Connect with every consumer: label talk7 September 2018
Labels are the front line for communication between brands and consumers. As customers are increasingly being driven by transparency of the content and heritage of their purchases, the responsibility of labels becomes greater. Jules Lejeune, managing director at FINAT, and Garçon Wines’ business development executive, Amelia Dales, tell Emma-Jane Batey about how innovation, legislation and company aspirations are impacting the labelling market.
Labels work hard to convey information while looking relatively innocuous. Beyond the right design for a brand – which can take months of conceptualising and tweaking – the principle job of a label is to inform while adhering to changing legislation and the packaging’s shape itself. These elements are as crucial to the success of a product as its design – even though the consumer may not realise it.
Brand-owners, however, have to be aware of this. Take Garçon Wines’ award-winning, post-box friendly flat recycled polyethylene terephthalate (rPET) bottle and its labels, which uphold the company’s image.
“Many people, whether at home or in a bar, enjoy their wine chilled in ice buckets. When selecting our adhesive labels, we need to ensure that when our bottles are submerged in an ice bucket, they don’t slide off after getting wet,” says Amelia Dales, business development executive at the company.
Working closely with its packaging manufacturer, Garçon Wines uses a material created specifically for rPET wine bottles that stays in place when wet. It also allows a range of inks, finishes, varnishes and coatings to be printed, catering to a wide variety of different designs.
“There is an emotional connection to consider when creating packaging,” Dales adds. “We designed our flat wine bottles by taking a cross-section of a round Bordeaux glass bottle, in order to respect tradition and create something visually appealing. Our classic label collection includes images of innovations from around the world to reflect our redesign of round glass bottles into spatially efficient, flat bottles. The label details the type of wine, tasting notes and heritage. Also included is functional information, such as supplier or importer details, alcohol percentage, the volume of liquid – which must be displayed in a specific font size – allergy advice, recycling codes and responsibledrinking recommendations.”
– Amelia Dales
Dales notes that there is an effective way to ensure label information complies with the latest legislation. “We then use a free government service to confirm the information is displayed correctly and is in line with current UK alcohol laws,” she explains. “We want our wine bottles to be aesthetically pleasing and to catch consumers’ imaginations, but they also need to recognise and understand the product they’re purchasing.”
As the managing director of FINAT, a European association that is dedicated to ‘linking the label community’, Jules Lejeune is clear that global labelling trends and innovations are growing “from a position of strength”.
To him, “The labels sector is continuously widening its scope, with the total consumption of selfadhesive label materials in Europe amounting to 7.45 million square metres in 2017, corresponding with a growth rate of 4.7% [from 2016]. While this figure indicates a mild slowdown in the industry’s dynamic track record over the decade so far, growth was mainly driven by the continued evolution of Eastern European markets and the growing demand for highend applications underlining the exponential growth of sophisticated label substrates, like white-coated papers (up 24% since 2010), direct thermal papers (up 51%) and especially polypropylene (PP) (up 78%).”
Lejeune states that the European label industry continues to be dynamic in its development, and says, “Looking at the geographic distribution of growth in label stock demand, the established markets of Germany, UK, Italy, France and Spain still account for 58% of the total European market size, but large emerging countries – like Poland and Turkey – are catching up and are expected to challenge the top five over the next few years.”
The development of emerging economies
However, there are some striking disparities when comparing materials demand in consumption per capita. “While the European average of 9.7m² is approaching the 10m² benchmark, the ‘standard deviation’ around this average is still huge,” Lejeune confirms. “While the top three – Denmark, Lithuania and the Netherlands (all small, export-oriented countries) – record a consumption per capita of almost 17.5m², the bottom ten countries still count a consumption per capita of less than 5m². Among these ten, we find ‘sleeping giants’ like Romania, Russia and Turkey, between them representing almost 250 million inhabitants – or a fifth of the total population in the countries under review. This indicates that, even with general economic prospects indicating a cyclic slowdown, there is still a huge potential for structural growth over the years to come.”
