Labelstock demand has remained strong as the pandemic recovery begins, but buyers seek supply chain resilience, according to Finat, the European association for the self-adhesive label industry.
According to this year’s Finat Radar Brand Owner survey, 83 percent of brand owners project that label purchase volumes will increase or remain the same in 2021 across all formats, despite the impact of the Covid-19 pandemic on supply chains. Similarly, 74 percent of companies anticipate that volumes will increase, despite 46 percent of firms revealing that they had experienced supply disruptions over the last ten months.
Despite the uncertainty, the European narrow web market outlook remains positive as 38 percent of firms say they plan to increase procurement volumes between four and six percent. Seven percent of the companies surveyed suggest volumes could even increase between seven and 15 percent.
However, the survey also reveals shifting priorities in light of the pandemic, including a heightened interest in ensuring that supply chains are resilient to shocks. Last year, just seven percent of survey participants said it was important that label vendors have more than one production facility. This year, the same figure has increased to 25 percent.
The second significant indicator of this trend is the surge of interest in the flexibility of digital label presses. Even during the height of lockdown, just seven percent of companies reduced digital label spend. Today, one in three companies specifically identifies events in 2020 as the motivation for sourcing more digitally printed labels, owing to the advantages of shorter lead times and greater assurance of supply chain availability that the technology enables.
The shift to digital is not necessarily entirely shaped by recent events, however, as the survey also reveals other factors that are driving the changes, with the top reasons identified as the ability to print small run sizes and improved turnaround time. The survey shows that fewer buyers are interested in late-stage customization options offered by digital printing. It suggests that as the business focus turns towards resilience and reliability, sophisticated marketing campaigns with individualized, unique packaging plays less of a role.
Beyond the pandemic, the survey also reveals a strong continued interest from buyers in maintaining environmental credentials. Seventy-five percent of companies say that environmental certification is either important (49 percent) or critical (26 percent) to doing business, particularly in the food, beverage, health, beauty, and pharmaceutical verticals.
The full report from Finat on the European self-adhesive labels and narrow web markets, covering the second semester of 2020, is exclusively available for all members and available for download now https://www.finat.com/knowledge/finat-radar. It contains results from an exclusive survey of more than 70 brand owners and packaging buyers. It has been augmented with qualitative interviews with participants to paint a full picture of the industry's state as the Covid-19 recovery begins.