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    Features

    European Label Markets

    A potential economic slowdown, including a hard Brexit, poses a challenge to the European label industry.

    European Label Markets
    European Label Markets
    Regardless of the economic conditions, Labelexpo Europe 2019 expects to see record turnout as leading suppliers unveil their newest creations.
    European Label Markets
    Xeikon Café Europe
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    Greg Hrinya, Associate Editor09.06.19
    With Labelexpo Europe descending upon Brussels, Belgium in 2019, there is much happening in this label market. Admittedly, the results are mixed. While converters and suppliers alike have seen great successes, the market as a whole has stagnated.

    Additionally, there is concern that a hard Brexit in the UK could lead to great economic uncertainty.

    “In the first half of 2019, the market has displayed some signs of slowing down, which mirrors a slowdown of the economy after years of healthy growth,” says Massimo Reynaudo, UPM Raflatac’s senior vice president, EMEIA. “The printing industry is fragmented, but consolidation is ongoing across most of the Western countries. On the other hand, Eastern European countries are displaying growth, and consolidation is minor or nonexistent.”

    According to market research firm AWA Alexander Watson Associates, Europe accounted for 25% of the global market in 2018, producing 16,158 million square meters. AWA values the global label market at $27.7 billion. By comparison, Asia accounts for 44% of global label volume, with North America producing 19%.

    In 2018, AWA estimates the global pressure sensitive label market grew by 5.2% to 25,709 million square meters, equivalent to 40% of the total global label market. At 7,730 million square meters, Europe makes up 30% of the global market share for pressure sensitive labels. In 2018, pressure sensitive labeling growth in Europe measured roughly 4.5%. That growth, however, is expected to dip south of 4% by 2021. As recently as 2010, European pressure sensitive labeling growth measured north of 10%.

    Challenges are not limited to Europe, says Jakob Landberg, sales and marketing director, Nilpeter A/S. Nilpeter, with production facilities in North America, Europe and India, has seen the effects of various regional markets.

    “Europe, for us, is mainly sophisticated presses with multiple substrates and combination printing. Very often, we’re targeting customer specific applications. Both markets have economic and political challenges still, with no improvement,” says Landberg. “In Europe, we still have an open Brexit situation – as well as trade discussions involving the US versus China, South America, etc. All we can do as a true global press manufacturer is to focus on our business and adhere to our customer values.”

    Nilpeter, both in Europe and abroad, has recognized greater demand for wider presses, ranging from 22" to 26". Landberg notes that the US is currently ahead of Europe with its LED curing capabilities, but Europe is more advanced with solvent inks and adhesives used inline.

    When it comes to sustainability, Europe is quite advanced in its philosophy. “In Europe, the landfill is a thing of the past,” adds Landberg. “Sustainability is the major political topic, so the focus on solutions is high. Solutions that enable the separation of substrates and, thereby recycling, are very hot.”

    “In the big picture, label applications are very similar on both sides of the Atlantic, and there are no major differences in label materials being used,” explains Jussi Oksanen, senior vice president, Specials SBU at UPM Raflatac. “One clear difference, however, is regarding materials in the personal care market. In Europe, PE films are much more widely used than in North America. In the US in particular, other types of conformable films are the market standard for labeling conformable containers. Additionally, in Europe, UV-acrylic adhesives are replacing solvent-based adhesives in many applications. This trend has yet to emerge in North America on a larger scale.”

    From a materials standpoint, European labels must adhere to certain regulations that may differ from those in North America. Avery Dennison, for example, is planning product launches at Labelexpo Europe that are designed to meet those market drivers. According to the company, these products respond to specific European requirements such as a pharmaceutical labeling solution that helps converters to achieve compliance with the European Falsified Medicines Directive (FMD).

    Smithers Pira’s view of Europe
    According to Smithers Pira’s report, The Future of Label Printing to 2024, consumer demands and technological advancements will continue to impact label printing. While Europe still maintains a strong standing in the global label market, there are questions lingering in the future. The labels space, which includes printed labels and their use in packaging, logistics and containers, is multi-faced and will undergo swift change.

