Greg Hrinya, Editor03.16.23
TLMI enjoyed a record attendance at its annual Converter Meeting, as nearly 200 industry members convened in St. Petersburg, FL, USA, from March 12-14, 2023. The event featured presentations from some of the industry’s most prominent thought leaders, roundtable discussions, and networking.
Plus, TLMI shared the results of its Management Ratio Study, which provides members with valuable insight on operating practices and financial performance metrics in the label and package printing space. The Ratio Study is touted as one of the key benefits of TLMI membership.
Avery Dennison, Baldwin, Domino, Durst, FLEXcon, Heidelberg Gallus, UPM Raflatac, and Xeikon served as platinum sponsors for the event.
During the event, attendees received valuable information on all the hot trending issues in our industry, from workforce challenges and the supply chain to sustainability initiatives. Corey Reardon, CEO and president of AWA Alexander Watson Associates, and Alan Beaulieu, CEO and president of ITR Economics, delivered up-to-the-minute data that will shape the future direction of labels and packaging.
According to Reardon, the global label market accounts for 72.6 billion square meters, with an 18% share in North America. Pressure sensitive labeling makes up 40% of the global label market, with glue applied registered 35% and shrink sleeves 18%. Of the 13 billion square meters printed in North America, pressure sensitive accounts for 54% volume (and 47% of total units labeled) and 27% for glue-applied.
While the end-use segments vary, food and beverage are still key drivers for North America, with 25% and 33%, respectively. “Regardless of market conditions, people still need to buy food and beverages,” said Reardon. “Maybe it shifts by brand, but in this area it may not be recession proof but it’s certainly recession resistant.”
From a growth standpoint, the North American label market has seen 1.6% growth year over year with a forecast of 2.0% through 2025. Shrink sleeve growth is seeing slightly higher growth than the average label market at 3.0%, with an expected growth rate of 3.6% by 2025.
“We continue to see volatility through Q2,” explained Reardon. “We expect to see stocking levels reach a more normalized pattern of supply and demand in the second half of the year.
“PSL is still one of the fastest growing labeling markets, with a lot of variety and flexibility of materials,” he added. “This continues to be a preferred labeling format for many segments. Food and beverage still dominant. The diversity of PSL in many different applications and categories is one of its strengths. We see growth rates for food and beverage labeling at 1.8% and projected to 2.3% CAGR by 2025.”
Beverages are driving a significant amount of growth in the shrink sleeve market. Beverages account for 53% of shrink sleeves printed, with food comprising 27%.
“Shrink sleeve is one of the fastest growing labeling technologies, but it is growing at a decelerating rate,” noted Reardon. “It will continue to fall in line with PSL, which will be slightly higher than the average label market moving forward.”
Meanwhile, Beaulieu painted a cloudy picture for the future economy. Despite a record-high GDP in Q4 of 2022, the economy will “start coasting by the end of the year,” with a flat 2024 on the horizon.
“Business will still be there, just probably not at the pace you prefer,” stated Beaulieu. “The leading indicators are all saying the economy is going to slow down and go down in 2024. The forecast for 2024 is a mild recession that lasts until the end of 2024. Your job to adjust your company to that news.”
Beaulieu cautioned, too, that, “inflation has not gone away just gone asleep – it will be with us for this decade.” Inflation pressures will begin mounting in 2025-2029 before a depression nears next decade.
According to Beaulieu, converters are advised to be aggressive with buying and financing over the next 12-18 months. Invest in new technology and new people. Automation, CRM, and ERP systems will all be helpful for businesses.
“Identify where the weak spots are in your company,” he said. “Keep costs down and margins up, and spend money now. Plus, find people to tell us what we don’t know and find out where you’re currently inefficient. At ITR Economics, we’re constantly finding ways of saying we need to be doing things differently.
Beaulieu added that the state of the economy and future prognostications have been worse. “There’s value in knowing that this is not a game-ender,” he said. “We can make it through this. Interest rates are not the only factor for your business. Interest rates will come down but not to where they were. This is a good industry to be in.”
Reardon also noted, “Historically in even the worst recessions, labeling fared relatively well. We have a relatively good idea of where the label market will be.”
The converter panel provided a positive outlook for the industry, as John Wynne, Fortis Group CEO, Tara Halpin, owner and CEO, Steinhauser, and Charlie MacLean, president, ASL Print FX, detailed their latest experiences with the many challenges facing the industry today.
“Business has been good for us, and we’re very much in growth mode,” said MacLean. “It’s because of our team that we’re in the good position that we’re in today. We’re excited about the future.”
