State of the Industry: BY JACK MILLER

L A B E L S
While flexographic printing will continue to be
the dominant technology in label printing,

G
digital printing is making significant inroads.

lobal label production was 146.9 bil- Corey Reardon, president and CEO at AWA Alexander
lion sq. ft. in 2012, with North America Watson Associates, notes that growth in labels has been
representing 22 percent of this volume. constrained by alternatives such as flexible packaging
Global volume is projected to grow at
an average annual compound rate of 3.4 TABLE 1 GLOBAL LABEL FORECAST
percent from 2012 to 2016 (see Table 1). (million square feet)
While conventional print, led by flexo, will continue to
2012 2016 CAGR
dominate, the greatest growth in label printing will be in
digital printing, which is growing at 27 percent per year. TOTAL 146,913 168,072 3.4%
The greatest growth is in the Asia/Pacific region, which Conventional 142,974 157,816 2.5%
grew at more than 6 percent in 2012, while the slowest growth Digital 3,939 10,256 27.0%
is in Europe, which grew less than one percent in 2012. North Source: IT Strategies
American growth was just over 2 percent (See Figure 1).

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 FIGURE 1 all driven major growth in the digital labels sector.”
Other forms of packaging such as folding cartons and
Global and Regional Label Market flexible packaging have not yet embraced digital print
Growth Rates 2012 vs. 2011 to the same degree as labels despite the proliferation of
(percent change)
SKUs. Why?
Relative to other forms of packaging, labels are small.
Global This is significant for two reasons: because the size of
labels makes them a good fit for current digital press for-
Africa & Middle East mats, where presses are narrower and suitable for labels
South America but not for folding cartons or corrugated, and also because
while a run of 50,000 folding cartons is a “long” run, a run
Asia Pacific of 50,000 labels is a “short” run.
North America Bob Leahey, associate director of InfoTrends’ Color
Digital Label and Packaging Service, expands on the
Europe trend toward digital. “There are two megatrends among
0 1 2 3 4 5 6 7 brand owners that support the growth of the color digital
Source: Labeling & Product Decoration Market: Global Review
press market in label and packaging uses. One is the brand
2013, AWA Alexander Watson Associates owners’ focus on target marketing, and the other is their
focus on lean manufacturing.”
Gerry Zampini, national account manager, Multi-Color
(which is replacing rigid packaging), as well as direct print- Label Canada Corporation (MCC), details the value proposi-
ing on rigid packaging. Indeed, flexible packaging is grow- tion. Companies like MCC often do vendor-managed inven-
ing faster than either labels or rigid packaging and “the im- tory (VMI) for customers. They might print 600,000 labels
pact of direct inkjet printing is significant,” says Reardon. over 12 months, and Zampini says, “We see the break-even
Labels are available using a variety of substrates, includ- point for digital vs. conventional is moving toward 50,000
ing coated and uncoated paper, metallized paper, metallized labels, so we have a decision to make: is it better to print
or opaque films such as biaxially oriented polypropylene all the labels in one run of offset or flexo, or is it better to
(BOPP) or polyolefins, and pressure-sensitive (ps) media print as needed using digital?” MCC has multiple HP Indigo
from companies such as MACtac, UPM Raflatac, and WS6000 and WS6600 presses, and digital is growing.
Avery Dennison. Labels include ps, sleeves and wraps, in- Currently, electrophotography (EP), or toner-based
mold, and glue-applied (cut-and-stack). Wraps and sleeves printing, dominates the digital label market with 83 percent
represent two of the fastest growing segments. of global digital label volume in 2012, and is growing at 22

