Finat ELF strikes strong note

This year’s Finat (ELF) was packed with great and relevant content – perhaps the best such event this writer has attended. The goal was to focus on inspirational and, above all, practical ideas which converters could take directly back to their businesses, and in this it succeeded admirably. 
ELF gala dinner in Copenhagen

Scandinavian trends 
Because the ELF was held this year in Copenhagen, delegates had the chance to focus on one of the world’s most active regions for label conversion and consumption. 

Lars Ole Nauta, CEO of the FlexoPrint group and vice chair of the Danish Label Association, pointed out that Denmark enjoys Europe’s highest consumption of PS labels – 17.5sqm per person compared to a European average of 9.8sqm. Denmark is part of a highly active trading bloc with neighboring Germany and Sweden.

But the country’s label converters facing significant challenges, said Nauta, including high labor costs, a ‘punitive’ taxation system and increasing raw material costs. 

Consolidation is a key trend, with private equity investors stepping in to acquire Emballage Gruppen and Nauta’s own FlexoPrint group. The number of converters has fallen from 27 in 2009 to just 21 ten years later. 

Looking ahead, Naute predicted consolidation will continue, while pressures around sustainability and climate change will dramatically increase. ‘At the same time, lead time, lead time, lead time and the need for education will be the key drivers.’

Leif Persson, senior VP and MD of the multinational StrongPoint group and chair of the Swedish Labelmakers Association, looked at the Swedish and Norwegian markets. 

In 2017-2018 Sweden saw a 2.4 percent increase in label consumption. Spectacular growth was recorded by coated papers and PE – growing at 16 and 26 percent respectively – while uncoated and other filmic products showed an equal decline. Sweden has been a leader in innovation links with the university sector. 

Norway is a market characterized by added-value label work in QR codes and other digital markers, brand authentication and RFID, all supported by a surge in e-commerce, though much of the market remains low-value blank labels, said Persson. Environmental and sustainability issues are also important, with some types of adhesive now banned on PET bottles and a complete ban on Bisphenol A (BPA) in thermal papers. 

As with Denmark, M&A activity continues and sustainability pressures are growing. By 2030 all packaging must be made of recycled plastics or fossil-free raw materials. 

European trends 
Finat managing director Jules Lejeune delivered his annual assessment of the pressure-sensitive label market in Europe and previewed the forthcoming European Radar converter and end user survey. 

The headline development is a ‘remarkable shift’ from growth in non-prime labels in 2017 to higher value prime labeling – apart from industrial chemicals – in 2018. 

Another interesting finding is that converters plan to invest more in conventional presses than digital through 2019-20.

Diving deeper in the PS market statistics, Lejeune said annual self-adhesive materials demand in Europe is approaching 7.5 billion sqm. But growth has fallen from 3.7 in 2017 to 1.4 percent in 2018 amid wider economic uncertainty. This slowdown is also reflected in Finat’s Radar converter report, with sales growth down from 8.3 percent last year to 4.9 percent in Q12019. 

Corey Reardon, president and CEO of Alexander Watson Associates, estimated that Europe accounts for one quarter of global label consumption. In prime labeling applications, glue-applied is the leading technology at 46 percent against 24 percent for PS and 24 percent for shrink sleeves. 

Shrink sleeves continue to be the fastest-growing label technology at almost 5.5 percent, closely followed by PS at just over 5 percent. Glue-applied labels are still growing at a relatively healthy 3 percent. In-mold has remained at around 2 percent of total global volume for many years, but is now showing growth rates of over 4 percent.

Turning to competitive decoration technologies, Reardon singled out flexible packaging as a key growth area. Digital direct print is currently not a serious challenger to labels, but many of the arguments raised against it – too slow, too complex, too expensive – were once raised against shrink sleeve labels, said Reardon. ‘The only constant is change.’ 

How to innovate 
A group of sessions focused on innovation strategies, looking at where creativity comes from and how it can be harnessed.

