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Food Labeling



Consumer convenience is driving major changes in the food packaging industry.



Published July 20, 2005
Related Searches: Food labeling Label industry Label converter Label printing
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In February of this year, Campbell Soup Company announced a major expansion of their “Soup at Hand” line. Instead of housing soup in a metal can, these soups come in a sippable, single serve plastic bowl. A main selling point: the bowl is microwaveable.

“We intend to make the ‘C’ in Campbell synonymous with convenience,” says Douglas R. Conant, president and CEO. “Over the last 18 months, we’ve been aggressively developing a comprehensive innovation program in soup. We’re now ready to launch our first wave, targeted at convenience.”

Convenience is a buzz word around the food industry these days. As lifestyles change, so do eating trends. It is these trends that are driving changes in food labeling and packaging. Campbell Soup Company is not the first company, nor the last, to revamp its packaging in an effort to keep up with changing lifestyles.

“I think convenience is a huge factor and is going to continue to grow for the consumer. Price becomes a tertiary decision. People are willing to pay for convenience in their packaging as well,” says Bob Nowak, national sales manager for Aladdin Label, located in Waukesha, WI. “It’s worth it for them.”

As in the case of Campbell’s soup, the demand for convenience is one reason for an increase in plastic containers over metal cans and glass jars.

This trend has been documented in a recent study by The Freedonia Group, titled “Food Containers to 2005.” According to the study, plastic food containers are forecasted to grow at a rate of 5.5 percent a year in the United States through the year 2005. Meanwhile, metal containers will experience only lackluster growth and glass containers will see slight decline.

“Glass food packaging has really had a downfall over the last five, six, seven, eight years, and all of those labels I would assume tend to be run on the narrow web,” says Dan Muenzer, marketing director for Spear in Mason, OH. “It’s a market that has either gone plastic or has gone flexible.”

Plastic containers are popping up in unlikely markets, including the alcoholic beverage industry. These are welcome changes for PS adhesive narrow web converters. “When you consider the beverage industry, and beer labeling specifically, there are still a lot of glue applied labels used in that area. I think with the change in plastic containers, we will probably see more of a trend toward PS labels replacing glue applied labels,” says Joe Mausar, marketing and sales manager for Chemsultants International Network located in Mentor, OH.


Flexible packaging
Another major food packaging trend emerging is the increased demand for flexible packaging. In a study by Freedonia titled “Pouches to 2006,” it is projected that pouch demand in US food and beverage markets will grow at 6.9 percent a year through 2006. Demand for stand-up pouches overall is estimated to grow at 16.6 percent, and snack and processed foods will be among the fastest growing end user markets.

Other industry researchers are taking note of the trend as well. “Food packaging specifically continues to grow with particular emphasis on the flexible packaging side, where the highest growth is. My particular interest here is that flexible packaging, in the food segment, is displacing traditional labeled containers,” says Corey Reardon, principal for AWA Alexander Watson Associates in Amsterdam, The Netherlands.

The rise in flexible packaging is taking market share away from labels. This can be good or bad news for narrow web converters, depending on their capabilities.

“It probably has a negative affect on a lot of narrow web converters because they’ve got (label printing) equipment, they’ve built their operations around equipment that prints just labels, and it does take some fairly specialized equipment to print and handle the materials that are used in these packages,” says Ed Dedman, market development manager for SICPA North America in Brooklyn Park, MN. “It just excludes a lot of the converters that are out there in the narrow web industry right now.”

The food industry is experiencing a growth in flexible packaging. Above, a flexible package printed by Prairie State Group.
Flexible packaging is traditionally a market dominated by wide web, but there are some narrow web converters who are adapting by increasing capabilities. “We’ve had clients in the last four or five years that have moved away from printed labels to printed packaging and we started to make the move four years ago,” says Dan Doherty, vice president of operations for Prairie State Group located in Franklin Park, IL. The company has two operations, one devoted to labels and another, to flexible packaging.

