So much of product marketing and promotion involves getting a consumer to simply want a product – to believe that they need it. Food is a sweet spot for manufacturers and converters alike, in that is manages to be both: a desire and a necessity.
Despite the sometimes burdensome regulations implemented by the U.S. Food and Drug Administration (FDA) regarding substrates, inks, varnishes and adhesives on labels with both direct and indirect contact with food, this branch of the industry is one of the few that is practically recession-proof.
According to the November 2011 TLMI Index and Trend Report compiled by L.P.C. Incorporated, the outlook for food production is positive. In fact, they predict a 2.3 percent increase in food production in 2012 over 2011. The report states: “Demand for food packaging products and supplies is expected to rise by mid-2012 as food production regains a sustainable rising trend. Be prepared for increases in activity.” Beyond that, the report states that strengthening economies in the US and across the world will contribute to an overall increase in food production throughout 2012.
One reason for this growth could be attributed to the proliferation of food product segmentation. Years ago, if you wanted a soda, you had a soda. Today, you have a choice between regular, diet, caffeine-free, diet caffeine-free, a variety of flavors – the list goes on. This is all certainly good news for a converter, though it does present some challenges.
Tim McDonough, president of Flexo-Graphics in Butler, WI, USA, says that segmentation gives converters a reason to take a good look at their equipment.
“The proliferation of SKUs brings up the digital versus flexo debate,” he says. “If there are common color plates and you are switching out a copy plate numerous times, it may be more beneficial to run jobs via digital printing if the quantities are small enough. Either way, a good front end system for managing multiple SKUs is a must. This needs to happen both in prepress and in the ERP system.”
Greg Jackson, president of Columbine Label in Centennial, OH, USA, says about 45 percent of his business is food-related. He also says that an increase in food label work can be an argument for a converter to go digital, though, he says, “the added consequences are gaining jobs that may have not been appropriate or cost effective before. And with the added efficiencies, there’s no longer bottlenecking overall plant production with these types of jobs.”
In the pre-digital era, Jackson says, segmentation could be a make-or-break proposition.
“Depending on the number of copies and plate or color changes associated, it could get very expensive and possibly not competitive, and tie up significant press time, thus impacting the lead time throughout the entire shop,” he says.
Innovative Labeling Solutions in Hamilton, OH, USA, prints its food labels with HP Indigo machinery, and Kathy Popovich, director of marketing, emphasizes that digital print technology is a significant advantage in successful food label printing.
“For ILS, product segments that have many SKUs, otherwise known as ‘SKU proliferation,’ are ideal for a digital print program,” she says. “The impact on print production is minimal – other than file management, which is handled easily in a digital workflow – but the benefit to the food manufacturer is immense, allowing for unique iconic graphics for each SKU, whether that be photos or designs that reflect the personality of the flavor.”
“Many people in the industry don’t realize this,” she says, “but our HP Indigo press can print as many SKUs as possible that will fit in the print frame. Technically, each label can be unique. As long as the label size is the same, the press doesn’t care what it is printing. This further allows food companies to easily offer seasonal, regional and retailer-specific programs.”
Though we know that a strengthening economy will result in an increase in consumer spending, particularly on food, consumers have largely been concerned with savings the last few years. According to a 2008 report by the Promotion Marketing Association’s Coupon Council, 97 percent of American shoppers reported using coupons at supermarkets. Furthermore, the report states that more than $350 billion of packaged goods coupons are offered annually. In other words, people really like coupons.
Kieron Delahunt, owner of Axiom Label Group in Compton, CA, USA, has seen the effects of this firsthand. “Promotion in the food market is on the rise. We are consistently seeing more food manufacturers look to us for our expertise in two main constructions: dry release and multi-panel promotional labels,” he says. “The instant redeemable coupon (IRC) has become very popular in recent years. This construction is a dry release label with a discount printed on the back of the label, which is redeemable at the counter.
Food labels printed by Axiom Label Group
“The second one is the three-panel accordion Axiom Label Promo-Pack. This is usually a ‘cents off’ promotion that is applied to the lid of a container where the extra, internal panels contain recipes and additional product information,” Delahunt says. “Both are very popular promotional labeling applications among food manufacturers as they have proven to be successful in promoting customer enthusiasm and purchasing at the store level.”
Andrea Vimercati of Pilot Italia in Milan, Italy, says that the increase in popularity of coupons for consumers has also opened the door for counterfeiters to replicate those coupons. “The use of promotional labels, which, for many years has remained more or less constant, saw a sudden upsurge recently because of the fact that manufacturers want to boost demand,” he says.
“That’s why, alongside the traditional labels that we already supply, we also added, through a collaboration with the Sipca ink manufacturing company, a patented anti-counterfeiting solution for discount coupons,” Vimercati says.
Just like the average consumer, food manufacturers’ budgets were thinned during the recession. And, just like consumers, they needed to save where they could.
“I would say that over the last seven or eight years the level of sensitivity regarding packaging costs has gone up a great deal in all industrial sectors,” adds Vimercati. “The food industry was perhaps the one that was the last to start asking for price reductions, but at the same time, it was just as adamant.”
McDonough, of Flexo-Label Graphics, adds, “Our food customers are no different than our other customers in that they are looking for the best total value for their business. With the recent environment of raw material inflation, it has been difficult for all customers to try to budget for their fiscal year. One trend has been to try to combine multiple labels into one, for the best overall buy wherever possible.”
According to Eric Knop, director of business development at Innovative Labeling Solutions, a digital press can greatly offset costs for manufacturers. “Historically, because of the operating manner of traditional printing presses – plates, rollers, ink mixing, make-ready, etc. – price efficiencies were gained by printing larger volumes, which were based on quarterly forecasts,” he says.