“We had our best year ever in 2022 and it continued into January of 2023,” stated Halpin. “Workforce retention is 96%, so things are looking good for Steinhauser.”
Plus, TLMI shared the results of its Management Ratio Study, which provides members with valuable insight on operating practices and financial performance metrics in the label and package printing space. The Ratio Study is touted as one of the key benefits of TLMI membership.
Avery Dennison, Baldwin, Domino, Durst, FLEXcon, Heidelberg Gallus, UPM Raflatac, and Xeikon served as platinum sponsors for the event.
During the event, attendees received valuable information on all the hot trending issues in our industry, from workforce challenges and the supply chain to sustainability initiatives. Corey Reardon, CEO and president of AWA Alexander Watson Associates, and Alan Beaulieu, CEO and president of ITR Economics, delivered up-to-the-minute data that will shape the future direction of labels and packaging.
According to Reardon, the global label market accounts for 72.6 billion square meters, with an 18% share in North America. Pressure sensitive labeling makes up 40% of the global label market, with glue applied registered 35% and shrink sleeves 18%. Of the 13 billion square meters printed in North America, pressure sensitive accounts for 54% volume (and 47% of total units labeled) and 27% for glue-applied.
While the end-use segments vary, food and beverage are still key drivers for North America, with 25% and 33%, respectively. “Regardless of market conditions, people still need to buy food and beverages,” said Reardon. “Maybe it shifts by brand, but in this area it may not be recession proof but it’s certainly recession resistant.”
From a growth standpoint, the North American label market has seen 1.6% growth year over year with a forecast of 2.0% through 2025. Shrink sleeve growth is seeing slightly higher growth than the average label market at 3.0%, with an expected growth rate of 3.6% by 2025.
“We continue to see volatility through Q2,” explained Reardon. “We expect to see stocking levels reach a more normalized pattern of supply and demand in the second half of the year.
“PSL is still one of the fastest growing labeling markets, with a lot of variety and flexibility of materials,” he added. “This continues to be a preferred labeling format for many segments. Food and beverage still dominant. The diversity of PSL in many different applications and categories is one of its strengths. We see growth rates for food and beverage labeling at 1.8% and projected to 2.3% CAGR by 2025.”
Beverages are driving a significant amount of growth in the shrink sleeve market. Beverages account for 53% of shrink sleeves printed, with food comprising 27%.
“Shrink sleeve is one of the fastest growing labeling technologies, but it is growing at a decelerating rate,” noted Reardon. “It will continue to fall in line with PSL, which will be slightly higher than the average label market moving forward.”
Meanwhile, Beaulieu painted a cloudy picture for the future economy. Despite a record-high GDP in Q4 of 2022, the economy will “start coasting by the end of the year,” with a flat 2024 on the horizon.
“Business will still be there, just probably not at the pace you prefer,” stated Beaulieu. “The leading indicators are all saying the economy is going to slow down and go down in 2024. The forecast for 2024 is a mild recession that lasts until the end of 2024. Your job to adjust your company to that news.”
Beaulieu cautioned, too, that, “inflation has not gone away just gone asleep – it will be with us for this decade.” Inflation pressures will begin mounting in 2025-2029 before a depression nears next decade.
According to Beaulieu, converters are advised to be aggressive with buying and financing over the next 12-18 months. Invest in new technology and new people. Automation, CRM, and ERP systems will all be helpful for businesses.
“Identify where the weak spots are in your company,” he said. “Keep costs down and margins up, and spend money now. Plus, find people to tell us what we don’t know and find out where you’re currently inefficient. At ITR Economics, we’re constantly finding ways of saying we need to be doing things differently.
Beaulieu added that the state of the economy and future prognostications have been worse. “There’s value in knowing that this is not a game-ender,” he said. “We can make it through this. Interest rates are not the only factor for your business. Interest rates will come down but not to where they were. This is a good industry to be in.”
Reardon also noted, “Historically in even the worst recessions, labeling fared relatively well. We have a relatively good idea of where the label market will be.”
The converter panel provided a positive outlook for the industry, as John Wynne, Fortis Group CEO, Tara Halpin, owner and CEO, Steinhauser, and Charlie MacLean, president, ASL Print FX, detailed their latest experiences with the many challenges facing the industry today.
“Business has been good for us, and we’re very much in growth mode,” said MacLean. “It’s because of our team that we’re in the good position that we’re in today. We’re excited about the future.”
“We had our best year ever in 2022 and it continued into January of 2023,” stated Halpin. “Workforce retention is 96%, so things are looking good for Steinhauser.”