“We are starting to see a lot more narrow web converters looking to do more than just labels on their presses,” says John Kalkowski, marketing manager for Sun Chemical Inc. (GPI) in Northlake, IL. “It’s been happening over the last several years and the one thing that’s giving rise to this is the development of combination presses.” Kalkowski says he sees increased production of pouches and shrink sleeves.

Besides pouches, shrink sleeve labels are technically under the umbrella of flexible packaging as well. This is another growth area in the food market.

“The biggest change I see is shrink packaging. Shrink packaging is a different market. It addresses a younger crowd of buyers, the graphics are quite brilliant, and it’s reverse printed so it’s glossy,” says Bruce Riddell, vice president of technical development for Spectrum Label in Hayward, CA, and technical chairman for the Tag and Label Manufacturers Institute.

The rise in flexible packaging should be a wake up call for converters. “They need to be in conversation with their customers to determine now which direction their customers are going to be taking. Are they going to continue labeling rigid containers or are they going to be moving to flexible packages? Depending on that answer, the printers need to be thinking about what they are going to be doing to either modify or replace their equipment to be able to handle that demand,” says Dedman.


Other Industry Changes
The rise of flexible packaging and of plastic convenience containers are two widespread trends within the food industry that are affecting its labels. Also affecting label manufacturing are the increase of SKUs in the business and consolidation of food manufacturing companies.

“Markets have matured for some of the big users of labels and packaging, so now to compete with some of the new, younger corporations they are trying to diversify their product line,” says Riddell. There are a number of companies who have taken a flagship product and diversified it into several different flavor variations.

“There’s been a tremendous explosion of SKUs. More and more people are looking for unique-type products, ethnic foods and variations of themes,” says Bob Nowak of Aladdin Label.

The volume of labels may stay the same, but the multiple designs create a need for short runs. This trend provides the perfect opportunity for narrow web converters to gain market share away from wide web counterparts. From a cost standpoint, narrow web machinery is better suited for short runs.

“Unless the majority of your SKUs are the same quantity over and over again, it’s not cost effective to run them wide web. Set-up times, changeovers and waste factors tend to be more cost prohibitive in the wide web sector when running smaller quantities with lots of SKUs,” says Paul Myers, president of Valley Forge Tape and Label Inc. in Exton, PA.

While a trend toward short runs is positive news for those in the narrow web industry, a concern for all printers is ongoing consolidation within the food industry. “Relationships you have or histories you have with certain companies can change overnight. It’s an ever changing industry. I wouldn’t say they are coming and going, I’d say they are more going. There tends to be fewer and fewer large players,” says Muenzer.

“The major change that we have seen is consolidation. As with other industries, the big fish are eating the little fish to survive. It’s difficult for the small to medium size narrow web converter to maintain their established local accounts when they’re bought out by a national chain,” says Myers.


Label Design Trends
The faces of labels are continually evolving. Some changes are a necessary outcome of food industry changes. Others are driven by the end user’s need to make their products stand out and to keep consumers buying.

Food label sample from Valley Forge Tape
and Label
Converters agree that there is increased interest in coupons. “We’re seeing an increase in demand of IRCs, instant redeemable coupons. We’re also seeing a greater demand for what we would term a multi-panel type of label where there’s additional information,” says Ann Marie Phaneuf, director of marketing for Weber Marking Systems Inc., located in Arlington Heights, IL.

The bulk of coupons are placed on the exterior package for instant redemption at the checkout lane, but coupons are also appearing other places. One converting company, Aladdin Label, has developed an in-pack construction called Lustorite. Approved for direct food contact, Lustorite is frequently used for coupon applications, among other uses, and can be placed inside the package or container.

Introduced in the early 1990s, Lustorite was not quick to take off. The main challenge? “To overcome the shyness, if you will, of putting an unwrapped piece in direct food contact,” says Nowak. Recently, attitudes about the product have changed. “It’s been growing for the last three years pretty substantially,” he says.