“With digital print, this changes, because the technology uses no plates and can be up and running and changing over from one job to the next in minutes,” Knop says. “This supports the need for food companies, in particular, to be responsive to changing regulations. This also results in better-managed inventories for reduced remnants/obsolescence as well as shrinking their carbon footprint.”
FDA Regulations and Material Choice
The regulations to which Knop refers are, of course, from the FDA. Regulations regarding materials that will have either direct or indirect contact with food can be numerous, but are incredibly important. According to Joe Schlinkert, technical director of Color Resolutions International (CRI) in Fairfield, OH, USA, a lack of regulations or a technical oversight can have costly consequences.
“Recently, 4-methylbenzophenone was found in breakfast cereal in Germany,” he says. “In 2005, millions of liters of infant formula were recalled in four European countries because of the migration of a contaminant linked to ITX (isopropylthioxanthone) which, along with 4-methylbenzophenone, is commonly used as a photoinitiator in a number of UV-curable ink formulations.”
Schlinkert also says that testing for the safety of inks, specifically regarding migration, is of paramount importance. “The testing must be specific to the printing application. Testing under the exact production parameters (temperature, humidity, press speed, etc.) is critical, as inks will typically respond differently depending on the substrate and printing conditions,” he says.
The FDA regulates nutrition labels and
ingredient listings on food.
“Migration tests must also simulate storage conditions as well as the conditions under which consumers prepare the food. Different testing methods will be used for a package that undergoes a cooking cycle versus one that does not.
“For a migration test to be successful, cooperation must occur not only between the ink supplier and the converter, but also between the ink supplier and the manufacturer of the ink components. Cooperation between the latter two is typically accomplished via a third party testing lab. The primary reason for enlisting a third party is twofold: to identify all the chemical components that go into the ink, thereby validating the analytical test method, and to ensure that all possible migration issues are understood and quantified to meet FDA regulations,” Schlinkert says.
Kevin Facklam, director of regulatory affairs for INX International Ink Co. in Schaumburg, IL, USA, echoes the sentiment of cooperation expressed by Schlinkert. “The FDA is the simple part. Either the FDA regulates the ink because it is in intimate contact with the food or is reasonably expected to come into contact with the food, or it does not because there is an effective functional barrier in place,” he says.
“The challenge is ensuring continuity and understanding among the brand owner, the printer or converter, INX as the ink supplier and the raw materials suppliers. In order to ensure the proper product is provided to the printer and customer, it requires communication up and down the supply chain. Food-safe inks have a premium cost because of the raw material chemistry selected and the manufacturing and verification process controls that are required throughout the supply chain.”
Delahunt, of Axiom Label Group, says that even for a company that typically doesn’t make labels categorized as having direct food contact, FDA regulations are a factor. “Regulations do affect artwork considerations such as point size on ingredient listings for markets we service, such as bakery, prepared dressings and sauces,” he says.
According to Knop, digital printing offers benefits over other printing methods that can be readily seen when FDA regulations regarding direct and indirect food contact come into play. “One of the reasons we believe so wholeheartedly that digital print is the future of label and package printing is because it offers so many clear advantages over conventional print. If you look at regulatory requirements alone, you see how imperative it is for consumer product companies to re-think the way they buy labels and packaging.”
While FDA regulations can quickly become the bane of any US converter’s existence, they can become useful guidelines for the international converting community. “FDA regulations proved to be extremely useful when choosing low migration adhesives or paper that is particularly neutral with a low mineral content,” says Vimercati of Pilot Italia. “European and Italian regulations, in particular, had no ruling on the matter, so they helped us to choose the best paper and ink adhesive composition.”
Adhesives, like inks, must not only be food-safe, but must be able to withstand the heat and cold associated with many food products. For that reason, they are another area of particular importance to converters.
Al Kuhl, technical service manager for MACtac Printing Products in Stow, OH, USA, says that his company offers a wide variety of adhesive options to meet many food label requirements. “MACtac offers a full line of products for food and beverage labeling applications,” he says. “Any of our general adhesives on any facestock meet the requirements for indirect food contact applications. MACtac 711 adhesive meets FDA regulation 21CFR175.125 A and B for direct food contact applications and can be found on facestocks such as prime paper, prime film, thermal transfer and direct thermal stocks. MACtac Glacier 733 freezer grade adhesive works well for wet, cold packaging applications. MACtac MP238 adhesive on prime film facestocks will withstand the pasteurization process necessary for juice and beverage labeling.”
With an increase in food allergies and intolerances, the FDA has stepped up regulations in recent years regarding ingredients. So, how might that affect an adhesive supplier?
“Because of these requirements,” Kuhl says, “we are seeing companies printing on labels instead of directly on the package in order to fit the additional information. In recent years, we have also seen more point-of-purchase coupon labels being printed and affixed to food packaging.
“More foods are being flash frozen, which has increased the need for a label and adhesive that can withstand that process which is why we have seen an increased demand for our Glacier 733 product. With the increased sales of single-serve containers that can be cooked in a microwave, there has also been an increased demand for a label that can go from the freezer or refrigerator to the microwave and stay on the package.”
As food manufacturers continue to create new products to meet the demands of an increasingly time-crunched and hungry world, the label industry will continue to create products and materials to suit their needs.
“Food will continue to be the fastest-growing and most competitive and diverse label market segment,” says Axiom’s Delahunt. “To succeed, you need to have a diverse press complement of digital and flexographic capabilities, combined with the ability to turn and burn.”
According to Jackson at Columbine Label, the continued success of food labeling is very practical. He says, “You could label the shelf, but how would you know what the product is once it’s in your shopping cart?”
It’s rare to find a product that people not only require, but enjoy. For converters in the food label industry, this segment offers steady work, but not without challenges.
By Catherine Diamond
Published January 18, 2012