If this column frequently reports on wine labeling it is not because the product interests your correspondent (although it does). Wine labels are very big business in Europe, which produces 20 billion bottles of the stuff (or 60% of total world consumption) every year. It is a sector where pressure sensitive labels have been gaining ground steadily at the expense of the more traditional wet-glue technology. For some reason bag-in-box packaging for wine has not caught on in Europe’s main markets. Research at your correspondent’s local supermarket revealed that of around 500 linear feet of shelving devoted to wines, only around ten contained the bag-in-box option. Now comes news of a new and potentially challenging idea bubbling up from the think-tanks of Smurfit Kappa, the Irish and international packaging group. The “Pouch-Up” is a 1.5 liter container which (according to the manufacturer) requires little or no secondary packaging, and weighs only 35 grams, or less than one-tenth the weight of a glass bottle – and the pouch doesn’t carry a label! Will the idea appeal to the wine-buying public? It has obvious advantages for the ecologically-minded, with its lower carbon footprint, as well as for those who need to schlepp their groceries up several flights of stairs. A spokesperson for Smurfit Kappa said the wine pouch was popular in Scandinavia and “has grown by 60% in France between 2010 and 2011.” Well, maybe, but the most likely market for wine in pouches is probably the UK, with its large (in both senses) wine-bibbing population and its open-minded approach to new packaging concepts. As for France, informed opinion reckons it will be quite a while before connoisseurs turn the spigot of a pouch to pour themselves a glass of Château Yquem.
An all-purpose label applicator
Few people outside Finland understand the Finnish language. It is, for the record, one of only three non-Indo-European languages still existing in Europe (the other two being Hungarian and Basque). A typical Finnish tongue-twister is Laitilan Wirvoitusjuomatehdas Oy, now the country’s second biggest bottler of beverages, including beer, cider, lemonade and juices.
One of Laitilan’s specialties is packing short run beers for the country’s microbreweries, but the wide variety of beverage labels was proving too much for the company’s aging wet-labeling equipment. Laitilan’s management saw the advantages of pressure-sensitive roll labels for many, but not all of their products, and for certain multiple-labeling operations they ideally wanted cut-and-stack labels, continuous hotmelt and self-adhesive labels – all on the same bottle. The answer was provided by the German equipment manufacturer Gernep, which installed a compact, low-maintenance applicator able to handle every kind of label needed by Laitilan. Less famous than its market-leading competitor Krones, Gernep is a private family-run business, part of the much-lauded German Mittelstand, which nonetheless has a sales network covering 100 countries.
A challenge to digital?
Waterless offset technology has taken another step forward with the partnership between Esko and Codimag. At an Open House in June the two companies presented the fruit of their joint research which aims to give waterless offset label presses most of the advantages of digital printing while retaining the lower costs of offset for longer runs. Esko’s Equinox prepress software is now perfectly tuned into the waterless Aniflo technology developed by Codimag, and Codimag’s CEO Pascal Duchêne reckons that for any print run over 500 running meters his company’s Aniflo press is a better bet than the current market leader in digital print presses. “On a six-color run” he said, “Our press is faster, and the investment cost of a Codimag Viva Aniflo is competitive with the price of comparable digital label presses. Thanks to our partnership with Esko, we have a digital prepress giving us many of the attributes of the purely digital press, plus the ability to print both short and long runs economically with total standardization of colors, and total repeatability as well. This is what major brand owners nowadays expect label converters to provide.” Many of Codimag’s existing and potential customers attended the event, during which they were invited to run one or more of their own jobs on the new Esko/Codimag configuration. One German customer already owned two Codimag presses of this type and was attending the demo before deciding whether to buy a third.
Russia goes for gold
With half of Europe on holiday and most of the other half watching the London Olympics, Russia’s accession to the World Trade Organization (WTO) has received scant coverage in European media. Russian membership, which came into effect in August of this year, will mean a progressive lowering of import tariffs over a wide range of products. For paper and packaging, Russian customs levies will reduce by 5% over a four-year transition period. The main Western beneficiaries are likely to be Finland and Poland, both of which export both labelstock and printed labels to Russia. This development makes it less likely that any of the major labelstock producers will open a coating plant in Russia, despite the rude good health of the Russian economy, with its five percent GDP growth (just for the record, latest GDP figures for USA are +2.2%, and for the Euro Area zero).
