diagnostic labels to assist the consumer’s appreciation of the freshness of a food product as well as an increasing number of additional on-pack features and, while they may demand changes to standard on-press label production techniques, such extra effort will be profitable.

Facestock choices

In terms of facestocks, coated papers remain the worldwide choice for most labeling applications, representing a 36% market share, with direct thermal and thermal transfer papers claiming an additional 24% for variable information printing.  

Film substrates – PP and PE — take 14% and 6% shares respectively, and are gaining market share.   In a recent development, PP prime label facefilm applications such as the clear ‘no label look’ for beverages are now also joined by durable variable information printing – sometimes with specialist topcoats that deliver not only durability but also compatibility with the different label printing processes – screen, flexo, offset, and digital.   An interesting additional trend in the face of rising price pressures on the label supply chain – particularly in terms of adhesives and printing inks — is the current developments in printability on film labelstocks that do not require topcoatings.

Sustainability

Recycling issues are centered round pressure-sensitive release liner – but it is now widely known that it is a high-value, eminently recyclable/reusable material, whether paper or film; and specialist collection systems are increasingly in place around the world’s label markets to help converters and label application teams at contract packers and brand owners to recycle spent liner and matrix waste.

Later:  post-COVID-19 impact analysis

AWA are already establishing the research and reporting structure to document and report on the post-COVID-19 impact on the pressure-sensitive value chain as a whole, and expect to be able to detail outcomes during Q3 2020, which will be added gratis as supplementary  content for a number of their current market research studies.

This industry as a whole will be closely watching COVID-19 supplier, conversion, and end-user developments in relation to pressure-sensitive labeling, across the different regions, as the remaining months of 2020 go by.