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2020 in review: North America

2020 in review: North America

According to market researchers, label converters in North America have experienced such high growth throughout 2020, it’s almost as if the label market here is pandemic-proof. Sure, there are challenges, and a lot of the growth depends on a label company’s size and the markets it serves, but overall, researchers at LPC had good news to share with the TLMI converter members who participated in a survey it conducted for the association.

Market researchers at LPC surveyed nearly 90 North American label converter companies and found that for the majority of participants, 2020 has been a year of growth. Furthermore, LPC says of those label converting companies who reported growth, 23 percent reported high growth.

Many of the growth spikes, according to LPC, were on two edges of the converter scale range: the smallest and the largest companies had the highest growth averages overall. LPC hypothesized that this could be because those are two company profiles that can often be associated with a nimbleness, the ability to respond quickly to customer demands, and the tendency to be a ‘generalist’ label printer, meaning those who cater to three or more end use sectors.

This past year was more punishing to converters who specialize, says Jennifer Dochstader, managing director at LPC. ‘Focusing your technical prowess in one area can mean higher growth, however it turns out that specializing in certain sectors has had the opposite impact this year.’

From the outset of the Covid-19 pandemic, label converters across North America were deemed essential employers and have remained open throughout, though many are adjusting to a new, cautious workplace and many have sent office staff home to work remotely. Converters in this region have showed great resilience during the pandemic. Many used their expertise in the fight against Covid-19 to print floor graphics that indicate safe distances, while others engineered face masks for health workers, and it seemed like everyone was printing hand sanitizer labels – some even offering to print these labels for free or at cost. 

The first few months of the pandemic were best described by a label converter who said he was conducting business ‘as if the house was on fire.’ A lot of that chaos was driven by panic buying and hoarding early on, which benefited some industries including household chemicals, transportation and logistics stemming from an e-commerce boom, and of course, food and beverage, particularly for food-at-home products. The pharmaceutical and medical sectors have also witnessed significant growth in 2020. 

Many converters have said those markets that saw an uptick in the beginning of the pandemic have since returned to normal levels. 

Meanwhile demand in other markets declined. The restaurant business has been hit particularly hard with closures early on and since opening at limited capacity. The automotive industry had nearly a complete shutdown for two months in March, which meant converters who cater to that market had to be ready to respond once they were brought back online. The durables market also witnessed a decline in 2020.

Capital equipment
An interesting trend to watch in 2021 will be where converters in this region focus their capital equipment dollars. At present, it appears converters are spending money to address increased capacity with investments aimed largely at increasing efficiency, productivity and workflow automation.

In LPC’s study, the vast majority of respondents said they did not delay major capital equipment expenditures in 2020, and those who did delay, said they will likely make equipment purchases in 2021.

Since Labelexpo Americas, the region’s major tradeshow, was postponed from September 2020 to June 2021, it will be interesting to see whether those buying projections hold true.

In a true sign of the times, a number of converters have indicated that their investment dollars will be spent on technology not tied to label production, but has become essential in today’s virtual-working environment. Software, high-speed internet, computers – those kinds of infrastructure investments are becoming a priority for many label companies.

ABOUT THE AUTHOR

Chelsea McDougall is North America editor for Labels & Labeling.

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