Food labels have also been borrowing looks from the beauty and personal care aisle. Converters are reporting an increased interest among end users for the no-label look, bolder graphics and foil stamping.

“They’re all the same trends as in the past but even more so. More colors, higher quality graphics. It’s all about shelf appeal,” says Myers. “Pretty soon all these food products will look the same again — they’ll all be printed on holographic materials with an instant redeemable coupon slapped on the side.”

Cost still places limits on how complex labels can become, especially considering the low margins found in the food industry. Sometimes a company will introduce the product with an eye-catching, expensive label. Then, “they are quickly looking to scale it down once they make their mark,” says Doherty.


Regulations
May 8, 1994, marked a significant milestone in food labeling as the Nutrition Labeling and Education Act took effect. From that day forward, the Food and Drug Administration required that food labels include nutritional information. With such drastic changes to the label, 1994 proved to be a good year for label manufacturers.

“There was a lot of prepress work going on that year because every label that was previously done had to be redone,” says Doherty of Prairie State Group. “It was great for the label industry.”

Changes in label content continue to be enforced and this has generated business for label converters. “The regulations continually change and that means new artwork has to be made for items that are actually mature items,” says Riddell of Spectrum Label.

That said, regulations are a mixed blessing for label converters. The FDA regulates much of what is written on labels. From health claims to size of type to food classifications, the regulations can be cumbersome.

Besides regulations on the content of labels, there are also regulations on the materials used to construct labels, such as the inks, coatings and adhesives.

For example, there are three main regulations governing the manufacture of inks. “There are several routes toward FDA compliance: GRAS, threshold of regulation, and food contact notification,” says Kalkowski of Sun Chemical Inc.

GRAS refers to the Generally Regarded As Safe list that outlines appropriate ingredients that can be used. Threshold of regulation states that “the material migrating to the food must not be a known carcinogen and the dietary concentration is less than 0.5 parts per billion or is less than one percent of the dietary intake,” Kalkowski says. Food contact notification allows suppliers to contact the FDA concerning ingredient approval in a specific application.

The web of regulations can be confusing for converters to navigate. “A lot of the regulations our customers encounter unfortunately are somewhat vague. The government doesn’t seem to do a real good job of being specific about what’s allowable and what’s not,” says Dedman. “They tend to speak in generalities.”

The rules can be confusing and many converters choose not to enter the regulation quagmire. “We work with the legal departments of our customers,” says Muenzer.|

On pack coupons, also known as instant redeemable coupons, are a trend in food labels. Above, a coupon printed by Aladdin Label Inc.

While that may be so, familiarity with regulations is still important for converters. “They do need to be familiar with the FDA regulations so that they can be conversant with their end use customers. They need to understand the requirements and they additionally need to work closely with their label base material suppliers. It really is a matter of understanding and communication,” says Mausar of Chemsultants International Network.

The consequences of using an unapproved substance are varied. “The biggest problem would be potential contamination of the food. If you are using inappropriate materials, components can migrate,” says Jim Wittig, vice president of Rad-Cure Corp. in Fairfield, NJ. “If the inks or coatings do migrate and affect the taste or odor of the packaged product, a recall of the product could be the worse case scenario.”

“The last thing you want to do is to have a product failure out on the field,” says Tom Rolando, program manager for the flexible packaging, adhesives and coatings group at H.B. Fuller in St. Paul, MN. “Somebody’s going to pull that product from the shelf and expect to be paid for it.”


Future of food labeling
AWA Alexander Watson Associates estimates that the food industry is the largest end user market for global packaging, currently valued at $145 billion. Food packaging is a large and growing industry, but it is experiencing a number of shifts. Some of these shifts are good for narrow web converters, others require adaptation.

“You’ve seen glass replaced by plastic. You’ve seen plastic replaced by flexible. Who knows what the next major container shift is going to be. You have to be aware that it is constantly changing,” says Muenzer.

While changes are a given, the good news is that it’s a market that cannot disappear. Says Doherty, “It’s a great area to be in for long term security. It may change its look, but it will always be there.”


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