Trade shows: some good news, some not so good
Rude good health seems also to be the right term for the Labelexpo shows, and for the London-based Tarsus Group which runs them. The group reported a 14% like-for-like revenue increase for the 2011 Labelexpo Europe show (the group’s biggest event), despite sluggish economic conditions in most parts of Europe. For Labelexpo Americas 2012, Tarsus is confidently expecting to beat the records for revenue and visitor numbers set at the previous Chicago show in 2010.
Not all exhibition organizers are riding high, however. Drupa 2012 visitors were down 25%, and the worldwide printing and packaging industry is now looking ahead to the Paris Emballage show which will take place in November of this year. “Over 1300 exhibitors” are announced: if this figure is realized it will be slightly up on the previous Emballage, held two years ago, but still down on the 2,200 who exhibited at the 2008 event.
Ipex, the UK-based package and print exhibition is coming up in 2014. So far the signs are not totally positive. HP, which at the last Ipex in 2010 was the biggest exhibitor, has said it will not be taking part. This could be connected with the same company’s recent announcement that it is shedding 27,000 jobs worldwide. It should be added here that HP Indigo, which makes and sells narrow web presses, is one of the bright spots on HP’s report card. It should perhaps also be added that several label press manufacturers will be showing at Ipex 2014, including Durst, Epson, Heidelberg, Landa (no surprise) and Primera, and the show, according to the organizers, is already 70% sold.
French labels without tears
Hot from the horse’s mouth comes the latest report on France’s label converters. A detailed study just completed (by your correspondent, so it must be good) examines the 100 leading French label production plants with their sales and their profitability. A healthy 77% of the sample increased sales in 2011, and almost as many (70%) ended the year with a profit. Labor productivity was also charted for all the plants, and the median sales per employee came out at €160,000 (equivalent to approximately $200,000). Highest sales for an individual plant were registered by Canadian-based CCL, whose Chilly-Mazarin site had sales of €37 million, but only 12 other label plants achieved 2011 sales of over $10 million.
The most remarkable trend on the French market is the continuing concentration, as half-a-dozen groups build up their market share by natural growth and by acquisition. Number one in France, and among the biggest in Europe, is the Autajon Group, whose 2011 French label sales rose by 15% to just short of $150 million (Autajon, also a leader in folding boxes, has plants in France, Germany, Spain, Switzerland, Belgium and USA). Well behind the leader are France’s second and third biggest label groups, CCL and Stratus, but the three together have a 25% share of the French label market.
Another unusual feature of France’s label market is the extent to which label converters are almost entirely French-owned, despite the total freedom of movement of capital between all parts of the European Union. The big exception is CCL, and another is Monroe Etiquettes, a medium-sized converter acquired by Multi-Color Corporation in 2010. But between 80-90% of the top label converting sites in France are still smallish, family-owned, franco-french businesses. Only twelve plants employ more than 100 people.
Corruption in high (and low) places
Official corruption, or the absence of it, is a key factor in deciding where and whether to do business in many countries of Europe. Since official corruption is mostly covert, the Corruption Perception Index published by Transparency International and covering 182 countries is probably the best guide to a country’s relative honesty. Looking on the bright side, the four Scandinavian countries, plus Benelux, Switzerland, Germany, Austria, Britain and Ireland all make it into the top twenty as squeaky clean places to trade or invest. Be slightly more careful if you are planning a business venture in Turkey, the Czech Republic or Hungary, and be even a little more careful if your projects include Romania, Greece or any of the countries of ex-Yugoslavia (except Slovenia, which is reasonably OK). Lowest ratings among European countries are posted for Russia, Ukraine and Belarus (which has not stopped several label press manufacturers from doing good business there). A surprisingly frank report by the NGO Opora Rosii (http://en.opora.ru) estimates that the situation is bad and getting worse: “83% of Russian small and medium companies pay salaries under the table, which is three times as much as in 2008.” To put it in a nutshell, the further South and East you go in Europe, the fewer businesses like and practice transparency.
Outside Europe the countries which honest business folk prefer to avoid include the usual no-hopers like Haiti, Iraq and Burma. In case you are interested, the 182nd place, bottom of the list, is taken by North Korea. Plausible, but one wonders how exactly the poll was conducted. Can you imagine how long a researcher from Transparency International could stand on a street corner in Pyongyang asking passers-by how much they trust their government? Why, you can’t even do that in Paris nowadays without getting some pretty extreme reactions. But at least you don’t get arrested.