‘Still some bright spots in labeling trends’ says FINAT report

There are small signs that growth is remaining in some parts of Europe’s self-adhesive label industry – principally Central, South and Eastern Europe – but it is much reduced from the heady years of 2006 and 2007, according to a new report.
 
Corey Reardon, president and chief executive officer of Amsterdam-based AWA Alexander Watson Associates, who is conducting an in-depth study into buying patterns among end-users in the industry for FINAT, the self-adhesive label association, said: ‘There is a lot of doom and gloom but within that there are some bright sports which tend to offset the overall trend of the market for softening.’
 
His company is compiling the results of FINAT’s fourth End-User Survey, to be published in late Spring, which contains feedback from around 200 brand owners across a range of industries.
 
All agree that there was a markedly dramatic softening of the label market in the fourth quarter of 2008 as many users drew on stocks in hand – a trend that has continued in the first quarter of 2009.
 
In 2008 European growth was between two to three percent – around 5.6 billion square meters – which compares to a 4.3 percent increase in 2007 to 5.5 billion square meters. The slowdown in the fourth quarter put the brake on early 2008 expansion.
 
The greatest regression has been in Western Europe, with the UK and Scandinavia seeing particular contractions in volumes, which prompts Reardon to forecast a static market in this region in 2009.
 
Eastern Europe is seen as the main driver in 2009, having seen growth of eight to ten percent seen in 2008 – but in some areas of that market only up by five percent. Reardon tips Central and Southern Europe to see a zero to two percent growth over the coming year.
 
Reardon said: ‘In terms of market segments, beer in the beverage area is the driver for growth and for film labels overall with their use in premium beers. It is rumored that a major European brewery is changing to non-returnable glass bottles which would facilitate the use of self-adhesive labels by reducing the need for label removal. Anther plus is the investment by breweries in new modular labelers that overcome the previous barriers to entry for self-adhesive labels.’
 
More opportunities are seen for self-adhesive labels on mineral water bottles while in wine bottling self-adhesives continue to take over from wet glue labels.
 
In food, commented Reardon, there are ‘a number of possibilities’ with self-adhesives used on shrink wrap products and flexible packaging driving some demand. ‘The idea of reducing costs on chilled meals by replacing the card sleeve with a self-adhesive label in the lidding is an opportunity.’
 
Household chemicals remain ‘a battleground’ and health and beauty care will be a key sector as brand owners are taking no risks in changing from high quality labeling which enables self-adhesive to dominate.
 
The specialist pharmaceutical market will see ‘steady’ growth of three per cent – ‘one of the highest growth areas today’, Reardon said.
 
The auto industry presents an interesting situation where the numbers of vehicles built is declining but the use of labels on each vehicle is increasing.
 
FINAT’s End User Survey will be published ahead of its annual conference, being held at the Gloria Golf Resort, Antalya, Turkey between June 10 and 12.

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