Trends TABLE 2 GLOBAL DIGITAL LABEL FORECAST

Consolidation continues to be a major factor (million square feet)
in label printing. In 2012, Multi-Color Corp. CAGR
acquired Labelgraphics of Scotland and 2011 2012 2013 2016 11 - 16
in 2011 acquired York Label Group in the Electrophotography 2,467 3,269 4,218 6,777 22.4%
U.S., plus other printers in Italy, Poland, and UV Inkjet 363 670 1,112 3,479 57.2%
China. Similarly, CCL Labels made numer-
ous acquisitions in 2011 and 2012, and most TOTAL 2,830 3,939 5,330 10,256 29.4%
Source: IT Strategies
recently announced the acquisition of Avery
Dennison’s office and consumer label busi-
ness, plus an Avery Dennison unit that provides designed percent per year (see Table 2). While EP leads digital label
and engineered solutions. The $910 million deal will push print, inkjet is growing even faster, at 57 percent per year.
CCL annual revenue above $2 billion and is expected to Digital labels are virtually all narrow web printed
close during the third quarter of 2013. and two press manufacturers dominate: HP Indigo and
Jennifer Docshtader, managing director at the consulting Xeikon. Printfuture estimates that Indigo has a 70 percent
firm LPC, Inc., explains that the major trend driving change share of the EP market.
in label printing is the proliferation of SKUs, and this is led by Christian Menegon, HP Indigo worldwide business
the brands. “This has led to a downward trend in run length development manager, explains that “digital has its specs
and this has fostered the growth in digital print,” she adds. and is not designed to fully replace analog; both coexist and
Neil Falconer, managing director at UK-based consult- each has its place.” Menegon points out that the tradeoffs
ing firm Printfuture concurs: “Labels are an integral part of between digital and flexo are more complex than just run
the packaging of products. However, exponential growth length: “Flexo can do printing and converting of any kind
in SKUs, the use of VDP for versioning, smart label ap- in one pass.” This includes PMS spot colors, embossing,
plications, and security features for brand protection have foil stamping, and in-line finishing, but Menegon points
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out, “this means longer set-up times
and higher waste, hence flexo is more
appropriate for longer runs. The whole
chain efficiency has to be considered,
not only one element.”
Menegon also notes that digital run
lengths are trending upward: “Some
customers are doing digital runs of
50,000 and well beyond.” Menegon
adds that requirements for flex-
ibility are leading to a more modular
approach for both printing and finish-
ing. This can mean hybrid printing and
can also mean off-line finishing.
One example of longer digital runs
and hybrid printing is the Share a Coca-
Cola campaign, which was launched
across Europe in May and was designed
to help Coca-Cola engage directly with
consumers. It substitutes the iconic
Coca-Cola logo on bottles of Coca-
Cola, Coca-Cola light, and Coca-Cola
Zero with 150 of the most popular first
names, nicknames, and terms of affec-
tion in each country.
The project combined conventional

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 printing technology with HP Indigo digital printing to few hundred per week using a Xante press.
create 800 million high-quality personalized labels on 12 As noted, inkjet label volume is smaller than EP, but is
Indigo WS6000 series presses with eight label converters growing at 57 percent per year. By one count, there were
across Europe. To ensure that the Coca-Cola brand color 39 inkjet players at the last Labelexpo in Brussels. Ink-
was maintained across all machines, HP Indigo formu- jet for labels is virtually all UV, led by EFI Jetrion. While
lated the Coca-Cola Red Ink, which served as the bench- UV offers better image quality than aqueous, food contact
mark for all of the conventional and digital printing for the issues limit the growth of UV, and provide an impetus for
Share a Coca-Cola campaign. aqueous inkjet. Xerox Impika uses piezo-electric print-
Xeikon offers a range of dry toner-based label presses heads with dye or pigment water-based inks, while Epson
with entry-level as well as higher capacity models. Michael offers its Micro Piezo inkjet technology aqueous inkjet
Ring, Xeikon America president, reiterates that the driver with water-based pigment inks. Epson handles standard
for digital is the “massive proliferation of SKUs.” While a ps label substrates including gloss and matte paper stocks,
standard flexo label press is 13 inches wide, the 20.3 inch plus films such as BOPP and PET.
Xeikon presses offer improved productivity and flexibility.
Ring explains that Xeikon presses are “designed to meet Conclusion
the focused needs of the converter. The productivity of our In the world of packaging, labels lead in the adoption of
presses yields greater profitability for the converter.” digital with rapid growth in both electrophotography and
For even smaller runs, there are low-cost, high-quality inkjet. While the main force behind this is the proliferation
presses available. One example is the Xante Excelagraphix of SKUs, driven by the brands, there are many other factors
L850 Digital Narrow Web Press. “This system features the that are enabling this growth. Dochstader highlights what
revolutionary Memjet Printhead Technology™ that deliv- may be the biggest factor of all: “The narrow web label
ers high print speeds while increasing overall shop produc- industry is phenomenal at efficiently and adeptly shifting
tion and profits,” says Mark Swanzy, Xante COO. “More to meet the changing needs. The industry is nimble–driven
and more small end users are producing their own labels. by problem solving entrepreneurs.”
Customers are both brand owners and printers.” Swanzy About the author—Jack Miller is principal consultant
described one customer that produces sinks. The label is at Market-Intell, a supplier of strategic consulting and
8.5 inches wide and 27 inches long, and it produces only a market intelligence in paper, print, and packaging. n

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