Lejeune continues by explaining more about this possibility. “This growth potential is not even taking the continuously widening scope of the labels sector into account for the domain of short-term flexible packaging, as companies are looking to offer adjacent solutions manufactured from the industry’s sophisticated installed machine base,” he says. “Although paper-based materials continue to dominate label materials demand, this has been shifting from basic-primary and variable information print (VIP) label applications towards more sophisticated, high-end ones.
“The continued growth in demand for packaged consumer goods, especially in emerging economies, has increased the need for white-coated materials, as end users are looking to differentiate their branded products on the shelf. Labels containing variable product data in sectors, like retail, logistics, process automation and inventory management, demand an ever-growing volume of direct thermal papers. But above all, the need for high-quality – transparent – product decoration in high-speed, high-volume sectors – like food, health and beauty care, and premium beverages – is driving the surge in the consumption of PP-based labels.”
When questioned about key trends – including industry 4.0 and its impact on labels and labelling – Lejeune says, “I remain convinced that the internet has brought new meaning to production and data exchange across the whole world of label and packaging print.” He adds, “They have brought together, in a global forum, the label designer, brand-owner, label converter and consumables suppliers to achieve – exceptionally quickly – the excellent results that the whole value chain requires.
“In an age when short print runs, multiversioning and just-in -time delivery are in high demand, industry 4.0 has certainly changed the label- printing industry. As well as bringing a new immediacy and greater computer-based skills to its day-to-day operations, it is also demanding new and different levels of professionalism and supply chain cross-fertilisation to achieve the desired end results.”
Lejeune is equally optimistic when discussing his thoughts on balancing concerns and expectations for the label industry and seminal developments.
“In the hyperactive packaging print arena, labels will keep driving the formation of best features, such as product identification data, the increasing tranche of EU regulatory information, product authentication and security devices, as well as ensuring that they fulfil the primary purpose of delivering brand identity, brand experience and adding value for the consumer.” He believes, “This could be through personalisation, tactile and colour-changing features or devices, such as QR codes and other intelligent features like augmented reality, designed to connect products with the consumer via the web. Making all of these adjustments and products puts increased demands on the supply chain, but the challenges are being met and exceeded.”
– Jules Lejeune
“It is increasingly true that the definition of a label has broadened beyond self-adhesive and wet-glue labels to include sleeve labels, flexible packaging, in-mould labels and directto- container print, all of which may increasingly feature in label converters’ portfolios,” Lejeune explains.
“The established European labelsupply platform is also expected to broaden,” he adds. “We expect sustainability and waste management to be headline topics in the packaging supply chain, and to be the prime concern of FINAT, TLMI [Tag and Label Manufacturers Institute] and our sister associations around the world in 2018. We are involved in increasingly formalising the relationship between label converters, co-packers and brand-owners to establish a structured release liner collection and recycling system, as around 70% of the brandowners FINAT recently surveyed indicated they are not currently recycling any of their liner waste.”
Last year, exercises performed by FINAT’s statistical agency, Panteia, indicated that there is a significant statistical correlation between roll-label stock demand and the European economic climate. This is not surprising, since upticks in the label market are closely aligned with business performance across a wide variety of sectors. Over the past 15 years, the EU-28 countries have shown consistent quarterly growth in label stock demand.
Given the uncertainties presented by Brexit, escalating trade wars between the continent and the US, trade sanctions against Russia and, finally, re-emerging concerns about the euro following the installation of the new Italian Government this year, it should come as no surprise that the gap between annual growth rates in the label industry and GDP has been shrinking in recent years.
It is part of this potential growth that Lejeune describes as the “widening scope” of the labels sector. His understanding that the label business is reaching into the domain of short-term flexible packaging comes from the knowledge that companies are looking at new ways to offer additional solutions using existing machinery. Just like the rising number of self-adhesive label producers that are offering complementary solutions, such as pouches, sleeves and other flexible packaging, labels face mounting pressure to provide a unique shelf presence.
The flexibility of labels is endless: engagement through digital and visual content works alongside the look and feel of the label itself, preventing a company from investing in packaging.
Indeed, the adoption of clever labelling can give a new lease of life to classic packaging, ticking the heritage box as well as meeting the increasing demand for differentiation.