    In Europe, indirect factors that will affect the labels market include changes in national, regional and global economies, as well as shifts in lifestyles and demographic trends. Meanwhile, direct factors include enhanced printing technologies and labeling materials, regulatory changes that affect the label’s content and what materials can be used for labels and containers, and the need for greater traceability of goods through production processes and distribution networks.

    The global market for label printing has been growing steadily in recent times, valuing at $41.02 billion in 2019. The market will continue to increase at an annual average growth rate of 4% in value terms to reach $49.9 billion by 2024.

    Asia dominates the geographic market for printed labels, having experienced an annual growth rate of 7% in value since 2014. North America and Western Europe are the next two largest markets for printed labels. These three regions make up 85% of global volume demand and 87% of the global value. Based on these figures, Europe has enjoyed considerable success to date.

    Of the top three regions, however, Europe is facing the most potential challenges. Mounting concerns for a substantial economic slowdown in the Eurozone have continued to gather pace. In addition, delays by the US Federal Reserve in raising interest rates are further adding to policy officials’ concerns about the economic headwinds facing Europe. A less supportive monetary policy backdrop, an unfavorable external trade backdrop, elevated political uncertainty, and a lack of fiscal firepower to combat a slowdown could together result in a recession.

    Along with Europe’s slowdown, ongoing uncertainty surrounding the nature and outcome of the UK’s exit from the EU continues to loom large over the UK economy and the wider Eurozone. A hard Brexit could cause significant damage to Europe’s economy and cost the UK up to 6% of GDP – roughly four years of economic growth.

    The UK’s financial services are expected to be hardest hit, and London is bracing itself for the loss of up to 5,000 jobs. The chemical and automotive industries are also likely to suffer heavily from new regulatory barriers and disrupted supply chains, Smither Pira notes.

    Trends
    There are several major labeling trends being realized in Europe, as well as in the rest of the world. According to Smithers Pira, digital printing–specifically inkjet–has made a significant impact on the market. Many label applications are moving to shorter runs, as end users are looking for greater levels of customization. This consumer trend is ultimately driving growth for digital printing, and it is expected to continue through 2024.

    According to Avery Dennison, materials designed for digital printing are being highlighted at the company’s Labelexpo Europe booth. With demand for digital growing in Europe and around the world, one of Avery Dennison’s digital experts, Vladimir Tyulpin, is at the company’s booth throughout the show to demonstrate Avery Dennison’s range of digital inkjet materials while also discussing the growing digital trend with visitors.

    Due to economic challenges, many brands are prioritizing cost reduction, while consumers are demanding superior value and customer service from suppliers. This mix of market conditions has led to the rise of hybrid flexo/inkjet, with or without inline finishing, which Smithers Pira sees as a major trend in the label printing industry.

    Nilpeter’s Landberg echoes this trend, noting that the majority of Panorama combination presses have been installed in Europe. The press has been used mainly to help European label printers with health and beauty applications, as well as the various beverage markets.

    Flexography still dominates the printing landscape. Smithers Pira says that flexo has accounted for 403 billion A4 prints, or the equivalent of $13.3 billion. However, with annual growth of 3.1% in value and 4.4% in volume over 2014–19, flexo has not kept pace with overall market growth, primarily as a result of the gradual rise of digital printing processes. Electrophotography is the largest of the two digital print processes in 2019, but inkjet has been growing at a much faster rate since 2014. Continuing high growth in its use will see inkjet overtake electrophotography in volume before 2024.

    Smithers Pira adds that pressure sensitive labels are experiencing an increase in market share as government regulations on tracking and bar coding requirements for medical and pharmaceutical products boost demand. With continued changes looming in Europe, pressure sensitive labels will continue to trend.

    There is also a growing drive for products that will ultimately improve sustainability and reduce the environmental footprint of release liners. Wet-glue labels, despite losing market share to pressure sensitive labels and label sleeves, are still supported by strong global expansion in the food and beverage markets.

