One major trend in the label market is a growing overlap with other specialties such as tags, tickets, decals, forms, wrappers and folding cartons. A sizeable number of forms manufacturers now produce labels combined with or integrated into forms. In some applications, labels even have replaced conventional forms. The same types of flexographic presses used for most pressure-sensitive labels also can produce tags, tickets and decals. Some of the latest label press models, which use individual printing and processing station servomotor drives instead of conventional press driveshafts, can print materials ranging from unsupported films to folding carton board. These presses give label manufacturers access to sizeable business with flexible cartons and other packaging. The technology-driven convergence of labels with several other printing specialties creates new opportunities for manufacturers and distributors.
Some types of labels, such as high-volume thermal labels for industrial applications and common utility and office labels, are commodities. Competition has dropped prices, and the ability to add value through faster delivery or higher quality is limited because so many vendors provide these. Fortunately, rapid advances in label materials, production methods and equipment evident at the recent Labelexpo Americas 2002 event should allow innovative manufacturers and distributors to create new products and identify new applications that can yield competitive advantages.
Independents are Important
Forms industry participants, including independents, constitute one of the largest distribution channels in the label market. Several direct-selling forms manufacturers are among the top 10 label producers in the United States. In 2001, labels and related products represented 16.5 percent of all forms industry product shipments at end user prices. Because labels, decals, tags, tickets, wrappers and some folding cartons are produced on the same or similar equipment, these products are combined in DMIA's Formtrac 2002 forms industry sales estimates. Sales reached $790 million by the directs and $1.49 billion by independents in 2001, including distributors' value-added services. Pressure-sensitive labels accounted for nearly 70 percent of these estimates.
Labels and other products manufactured on label presses are more than just a significant part of traditional forms manufacturer sales--they're important growth products that can replace volume erosion in conventional forms. Forms plants always have been product innovators based on their knowledge of business processes. These skills have been applied successfully to products that combine forms with labels and cards, and can be transferred to many other types of promotional, product labeling and packaging applications.
Forms manufacturers can strengthen their competitive positions and options to solve customer problems by closely following new developments in label technology. Early knowledge about advances in production equipment and materials help plants bring customers innovative solutions that precede widespread introductions of new products and intense price competition.
Adapting Label Presses to Applications
Applications define the three main segments of the label market: primary product identification labels; secondary product labels for tracking, promotional or retail requirements; and utility labels for general office use, notices, warnings, item identification and control, and more. Forms suppliers have focused mainly on secondary product labels and utility labels, where knowledge of general business systems and bar coding can be an advantage. Advances in label stocks, inks, adhesives and production methods are creating new options distributors can offer to customers to increase label value and sales. These advances also can be used to seek new business in primary product labels for moderate-volume applications in which pressure-sensitive products tend to dominate. As more manufacturers add label presses that also can print on films and folding carton board, distributors will have a greater choice of vendors who can support increased label sales and short to medium runs of packaging products. The challenge for distributors is to learn as early as possible about new label and related technologies.
Primarily because run sizes are decreasing, label production equipment is adapting for faster ink changing, plate cylinders, anilox rolls and dies. Improved plates and press registration systems also reduce setup time and waste. On several intermittent-feed short run label presses, print repeat changes can be accomplished simply by altering web movement without the need to replace printing and die cutting cylinders. With the latest plates, anilox rolls and web-tension controls, flexographic presses can approach or even match offset print quality. The Hexachrome color system developed by PANTONE® for printing a wider color gamut with six process color inks (CMYK plus orange and green) has been adapted to flexographic presses. An increasingly popular addition to label presses is a rotary screen printing station that can apply very heavy ink coverage, scratch-off and other special coatings; metallic inks that imitate foil stamping; and white opaque base for printing on transparent films. Rotary screen units and inks can create various special effects such as raised images, printing that's visible in the dark, label sections that change color with temperature changes, and removable coating over personal ID numbers or other sensitive information. Some of these screenprinting capabilities are used to add various security features to labels, tickets and cards.
Innovations That Will Gain Steam
Label use is increasing in applications requiring document safety features. Manufacturers can add holograms to labels on a label press or off-line applicator at relatively moderate costs. Holograms are a type of diffractive optically variable image device (DOVID) used to create eye-catching promotional or novelty labels. Distinctive labels also can be created with hot foil stamping and embossing, typically done on a label press. New materials have led to labels that change colors when products reach the end of their shelf lives, become exposed to temperatures above or below a selected range, or contact specific chemicals. It's now possible to produce ID labels, tags or documents that change color after a predetermined period of valid use. Another development for selected applications is linerless labels, typically coated and printed on a modified label press. The attractiveness of eliminating the label liner material is offset by the need for special label dispensers or applicators, so linerless labels have remained niche products.
A major label market trend is the growing use of synthetic label materials, such as polyethylene, polypropylene, polyester and metallized polyester films. Clear films with clear acrylic pressure-sensitive adhesives are desirable because they create a "no-label" look. The consumption of printed films also is growing for stretch and heat-shrink sleeve labels, which make attractive and low-cost tamper-evident seals. Clear films typically receive a white base coating in areas that will be printed with common ink types. To avoid film distortion, webs normally are wrapped around chilled cylinders under dryers or UV curing lamps. The demand for various types of film labels has led to advances in label press design to provide the web control needed for printing, drying and processing both supported (with a liner) and unsupported plastic film materials. A secondary benefit is that some new label press models also can be used to print and process heavy tag and folding carton materials. The film materials offer new choices for moisture-resistant utility labels, promotional products and "invisible" labels for common office applications.
Labels with visible or hidden bar codes have served as important carriers of machine-readable data for a variety of ID and tracking uses. Two-dimensional bar codes, glyphs and other methods of printing codes for recognition by scanners have increased the volume of data labels can carry. Many label plants have digital printing stations on their presses or use off-line printers for label encoding. The demand for bar coded labels is growing as more businesses and organizations automate the tracking of everything they own, move, store and handle. The next trend in ID and tracking probably will be development of radio frequency labels, tags and cards for more sophisticated control systems and as replacements for some bar coded labels. Radio frequency identification (RFID) is available already, but the range of applications is limited by the relatively high cost of "smart" labels and tags with transponders and antennas. Demand for these items will grow, and costs will decline. Several label manufacturers have installed or are considering installing equipment for making RFID labels and tags. The products have major advantages because each label or tag can be programmed, updated, read without visual access, or used to locate specific items within bins and other storage areas.
Ivars Sarkans is president of Los Angeles consulting firm Sarkans & Associates. Email him at isarkans@sarkans.com.
