Label industry Metamorphosis

The tag and label printing industry appears to be changing in ways that may qualify as a metamorphosis.

by Tom Polischuk, Editor-in-Chief

"THESE ARE INTERESTING times." So says Tim Hare, CEO of York Label, as he looks at the current state of the tag and label printing industry.

This industry, built long ago on the enterprising backs of entrepreneurs, seems to be maturing. It faces many challenges brought on by fierce competition and a promise of highly dynamic market and technology changes that will continue.

A recovery with a different look

The economy is picking up steam, and many people are waiting for the traditional "good times" that come with it. Except this recovery may be different.

"Everybody seems to be waiting for a turnaround," says Hare, "but I'm not convinced a turnaround is coming. Volume may pick up slightly, but you can't live off 2-3 percent volume growth. You have to take market share or get into new markets."

Vince Naselli, director of TrendWatch® Graphic Arts, shares this sentiment. In support of TrendWatch's Printing Forecast 2004, he says, "Trend after trend shows that the economy rebound is not going to significantly help printing companies turn sales around. … The numbers indicate that an economic upturn will not translate into an upturn for printing demand. Instead, printers and vendors need to change their business models to reflect the needs of today's new business environment. Our analysis indicates that printers need to become more familiar with digital printing, short-run color, personalization, value-added services, cross media, CIM, JDF, and CIP4."

Although TrendWatch focuses on a broader segment that includes commercial printing, the thrust of the message rings true in the packaging sector.

In a broad sense, Hare sees the industry becoming less entrepreneurial and more business oriented. "Our industry needs to become more measurement driven, more focused on what I would term 'process manufacturing.' Although a company needs a balance of both entrepreneurial and business elements, the companies that are going to win market share are those that have the best cost structure."