    According to UPM Raflatac, sustainability will continue to be a key driver in the European market. “Sustainability is – and will over the next five years – drive big changes,” explains UPM Raflatac’s Reynaudo. “The ‘war on plastic’ initiated a couple of years ago has meant that consumers are more conscious about the implications of their choices when it comes to the way their products are packaged – and labels are part of the equation. At UPM Raflatac, we say that ‘labels matter’ when it comes to the sustainability of packaging materials. We have seen an increased demand of labels that solve one or more of the problems identified as the ‘Three Rs’: Reduce, recycle, renew.”

    With sustainability having such a significant impact in the labels market, specifically in Europe, UPM Raflatac is continuing to highlight that trend at its Labelexpo Europe booth. “Attendees can see first-hand all of the innovative and sustainable solutions we have developed that can help build brands and help brand owners come closer to achieving their sustainable packaging targets,” adds Reynaudo.

    At Labelexpo Europe, meanwhile, Avery Dennison is highlighting its range of sustainable products. The company’s efforts have expanded beyond a focus on individual materials, such as FSC-certified paper, to encompass a whole-systems perspective that looks at improving sustainability across a package’s lifecycle. Avery Dennison’s portfolios help address this challenge, featuring industry-wide collaboration with customers, suppliers, end users and even competitors.

    Automation will continue to trend too. Printers are increasingly investing in management information systems (MIS) and other prepress software designed to improve inspection and color management. Automation will range from MIS to fully automated press and finishing systems.

    The ultimate objective is to establish a capability for running completely automated and streamlined workflows 24 hours per day, which receive job orders by electronic data interchange, says Smithers Pira. The new automated systems can utilize the potential of Cloud computing and the Internet of Things to coordinate with shipping carriers, set up invoices and receive payment advice, and use Wi-Fi for remote access and control of production processes. Automation is also being applied to warehouse management and the preparation of shipments to customers. Higher levels of automation mean that the role of the employees is changing, and new skill sets are required from those of traditional printers.

    To stay in line with this trend, Avery Dennison has emerged as a proponent of the Internet of Things and smart labeling in Europe. The company anticipates a world where every consumer product comes with a digital identity that enables it to connect with the internet—and everything else. During its M_use Live seminar series, held daily at Labelexpo, Avery Dennison experts are exploring this changing landscape for label and packaging goods and what a connected universe will look like for brands and consumers. For more information on some of the latest technologies that are being showcased at Labelexpo Europe 2019, turn to page 78.


    Record turnout at Xeikon Café Europe
    Xeikon Café Europe 2019, with a conference program providing a 360° view of the trends, challenges and solutions for today’s packaging industry and an application-driven technical Academy, attracted nearly 1,000 visitors over the event’s three days. The turnout included over 500 label and packaging converters attending from over 55 countries.

    “We are delighted with the success of this year’s Xeikon Café Europe. Once again it has shown its value to the industry with a substantial increase in visitors,” says Danny Mertens of Xeikon Café. “We are dedicated to sharing our knowledge and expertise in packaging innovation and digital production, and each year we plan ahead to evolve and improve the visitor experience. For 2019, we further streamlined our Conference and Academy programs, inviting speakers that provide ‘spot on’ and challenging insights, intellectual entertainment and food for thought. This year, a key discussion addressed the significant changes in consumer behavior and communication that are impacting brand packaging and subsequently packaging production.”

    Mertens continues, “The event delivered something for everyone, whether newcomers to digital processes or those with more experience. It was clear that many of the visitors discovered new applications and production possibilities. We clearly recognize the need from the industry for straight-forward, objective, hands-on information – both from a technical and a business perspective. It was particularly rewarding this year to see the label and packaging converters taking the chance to learn and connect and be inspired. Their enthusiasm was evident from the interaction and the many questions asked while they attended Xeikon Café’s demonstrations and discussions. We have had great feedback this year from both visitors and exhibitors. Media and partner feedback stated this is becoming the biggest event on the planet dedicated to digital production in labels and packaging.”

    Aljan de Boer, head of inspiration at Trendsactive and this year’s keynote speaker, stated, “There was a very strong vibe among visitors searching for new insights. They were looking for new things to inspire their future direction and wanted to explore new perspectives. I also found it great to see such a varied bunch of printing professionals from such a wide range of regions.”
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