Guido Schmitz is adjunct professor for packaging innovation and engineering at Rutgers University in New Jersey, where he brings to bear his immense practical experience as head of packaging and technology Innovation at Bayer HealthCare (Consumer Division). He runs the University’s graduate packaging program which has placed students into a wide range of leading brands such as L’Oreal, Mondelez, Pepsico and Bayer. 

Schmitz takes a holistic approach which involves multiple stakeholders – customers, suppliers ‘and science’. An example of this approach is a student project to redefine OTC product labeling. The label used the ‘memory’ characteristics of an OPP film to create a ‘spring’ mechanism which revealed multiple information panels. This allowed the use of increased font sizes making the text far more readable. Another project tackling the issue of too-small font sizes developed a flexible magnifying film based on a Fresnel lens rather than a conventional magnifying glass. Students have also developed labels with flexible electrophoretic displays similar to a Kindle which also allow zoom and scrolling. 

Clicks back to bricks 
Wijnand Jongen, author of the best-selling book ‘The End of Online Shopping’, argued that the current dominance of online shopping over the physical store is set to be overturned.

‘Commodity shopping will continue to decline, but we will see a continued evolution around stores as showrooms delivering emotional connections – we call this O2O, or Online-to-Offline.’

The key is delivering an online experience inside the store. In China, Alibaba is setting up physical stores which act as ‘customer experience centers’, while Amazon Is aiming to open 3,000 cashier-less Go stores by 2021, all selling items which are rated 4-star. JD.com is taking on Ali Baba in China by opening 1,000 7Fresh cashier-less stores a day. 

Home Delivery will also transform, said Jongen, using artificial intelligence to predict what consumers will want and offer instant same-day availability. Amazon’s Instant Pickup will allow a Prime customer to order a range of ‘daily essentials’ ready for pickup in two minutes from selected fully staffed stores. 

Blockchain technology, married to the Internet of Things, is the key enabler of this revolution, by making the entire supply chain fully transparent. ‘Scanning a QR code on the label shows the whole chain of production, even including live video of the production process,’ said Jongen. This will need new kinds of packaging devices incorporating sensors, Augmented Reality, smart codes, chips and on-demand print, all interacting with smart devices along the supply chain. 

Re-imagining the label converter 
Outstanding educational and inspirational value was the provided by a number of breakout sessions with subjects taking in smart packaging, augmented reality, recyclable flexible packaging, plastics recycling, recruitment and personal branding. 

Bringing these threads together, ELF delegates concluded that label converters should stop thinking of themselves as ‘printers’, and start thinking ‘consultant’. 

Developing ‘smart’ capabilities was seen as a must, but does the converter need to develop these skills in-house, or, in a networked world, is it better to ally with other companies with those skills? 

Finat president Chris Ellison urged delegates to ask what their company would look like in 2025. ‘What will my workforce and organization look like? How can I become part of, and grab part of, the new value chains? Retailers are putting responsibility back onto the printer, and this is an opportunity to add value as a consultant.’ 

Looking practically as sustainability, speakers emphasized the need to ‘design in’ recycling at the outset, specifying compatible film, paper and adhesive combinations. The label should carry machine-readable information identifying the packaging components in the form of a digital watermark for example, or tracers. Consultant and materials expert Noel Mitchell said brand designers can now consult the online Plastic Recycling Europe database to check the materials they are specifying are recyclable. 

German converter and former Finat president Thomas Hagmaier said recycling ‘must start with the mental attitude in your company. We have been recycling everything for six years but it costs money for the shredder, space, transport etc.

’Summarizing three days of round tables, presentations and debates, Chris Ellison said he had gained particular insight from the converter round table, where sustainability and workforce changes were key areas of concern, and noted this reinforced the importance of networking and strengthening links between Finat and the national associations. ‘In the digital age I see some perils in isolation. We need face-to-face communication and events like this which bring us together away from digital platforms.’

Andy Thomas

  • Strategic director